“Vale” – David Hare.

If an email could thud, it would be the annual mail I get from David Hare, the chair of Phoenix’s, Standard Life’s and  ReAssure’s IGC. In total these three reports weigh in at 151, 100 and 116 pages respectively, that’s almost 400 pages of reading and though there are abbreviated reports as well, that is too many pages. Read digitally or don’t read at all, forests aren’t grown for this!

This will be the last of David’s reports, he has been an IGC chair from day one and he’ll nearly have done a decade of them. Over that time I’ve had some fierce rows with him. I’ve crossed swords with his predecessor at Standard Life (now on the IGC board) but I am going to miss the dull thud of that email.

Standard Life’s GPP value for money assessment is awkward

Investment Services improving, Customer Services falling and Investment Pathways still offering marginal value for money. That’s what we can read from the Standard Life IGC VFM assessment.

I have the same issue with this assessment as I had with L&G’s, I want to think about VFM as the VFM Framework asks me to. I want to look at net performance, quality of service and cost and charges and I want these to be delivered to me as Red, orange or green.

The IGCs has been asked to do this for the accumulation service of Standard Life’s GPP and for the investment pathways, two products , three RAGs – that’s it.

If we don’t get to this simplification of process, we will continue to have vast sprawling IGC reports which are a monument to complexity but do little for savers or employers working out whether they are in a good, average or rotten personal pensions.

The only way for people to work this out for themselves is to look at what has gone into the  their personal pension and compare it with what has come out. This requires an extremely complicated financial calculation which can only be achieved with the help of modern computing and with accurate data feeding into the process.

Until IGCs take as their starting point for assessing the member’s VFM , the risk experience of each saver’s pot, all comparisons of VFM will be based on proxies based on top-down reporting. Understandably, providers do not want to be judged on experienced performance but that is not a good reason for IGCs not to use this method of assessment.

I cannot give this VFM assessment a red, it is too conscientious , but nor can I give it a green, it is not doing what it is being asked – I give it an orange

But the work of the IGC is effective

Standard Life’s IGC lays out simply and clearly how it intends to improve VFM for savers over the coming year. The challenges it offers the company are detailed and sensible.

Similarly it calls on savers to make better use of their money, upgrading wherever possible to more modern, better value products.

You can read the five paged  simplified report here.

This is a functional IGC which is doing its job of protecting savers and getting them more for their money – properly. The work of the IGC deserves its usual green rating.

Tone and style

Unusually for someone who makes his living analysing numbers, David Hare is an unusually good writer. Along with Kim Nash (Fidelity) he is the best of the IGC authors and this reports read like its predecessors – well!

There is a slightly pedagogical tone to Hare’s writing, he is determined to teach us how to be better at managing our pensions – something rather Calvinistic in his make up.

Here is an example

We strongly encourage you to review your pension plans in these turbulent times. Here are some suggestions for you.

The problem is not with the opening five pages of this report but with the vast hinterland of supporting material that follows.

I admit that I have not read all the supporting materials but I like the Q&A system that the report uses. All the same , a lot of the analysis is external and anonymised, and I’m not quite sure that this long-term performance graph equates to the 7/10 that the IGC gives the investment management of the GPP

The three year figures are slightly better but…

Standard Life cannot be considered to be providing much more  than average performance.

In conclusion

I am not sure that the sheer weight of this report is worth it.

The report gets a green for its tone  and for its effectiveness but as a value for money statement it leaves something to be desired and only gets an amber (trending red)