It’s a small matter, but good use of the English language is key to getting readers onside. At one point, the Aviva IGC report describes changes in the investment default fund (itself a nasty linguistic construct) as “directionally appropriate”. To ordinary people “going in the right direction” would do, but for money managers, a different more convoluted style is used – why?

Why when Aviva’s report is “going in the right direction”, prioritising scrutiny of the right things, thinking from the member’s (not the provider’s) point of view and showing that Aviva’s values remain as they have been over the years, the kind of values ordinary people sign up to.

To be fair to Colin Richardson and his team, I generally find myself going in the right direction with this report which I like,

I fundamentally like this IGC report because it focusses on the three aspects of VFM it is asked to , by the Government. An example of the twaddle that we used to be served up sits at the end of this report

Value of charges

It is pushing for Aviva to bring baseline charges on legacy money down to 0.75% (from 1%) and it is focussing on the minutiae tooQuestions need to be asked as to why Aviva spent 0.38% of its Global Equity Fund on transactions in 2022, but this fund has achieved outstanding performance and costs have fallen to an acceptable level in 2023. I’d like to know why the Stewardship spent 0.2% of the fund transacting in 2022. While I like the clear way things are laid out, I think the report’s conclusion that these costs “vary greatly” is rather weak, why is there such variance and is there value for the money spent?

But this is a minor cavil. More worrying for savers is the reliance on anonymised data provided by Redington which is held by the IGCs but never shared. It’s referred to by Colin Richardson in his preamble

We are pleased to note that costs and charges remain
highly competitive for newer policies which are those
held by over 90% of customers. We received detailed
information from a study of costs and charges for the
main UK workplace pension providers. This backs
up Aviva’s assertion of charges at or below average
levels for all sizes of employers. Average charges are
significantly below the charge cap.

The FCA had tried to evince from providers, the pricing model for contract based workplace pension schemes, asking IGCs to publish the actual AMCs grouped by scheme size (or value). That would have meant employers could see if they were paying above or below the average for comparable schemes. This meaningful information is missing from this report.

While I am a little dissatisfied by the IGCs presentation of current scheme’s cost and charges , I suspect that its work on historic costs is effective and Aviva do seem to be leading the way (maybe as a result)

Investment performance – value from growth.

This looks like the last year in which IGCs will be able to report performance on their rather than the standardised terms of the VFM Framework.

Unlike other IGCs reviewed so far, Aviva have clearly given the IGC a budget and the freedom to do their own research. The result is some genuinely interesting information on both its and its competitors returns

We get a good explanation of why My Future Focus Growth is lagging and My Future Growth is succeeding. I am still unclear what “focus” is about but it seems to be producing a short-term lag on performance. I like the way that Aviva is doing its own research and not relying on the CAPA tables and I like the fact that it is naming names. It is also good to see the information in graphical form, showing risk against return though the Future Focus Long term Growth Fund isn’t featured.

The difficulty with these bespoke reports is of course selectivity, the advantage is that there is a degree of coherence and brevity that I fear will be lost when the IGCs move to standardised reporting.

The IGC is adopting comparisons with NEST and People’s Pension

Aviva’s performance reporting is reasonably good but we are still a world away from being able to draw real conclusions about member’s actual experience using Aviva’s workplace pension plans.

Aviva’s service standard – a valued experience?

Aviva appears committed to getting out and talking to its customers (not the employers but the people taking the risk – the policyholders), Last year they increased the number of workplace seminars

Aviva hosted 1,126 of these seminars in 2023 (1093 in
2022) and they were attended by 56,775 customers
(60,361 in 2022). Customer feedback remains very
positive and they result in higher engagement levels, for
example, increased online registrations and beneficiary
nominations following attendance.

While it is a little worrying that numbers attending fell, it is a mark of Aviva’s investment in its GPP book.

This seems to be echoed in Redington’s analysis of key service metrics, (this time quoted albeit anonymously).

Without details of the comparators, this graph is again open to selectivity (showing Aviva in a better light than they should be in). For instance if A-H are other insurers and consultants that Aviva compete against – fine, If F3 is a failing master trust about to be consolidated,  not so fine.

Conclusions.

All in all this is a well put together report that shows an IGC that is effective in its work and Aviva taking its IGC seriously. I give the IGC  a green for its effectiveness.

Generally the tone and style of the report is good (despite the odd lapse – on page 7 IGC members are referred to as “customers”). I suspect that where there is jargon, it is imported from reports from the investment team! I give the report a green for its tone and readability

The report does comparatively well at giving me an idea of “value for money”, but is still failing in some key areas and could do better. I give it an amber for its assessment of its current proposition.

We have moved a long way from VFM assessments of yore- this from the 2017 report