It was really good to hear Kevin Hollister explain Guiide on the VFM podcast this week. I don’t think that any guest of Nico and Darren has taken more of the podcast than Kevin does and he talks about what is his passion, guiding people to good decisions at retirement using an algorithm he has devised and software he has created. I can think of few actuaries who have used their skills with such application for DC savers. Maybe Adrian Boulding and he live in that space. It was good that he was on the VFM Podcast.
in praise of Kevin Hollister
You can listen to the podcast here. His answer to the question of what he considered VFM was straightforward, “being able to use a good service like mine for free“. I hope few of us would deny him the value of what he is doing.
There is an interesting conversation about the concept of “default decumulation” where Nico points out you can’t call a default way of spending your money – “default” if you don’t have the bank details of the person you want to pay a pension to. He’s right of course, taking money from your pension pot involves giving someone your bank details and it involves having a bank account (there aren’t many of us without an account which is not something I could have said when freedom arrived 10 years ago).
The Guiide approach leads people to the right proactive decision and is designed for people who aren’t going to be “defaulted”, because the people who get the default do not want to feel in charge of their income. One of the findings of the FCA’s Retirement Lives research was that people who did take decisions over their pension were generally confident that they had done the right thing. We experts might differ from them but that shows how little we know about happiness. We may think that those people will turn out to have run out of money and blame them but who are we to say they could have been happier? The point of Guiide is it gets people to the point where they feel confident of the decision they make and Kevin is not making money from the decision they take.
Kevin’s money is made by institutions that ask him to tweak his algorithm to help their customers make reasonable decisions and here we must rely on the actuary’s integrity and the integrity of the profession to ensure that reasonable choices are made. Kevin has taken no short-cuts , stuck it out through some tough times boot-strapping. I greatly admire him, it is the AgeWage story too.
Kevin wasn’t drawn into a wider discussion on the Penson Investment Review that had been published on the day of the podcast. The podcast will no doubt be full of thinking about fiduciary dilemmas in future and Kevin will be back developing his product to be used by thousand more users.
Guiide has successfully avoided the FCA (we didn’t and it was our folly). Mass market solutions need to avoid Advice in the FCA’s sense of the word and Guiide does. I hope that he will prosper following changes to decision making at retirement introduced by the Penson Bill and subsequent Act.
