The final day of the Conference was an exhausted one , the plenary hall was largely empty for some excellent sessions and many seemed (the observation of Rory Sutherland) to have gone home early frightened of travel. Certainly my late afternoon journey back to London was full of people getting around using other routes than the West Coast.
Global economics for pensions need to follow long-term trends (says Faisal Islam)
The paucity of delegates was a shame as there were several sessions of intellectual vigour. We had a final morning mercifully free of advertisements that allowed those who attended to exercise their brains.
Early on , Faisal Islam of the BBC gave us his view of world economics , focussing on China. The long-term economic trends may be obscured this month by the Iranian war but I sat with Tom McPhail who observed that Faisal was better when off script and talking with John Chilman. We too must put aside the present crisis in taking the long view of pensions.
Investing regionally needs people on the spot
There followed a session on delivering regional investment through local people in Wales, Scotland and Centrally in England. This worked when it focussed on the needs of local economies and Sally Bridgeland particularly brought out how pension funds can help in Wales through the Bank of Wales. Richard Lockhead would have been better if he had been less abrasive to everyone who wasn’t Scottish in the Hall. Richard Law-Deeks spoke for the Central Pool of the LGPS. One question that came up throughout was that if pensions get so big that they cannot invest in small ventures (for lack of time), then regions will lose out to the big projects and to overseas.
I was struck by the importance of the Bank of Wales and the need for local sources of finance into which funds can dip. Let it not just be LGPS m USS and Railpen that does so, let us hope that the large mastertrusts and the CDC schemes, will have the energy to go local.
I am glad I made it to to a session of default pathways for DC master trusts.
The difficulty of offering people the freedom of drawdown from pots was in evidence in this session, I had to admit to being quite befuddled by solutions presented by Jenny Holt of Standard Life and Peter Smith of TPT. Finding ways of bending default solutions to the needs of individuals seems to misunderstand that the default pension saver is after a pension.
Janette Weir spoke of her firm (Ignition House’s) experience of what people do when left to their own devices and she used the work she does each year with the FCA. Her frustration was palpable in the hall, we fealt it!
The difficulty that the providers have is to justify the need for flexibility in default pathways when most people who follow the default solution do not want to take decisions or communicate their needs so they can be defaulted into an appropriate fund.
I hate to repeat myself, but those who don’t know what they want by way of financial planning are anticipating their pension plan to pay a pension.
Behaviour finishes us off
The morning and the conference finished off with two quite different speeches from behaviouralist. Margaret Heffernan talked without slides for 50 minutes about how to invest through successful leadership. This was a very well paced and beautifully delivered session on how we can get good decisions out of leaders by investing in getting structures they can operate in. I hope that there is a video made available as this was intellectually a class apart.
That is not to denigrate what followed, which was the wonderful Rory Sutherland who was so full of fun, ideas and emotional intelligence that we could have been listening to him and missed our trains and planes some time in mid-afternoon.
He explained what we all know, that we must make pensions emotionally attractive, not just for forty years ahead but for today. Marketing pensions to large numbers of people requires a skill set which Sutherland shared with us and which I will do my best to learn from in converting saving for wealth to saving for pensions. It cannot be done with brain cells alone, we need to understand what makes ordinary people react positively to ideas.
Rory Sutherland finished us off by putting a smile on our faces. Thanks Pensions UK for a good last day, I at least was there throughout and happy to report a stimulating final morning.
