There were two deals in UK financial services last week that caught my eye, both involve “non workplace pensions” as the FCA like to call wealth management using pension tax incentives to wrap client’s money for retirement.

The first was Nationwide’s purchase of Virgin Money (a sprawling retail bank), the second Pollen Capital’s purchase of Mattioli Woods.

I will not go into valuations or the impact of new ownership, but put this question to readers; why is it – with the consumer duty now out of its box , that there is so much activity in this space. What makes these companies so attractive?

It’s too simple to say  it’s “a double digit coupon and equity upside”, the ostensible driver is returns for in Pollen’s case the fundholder and in Nationwide’s case – the mutual. Two more different purchasers you couldn’t expect to find, but they seem united in their view of the potential from the mass affluent.

“Life time savings” as the PLSA like to call it , represents an almost irresistible covenant for the purchaser. They get a rent on huge amounts of capital with no defined duration , our money is an asset which keeps on giving.

This of course is what pension schemes used to be. They used to have an infinite refresh with new members replacing those who died and with a sweet spot (the yellow box) which had an infinite horizon. The Market Value of the assets in a pension scheme are irrelevant to the overall intent, the long-term payment of pensions.

Firms like Mattioli Woods and Virgin Money have taken on this “lifetime savings” function but what they have not yet mastered is the distribution of savings  (the benefit outgo) . Ideally the asset income (and growth) matches claims on funds and wealth management assumes the characteristics of a perpetual endowment.

Those who own the rents on our money – the Pollens and the Nationwides, may look different , but they are performing the same function, purchasing the rents on the process which give the  “double digit coupon and equity upside”. This looks like easy money and to a degree it is.

The question for the FCA and those behind them is to gently persuade the Nationwides and Pollens that as well as collecting their rent, they have some duty to husband.

Husbandry is a medieval concept – well known to Piers Plowman – which involves not just the extraction of goods from the ground, but the maintenance of the ground for future generations. We might include in “financial husbandry” such concepts as ESG and the payment of pensions, both of which are necessary for the money rented to “matter”.

Simply taking our money and extracting a rent may not be good enough. Finding ways to use that money to pay pensions and create a sustainable financial and ecological ecosystem in which the pensions can be spent , is a matter of financial husbandry.

As has been mentioned many times, value for money is not just about the rents extracted, it’s about the financial husbandry that’s received by those who own the money, the savers.

This really isn’t a very difficult equation. On the one side we have the natural urge of any farmer to maximise the current yield on the land and the equally natural urge to ensure that the land remains productive over time.

Another word for “husbandry” is “stewardship” and that’s what Pollen and Nationwide have bought the right to do. Let’s see how they do it.