Standard Life has produced a bumper 162 age IGC report – a kind of shock and awe statement from David Hare – which is issues together with IGC reports for other Phoenix insurers – Phoenix  and ReAssure. They get 100 and 132 pages respectively, which means that David, who Chairs all three has produced 400 pages of text , reporting on his work.

The three reports all concern the state of the three organisations in 2021. Bizarrely, Standard Life has produced this week a press release reporting on changes to the personnel on its IGC Committee but no link to the IGC report!

These IGC reports are hugely important, they relate to pension policies of 13m people, as many savers as in the Government’s workplace pensions – Nest. The Phoenix Group is now our largest private insurer of pension risk – on this basis.

So I’m not ducking the challenge of reporting on all three reports – but wonder just who these reports are being promoted to – other than the FCA. I am starting with Standard Life, being the most prominent workplace provider within the group.

Tone and Content

I am surprised and a little shocked by the latent anger within this report. David Hare has been writing these reports for 7 years now and will already be thinking of the 8th, which will cover 2022, perhaps the most crucial year for workplace pensions since the outset of auto-enrolment.

We are told that we can find a summary- I tried the link

Readers who would prefer more of a summary are
encouraged to read the Value for Money Summary
that can be found on the IGC webpage .

It is an IGC webpage, the wrong IGC. I am presumably the first person to press the link.

I am not surprised that David Hare sounds angry, not only is the IGC report  not getting promoted, but it clearly hasn’t checked one of its most important links.  If I was him, reading this report, I’d be shocked, embarrassed and very angry.

But the anger in the report isn’t acute, it’s a kind of sullen lurking anger that he and his committee are being railroaded down a view of value for money he does not agree to. Take the opening remarks on Value For Money

The IGC believes that “ongoing VfM” is fundamentally a
forward-looking measure. Thus, of the following three questions:
1. Have you received VfM?
2. Are you currently receiving VfM?
3. Going forward, can you expect to receive VfM?
our assessment is mainly addressing questions 2 and 3.

Of course the FCA and the Pensions Regulator – urged on by the DWP and Treasury are looking to use “net performance” as the key measure for VFM , relegating the things that insurers can control (the member experience) subordinate to the thing that (they think) really matter to savers – the outcome of all that saving – the pot and what the pot can buy.

These are not the factors that David Hare’s report focusses on. It promotes those matters that Standard Life feels are in its control (and the control of the IGC)

• Costs and charges
• Communication and engagement; and
• Customer service.

Infact the Chair’s opening comments is a continual moan which culminates in a rant against the FCA for making him produce such a long report

However, research carried out for the IGC in 2020 and again in 2021 confirmed that, the longer the report, the less likely customers are to engage with it.

The report looks to me deliberately long – longer than any other report I have read so far. It’s length is a matter of defiance but it comes across as petulant defiance. It’s solution – the inclusion of links , is unfortunately undermined when links go to wrong site.

In tone and content, I give the report an amber – the point of the report is not to criticise the FCA but to deliver an assessment of the state of play at Standard Life, for too much of its long read – it seems to be talking to the FCA and not me.

The Value for Money Assessment

The comparable scores for other IGCs David looks after are considerably lower than these, this gives Standard Life not just a good bill of health – but superstar ratings.

However , it ignores the reality of saving with Standard Life over recent years.

These numbers show that savers have not received value for the money they have placed with Standard Life which makes me want to challenge David Hare’s forward looking rating, which places investment performance clearly in the “green” (for good) sector of his dashboard dial.

For all the advantages proffered by Standard Life’s communications, customer service and cost containment, what matters to savers is that the pot and what it can buy , are as big and as much as possible.

I’m not satisfied that the Standard Life proposition is giving savers for money and don’t agree with the IGC’s verdict. I recognise that David Hare is writing his statement with good intentions but I think the value for money misses the point. It gets a red from me.

In a previous version of this blog, I complained that I did not feel that the value assessment was compliant. David Hare has asked me to review this statement and having re-read it I have withdrawn the comment that I did not think the value assessment compliant with the FCA’s handbook – COBS 19.5.

I appreciate that David’s personal standing may have been damaged by my view and I have no wish to do that so I apologise to David.

Effectiveness

There is no doubt that Standard Life’s IGC is effective and what is so good, as you move through the report is that it doesn’t shy away from criticising Standard Life.

While I despair at the anonymisation of competitors (indeed the FCA want benchmarking against named competitors –including master trusts), I am pleased in reading the section on investment performance to see recognition that things must improve.

I found the sections on ESG, investment services and particularly investment pathways informative and helpful, having spoken many times to David Hare on these areas, I know he pays attention to detail and that he is a tough taskmaster. I give the report a green for its effectiveness, the IGC is on top of its brief and working hard for its savers.