Following yesterday’s post on MaPS’ new service guiding people to pension options, I’ve seen quite a bit of feedback from providers, but no comment from consumers – it would be good if MaPS can report on the use of the service and customer feedback.
An excellently built service
I said it yesterday, I’ll say it again today; the service is excellent and deserves to be plugged into many pension apps to help people with pots find a way to spend them. Well done MaPS for getting the user journey right, providing relevant information on costs and charges and offering clear next steps that ordinary people can follow.
With winners and losers
There’s been some whining from LV that they weren’t included and I ought to apologize to Fidelity for not including their product descriptor on yesterday’s blog. A lot of organizations such as True Potential, Open Money and Aegon don’t get to showcase their products either.
If LV hasn’t the gumption to get on MaPS platform then it should try harder!
LV= told the FT it “very much” wants to be included in the MaPS drawdown comparison tool, launched on Monday.
(We) “do not know why we haven’t been included. We became aware of this issue today and our team is contacting MaPS so that we can be included.”
— Josephine Cumbo (@JosephineCumbo) February 2, 2021
IMO, the explanation from MaPS is the right one
MaPS said: “The main focus of the comparator tool is one based on a Direct to Consumer and open market offering and the LV= drawdown products are for their advised customers. Should their offering change we would be delighted to add them as a partner to the comparator tool.”
— Josephine Cumbo (@JosephineCumbo) February 2, 2021
It is up to providers to prove to MaPS that they have a direct to consumer offering not the other way round.
With potential that must be realised
A place at MaPS table will be prized in proportion to public take-up and public take-up of the service will be in proportion to adoption by portals that can drive it traffic. If it gets the support of Martin Lewis and other mavens, if it is promoted into the large occupational DC schemes which offer little support to members at retirement and if MaPS can promote the service directly to the public , I can see this service filling a gaping gap and providing people with posts and no pension with a way forwards.
The service even comes with the opportunity to talk with a live human being who knows what he/she is talking about. This service could compliment Pension Wise and be the making of MaPS.
However… (and you knew there’d be a but)
The choice of how you drawdown your money is not just a matter of picking your investment pathway and finding the provider with the lowest charges. You are giving your pension savings to an organization that has the capacity to make or break the planet. People’s savings matter – their money can be made to matter and if we don’t get this message into the sales process, then all the talk of net-zero by 2050 is just talk.
The day after MaPs launched its drawdown services, the Pensions Regulator reported on occupational DC schemes. As at April last year, “only” 40% of trustees of these schemes paid any heed to environmental sustainability in the make up of its default fund.
Schemes that had 100+ members and/or were used for automatic enrolment were asked a number of questions about climate change.
Overall, 43% of this group had considered climate change in their investment strategies, up from 21% in 2019.
Together these schemes covered 95% of DC members.
The main reason given for not considering climate change was that it was not felt to be relevant to their scheme (mentioned by 21%), although a similar proportion (19%)
stated that they were planning to review whether they should start taking account of climate change.
That was nearly a year ago (why it’s taken so long to publish this I don’t know). In 2021 I would be surprised if the percentage of trustees denying climate change’s relevance to their savers weren’t down to single figures.
Right now, it is expected of trustees to be not just considering climate change in the design of defaults, but to explain how their defaults are adapting to help Britain meet its target of carbon neutrality (net zero) by 2050.
So why is MaPS’ service totally ignoring this most critical of issues?
An obsession with cost at the expense of value
The only commonality on the MaPS comparison pages is cost
But every survey tells us that when people understand that where they invest their money makes a difference to the environment , society and how our companies are governed, they expect reporting on how their investments stack up. They expect more than TCDF, they want to know what the money they are paying in charges is paying for and they expect it to be paying for improving the ESG factors of their investment.
I know that it is currently difficult to differentiate between a fund that is putting in a proper shift on ESG factors and one that is green washing, but that is not an excuse for totally ignoring how a manager makes our money matter.
We need MaPS to lead not follow
As well as the Pensions Regulator’s report, I also had a chance to read the abridged version of the Dasgupta report
This amazing study has this headline
Nature is a blind spot in economics that we ignore at our peril
The conventional measures of economic worth (GDP in particular) are challenged by Dasgupta who calls into question how we can value the biodiversity of the Amazon rain forest at nothing while Amazon – the goods and web delivery service – is counted one of the most valuable organizations in the world.
We need to recognize the blind spots in our ecosystems and in the pension ecosystem. As blind spots go, the failure of MaPS to promote responsible investment to people searching for long-term management of their savings.
Pingback: Pension Bee calls MaPS pathway tool “not fit for purpose” | AgeWage: Making your money work as hard as you do
Pingback: MaPS – this is not the way to buy investment pathways! | AgeWage: Making your money work as hard as you do