When pensions are useless

I don’t know what proportion of people’s savings – and specifically of what they think of as their long-term savings – goes into pensions these days. But I strongly suspect that in the era of auto-enrolment and pensions freedoms, the proportion is high and growing.

This, I suspect similarly strongly, is one of the reasons for the astonishing and alarming lack of financial resilience shown by so many people during the current Covid-19 crisis.  If they’re under 55 and their savings are in pensions, they can’t get at them – and so many seem to have no Plan B.

In the very short term, temporary interventions have largely hidden the scale of this problem.  The government’s furlough scheme, along with low cost loans and repayment holidays on various forms of lending (including mortgages) have kept financial disaster at bay.  But the reality is that these schemes will unwind later this year;  unemployment will spike;  and millions of workers in the gig economy will find their earnings much reduced.  Especially for people who are heavily indebted, all this adds up to an alarming outlook.

And, as I say, the one pot of money that many do have – their DC pension pot (or pots) – isn’t accessible until they reach age 55.

As this phase of the crisis gathers momentum, I can see one good thing coming out of it.  I expect a growing realisation that our cliff-edge model of pensions and retirement fits less and less well with the way people actually lead their lives.    The fact is that as people get older and their financial commitments increase, disruptions to their income have a more and more serious effect – and the need for a fairly substantial savings lifejacket, to keep them afloat in the short to medium term, becomes greater and greater.

I’m not sure about the mixed metaphor of cliff-edges and lifejackets, but, ploughing on, I should say that of course many people do have just such a lifejacket available.  There are billions of pounds – actually I think over a trillion – in personal savings and investments which are not locked away behind an age-limit restriction.  But, that said, I’d be interested to know what proportion of this amount is held by people who are actually older than 55, and therefore unaffected by the pensions lockdown anyway.  It’s people in their 40s and earlier 50s who are at the sharp end of this issue, and obviously the fact that they’re at or around Peak Outgoings is, in itself, the reason why they’re unlikely to be putting a lot away in non-pension savings.

Although I’m no expert in this sort of problem, I can dimly see the outline of a solution.  I can imagine how pension pots could evolve into something like Lifetime Savings Accounts, where the money is accessible at any time but there’s still a tax advantage in leaving it till later life.  If already in place, that kind of mechanism could come to the rescue of a great many LOBBLI – Lots Of Borrowing But Low Income – households over the next few years.

But obviously such a mechanism isn’t yet in place.  And the first step towards creating it is recognising that the need for it exists.

Real name: Smellie. Fake name: Arbuthnot? Bentley? Wellington?

Actually, my headline is unfair to the distinguished 18th century Edinburgh anatomist William Smellie, who kept faith throughout his life with the surname he’d been born with. But I don’t think he would have if he’d founded a 21st century financial advice business: in all probability, he’d have given it a fake name instead.

I don’t know why brands named after fake, or fictitious, founders annoy me so much. Of course I accept that you can call your brand anything you like, provided only that you’re not trying to pass it off as someone else’s, and the name you choose will reflect the perceptions you wish to create.  And in many areas – financial advisers/wealth managers, estate agents, wine shippers, classic cars dealers, art galleries, made-to-measure tailors – a good way to create perceptions of upmarketness and exclusivity is to give your business posh-sounding people’s surnames.

Originally, I suppose, these would indeed have been the posh-sounding names of the businesses’ founders. There was a banking family called Coutts, and a jeweller called Faberge, and a W.O. Bentley.  Very often, posh founders came in pairs: Rolls-Royce, Aston Martin, Turnbull & Asser, Mappin & Webb, Strutt & Parker, Berry Bros & Rudd. Even if the names weren’t inherently all that posh, they could quickly achieve poshness by association: I don’t suppose the names Knight or Frank inherently sound as posh as, say, Savills, but attach them to one of the very biggest of posh estate agents and the association works its magic.

Anyway, that’s all very well if you want to start a posh business and you’re called Saville or Coutts or Bentley or whatever, but what if you’re called Sidebottom or Smellie (I had a science teacher called Smellie, who in hindsight hadn’t chosen an easy career path) or Lipschitz?

Well, there may be other options readily available. When J. Rothschild Assurance needed a posh new name, it was fortunate that the London office was located in St. James’s Place and not Railway Cuttings. But more often than not, Messrs Sidebottom and Smellie just rummage through the phone book – or stroll around the streets in Mayfair where posh-sounding named brands hang out – and wait for inspiration to strike.

I haven’t researched most of the examples that follow, and I may be completely wrong to accuse the brands named of “synthetic” poshness. It may be that Aston Chase, an upmarket firm of estate agents in St John’s Wood, really was founded by a Mr Aston and a Ms Chase, for example: but I strongly suspect “Aston” was nicked from “Martin” and “Chase” from more than one posh source but primarily “Manhattan.” “Chase” also appears elsewhere as a poshness-signifier, BTW, raising my suspicions in the name Chase de Vere (“de Vere”? Really?).

But there are plenty of other names which arouse my strong suspicions, even without conclusive proof either way. You can Google pretty much any posh name you like and you’ll find a firm of financial advisers of that name – I tried “Bentley,” “Wellington”  and “Wellelsley,” and got a result every time (although I should say that I found two entirely separate Wellesleys, one of which had indeed been founded by a chap called Wellesley). Among double names, I’m not sure about Wren Sterling or for that matter Brooks Macdonald, but Punter Southall and Smith & Pinching have to be for real because nobody would make up “Punter” or “Pinching”.  The same goes for the leading estate agents in my home town, Guildford: “Gascoigne” sounds as fake as anything, but no-one would ever have invented the full name, Gascoigne-Pees.

Anyway, sometimes it’s more straightforward. I’m writing this blog because I was irritated today by a trade press article about an IFA consolidator called Ascot Lloyd, which has 15 offices but none in Ascot and no apparent connection to Lloyds as in Banking Group or as in Of London.   And I also saw a piece about another firm called Berkeley something, but to be honest I can’t remember what the “something” was and Googling “Berkley” and “financial advice” doesn’t help because there are loads, including one called Berkley (sic) Square Private Clients, who are of course located at 14B Market Place…. in Chippenham. And then there’s the controversial one, Berkeley Burke, which was caught up in some rather dodgy business to do with SIPPs recently. And then a few years ago there was another rather dodgy one called Berkeley Berry Birch, which raised the possibility of hybrid fakery in which a real Berry and Birch associate themselves with a fake Berkeley.

As I say, I don’t know why I find this fakery so annoying. Other kinds of fabrication don’t annoy me at all: on the contrary, they strike me as entirely defensible exercises in brand positioning. Name-seekers can rummage about in plenty of other pockets of language offering instant (fake) poshness, for example turning to words lifted from hunting, shooting and fishing; architectural terms; Latin; mythology; art; or classical music, especially if Italian.   I’m fine with all them. But for some reason, it’s obviously-fake people’s names that really wind me up, leaving me expostulating “Ascot Lloyd my arse.”

Thinking about it, I reckon perhaps I know what it is. I really wish they’d bite the bullet, and play the hand they’ve been given. I’m sure they could do something much more memorable if they stuck with Sidebottom & Smellie.  

How I blew the chance Candida gave me to join David, Dave and Bill

I was responsible for a lot of rotten ads in my 35 years in agency creative departments (the first few as a copywriter, then most of them as a creative director).  Looking back at them all, I see a pyramid – all those bloody awful ones down at the bottom, and then narrowing steadily towards a very, very much smaller number of good ones up at the top.

Right at the top there’s just one – probably the only ad for which I can claim some responsibility which I think is good enough to stand comparison with anything else, produced by anyone else, over that long period.  There’s a cropped and slightly blurry photo of its type area here, from which you can’t see that it’s the first of 20 or so that we produced in a campaign for an obscure children’s savings scheme called Jump, based on the more-or-less-equally obscure Witan Investment Trust.

And before I say anything else I should say that I didn’t write it.  Jenny Bond did, combining biographical details from her own children’s lives (being born blonde, swimming galas) as well as mine (being a Goth, being dragged off to France).   And the campaign was originated by Chris Wardle and his art director James Ellis, who I think was the only person to really get it despite having no kids of his own at the time.

But I think I can fairly claim to have had quite a lot to do with it, from the idea of developing a children’s savings proposition for Witan, through to the positioning designed to resonate among middle-class parents with ungrateful children, through to the creative brief which aimed to bring to life all the insights we had into that kind of family relationship (most of it, of course, drawn from personal experience).

From which came first Candida writes… and then the other 20 or so executions in the campaign. (Many of the others being equally good, but not of course being equally first.  And, I have to say, none of the others having the first line “I didn’t ask to be named after a fungal infection,” which to my mind is the best first line of copy in any advertisement ever.)

Apart from that first line, why do I think it’s so good?  I’m not going to write a lit crit essay here.  If you don’t get it, you don’t get it.  But in a sentence, because in one small black-and-white picture and 71 words, it absolutely nails everything you need to know to understand how relationships work across half-a-million middle class families  spread across the country from Tunbridge Wells to Richmond on Thames to north Oxford to Wilmslow to Edinburgh New Town – and, what’s more, families and relationships of a kind that was then and still are now more or less unknown to, and unexplored by, other advertising.

OK, that was a longish sentence.  But here’s a shorter one:  the campaign always seemed to me to provide us with the key to a previously-undiscovered secret and magic garden, where we could always go to create more great campaigns for more clients targeting those same half-million affluent families with the same breathtaking freshness and precision.

Except here’s the regrettable part:  for some reason that I can’t explain, we never really did.  Never once.  Having found the key and unlocked the gate, we never came back.  The only time I sort of did was ten years or so later, in my one-man consultancy life, when I was responsible for the brand definition and development for the relaunch of what had been the National Counties Building Society, but which we re-invented as the Family Building Society.  This time it wasn’t just that I didn’t write the ads:  by then I didn’t even have an agency.  I worked with my friends at AML to bring the positioning to life, and although the “children” in the family relationships were at least ten years older than Candida and her crew, the genetic code was clearly similar.  And I had exactly the same feeling, that somehow here I was back in the secret garden again – and then, again, we left it and I haven’t been back since.

Either in reality or in perception (not sure which) most of the better-known creative talents in this business are known for mining a fairly narrow seam.  If we talk about a David Abbott ad, or a Bill Bernbach ad, or a Dave Trott ad, or whatever, we have a clear mental picture of the sort of ad we’re talking about.

Of course no-one has the faintest idea what a Lucian Camp ad might be like.  But if only I’d hung around that secret garden for longer, then with Candida’s help things might have turned out different.

Is “Do nothing” really your smartest advice for me?

I have literally lost count of the number of articles I’ve read recently in which financial advisers have been complimented – or, more likely, have been complimenting themselves – on their brilliant strategy for helping their clients weather highly-volatile investment markets.

This brilliant strategy is easily summarised:   do nothing.  Once the markets have plummeted and taken a 10, 20, even 30 per cent bite out of the clients’ portfolios, the smart adviser works hard to convince the clients – and indeed to convince him or herself – to take no action at all, just sit tight and wait for the markets to come back.  “You can’t time the markets,” they say.  And there’s another little saying which they like because it almost sounds quite clever, “It’s time in the markets, not timing the markets,” which most people don’t actually get because it just sounds like the same thing said twice.  And as the days of doing nothing pass by, the advisers congratulate themselves on doing a better and better job.

Now I’m not saying that they’re wrong about this.  In the long run, doing nothing may be the least bad option.  But if I’m not saying they’re wrong, I am saying several things of a distinctly dubious and lukewarm nature, such as:

  1.  You see, for millions of ordinary people, there’s one of your biggest problems with investing right there.  All sorts of things can start going badly wrong – a meal you’re cooking, a movie you’re watching, a journey you’re making – but I can’t think of any others where no matter how horrendously wrong they’re going, the best and most expert advice available is just to strap yourself in, sit tight and hope it turns out all right in the long run.  It’s not how we like to handle such circumstances.  It feels powerless and pathetic.  

  2. Also – and kind of on the other side of the same coin – there’s one of your biggest problems with expert financial advisers right there.  Leaving aside the obvious point that the financial adviser you really want is the one who gets you out of the market the day before it crashes 10, 20 or even 30 per cent, is it really true that there’s really nothing worth doing?   Even if, say, at this moment, you’re still invested in airlines, pub groups and cruise companies?  If that’s the case, what “do nothing” really means is “you and your adviser aren’t smart enough, or quick enough, to get out while it’s still worth it, so now you’ll have to stay put with the rest of the mugs and the sluggards.”  Probably true.  But not what you want to hear.

  3. I know I keep making this point – it’s a consequence of my age -but it’s different in decumulation.    (That’s “different” in the sense of “worse.”)  If you’re drawing an income from your investments rather than adding to them, in falling markets you suffer from pound-coast averaging in reverse – pound-cost ravaging, some call it.  Sitting tight for years and waiting for markets to come back is a very unattractive option.

  4. Finally – and sorry if this sounds a bit mean-spirited – “Do nothing” isn’t really the kind of professional advice that I expect to pay a lot of money for.  It may well be that it’s advice born of a lifetime’s learning and experience, and the fact that it’s only two words and doesn’t sound very inspiring is neither here nor there.  But it is only two words, and it doesn’t sound very inspiring, and I reckon it’s worth about £250 tops.

This last point doesn’t mean that advisers should generate complex programmes of activity which only make things worse, simply in order to justify a bigger fee.   

Perish the thought.  That sounds like the sort of thing that only a marketing consultant might do.

Whatever we need from financial services just now, it seems we’re not getting it.

Impressively early in the coronavirus drama, even if I say so myself, I wrote a notably grumpy blog on the subject of “peace of mind.”  A huge proportion of financial advisers claim to offer it, I said, but in reality, remarkably few of their clients really enjoy it – especially at times when our world is becoming dramatically pear-shaped.   For most of us, I said, peace of mind is conspicuous by its absence.

Ever since, I’ve been hunting around the echo-chamber of stuff that will confirm and reinforce my views for evidence that I’m right about this, and some highly confirmatory consumer research has just come my way.

Blue Marble, the innovative and insightful research firm run by my old friend Emma Partridge, has set up its own programme, combining qual and quant, to look at post-coronavirus consumer behaviour in different parts of their lives.  The last round, just a few days ago, looked at financial behaviour.

Two questions – or rather, two answers – jumped out at me from the quant.  Among a nice big nationally-representative sample of 2000 adults, over half said they felt “more uncertain about their future” than before the outbreak (rising to over 60% among under-35s), and 39% said they were “more worried about money” (rising to over 50% among under-35s). 

These figures are high – certainly high enough to cast doubt over that “peace of mind” nonsense – but if anything I was surprised they weren’t higher.  Who are these 40% of under-35s who aren’t more uncertain about their future?

The clue to this, I think, is in the qual.  What this is telling us, in short, is that for the time being we’re too worried about the present to have the head-space to worry about the future as well.  I should say that there are some who are working from home, getting paid as usual and actually taking some pleasure from the enforced saving of a locked-down lifestyle. But the majority – whether students unable to find holiday jobs, pensioners with savings “in tatters,” furloughed workers, or self-employed people worried about whether their customers will pay their bills – have real anxieties in the here and now.    Combine that with the lack of any clear sense of where we’re going with all this, and whether (and when) something approaching normality may return, and it’s no big surprise that for some, the time to start worrying about tomorrow hasn’t quite arrived yet.

I think we all know that this will change, though, and when it does the role of financial services providers will be important.  At the moment, it doesn’t seem that it’s very important at all:  the second main theme I took out of the research is to do with another absence.  The fact is that so far in this crisis, the role and the actions of the entire financial services industry haven’t made much of an impression on Blue Marble’s respondents.  While just under half of the quant respondents say that supermarkets have responded to the crisis “very well”  (those loo roll shortages obviously fading from memory), only 9% say the same of banks and building societies.  In the qual, there are a few shoutouts for “good communications” – Nationwide, M&S and John Lewis picking up the odd positive mention – but on the whole it’s a case of the curious incident of the dog in the night time.[1]  Of the respondents with a financial adviser, for example, only one claimed to have received any communication (although I think in fact others must have received 10%-drop letters), and the one solitary strong positive across the whole study was a comment from a delighted motor insurance customer offered a partial refund to reflect reduced car usage.

There’s nothing terrible or scandalous here.  Very few respondents had anything seriously critical to say:  the most widespread grumble was to do with the perceived “hypocrisy” of lenders maintaining unjustifiably high rates while claiming to act in the national interest.  But equally, beyond that small handful of scattered positives, there’s nothing impressive or admirable either.  No institution, and no sector, seems to have seized the opportunity to capture positive attention by doing something – anything – to stand out and capture customers’ imagination.  Heaven knows plenty of financial institutions – actually almost all of them – claim a “focus on the customer,” or to be “truly customer-centric,” or to “put their customers first.”  But given a great big rather scary opportunity to prove the truth of claims like these, Blue Marble’s  research tells us that rather like that empty promise to give us “peace of mind,” fine words like these are mainly delivered from safely below the parapet.


[1] “But Holmes, the dog did nothing in the night-time!”  “That, Watson, was the curious incident.”

Come on, it’s not difficult – there are only two kinds of advertising ideas

I mentioned that I’ve been involved recently in helping a client choose an agency, and so for the first time in a while I’ve been on the receiving end of a bunch of creative presentations.

Our brief asked for a big (or biggish) idea that could be executed across a number of different executions.  The ideas we saw took me back instantly to my long years as a creative director, and to the single comment I remember making most often in response to the thousands of ideas I was shown.

This was, almost always, “Sorry, but we need a Type 2 idea and this is a Type 1,” or, much more infrequently, “Sorry, but we need a Type 1 idea and this is a Type 2”.

From which you’ll gather that there are two types of campaign ideas.  You may be wondering what they are and what’s the difference between them, so I shall explain.

A Type 1 idea is a campaign idea that lets you say the same thing in lots of different executions.  The great Heineken campaign  Refreshes the parts other beers cannot reach is a Type 1 idea.  So is Should’ve gone to Specsavers.

A Type 2 idea is a campaign that lets you say lots of different things in lots of different executions, but in a way which is recognisably part of the same campaign.  Tesco’s Every little helps is a Type 2 idea.  So are Alexsandr and Sergei the meerkats for Comparethemarket.com.  So, in a slightly different way, was what is still the greatest body of work ever produced for a  single client by a single agency, Doyle Dane’s 1960s US work for Volkswagen:  there wasn’t exactly an idea, but there was a ruthlessly consistent look and feel and tone of voice, and an extraordinary attitude which said that in 1960s America, the home of the giant chrome-trimmed V8 gas guzzler, VW would revel in being ugly, small, cheap and slow.  

The fact is that for all their fame and for all the awards they’ve won, there are very few Type 1 campaigns.  There’s a simple reason for that, which is that very few brands can afford them.  Only big brands in big categories can swallow the cost of making campaigns consisting of big, single-minded, simple brand messages famous.  Back in my early days in Big Advertising I worked on a few – but ever since, I’ve worked in a world of Type 2 ideas.

Almost every brand that uses marketing communications needs a Type 2 idea.   A Type 2 idea provides some consistency, recognisability and distinctiveness to a whole bunch of messages in a whole bunch of media.  For example, an asset manager might need some “hurry hurry” ads reminding people not to miss the ISA deadline, an ad in the trade press about winning an award, some thematic messages about how active management adds value, a mailpack inviting intermediaries to a seminar, a series of digital Market Outlook pieces from the fund managers, and so on and so on and so on.

But here’s the thing:  creative people would infinitely much rather come up with Type 1 ideas.  There are two main reasons for this.  First, on the whole, they believe that Type 1 ideas are “proper” advertising, especially if they appear on TV.  Considering how few of them there are, Type 1 ideas win an awful lot of awards.  And second, they’re much, much easier to do.  Coming up with the idea in the first place is hard, but once you’ve done that you can bash out a hundred scripts by tea-time.   Or, perhaps more to the point, before down-the-pub time.

Want to put this to the test?  Probably not, but just in case, here’s your idea:  someone can’t do something, they drink some Heineken and then they can do it.  A hundred ideas by tea-time?  Well, I suppose it depends a bit on what time it is now, but if it’s before 2.30 I’d say you’re in with a chance. 

(I should add that most of those hundred ideas won’t be any good.  Writing great Type 1 scripts is harder than it looks, precisely because the idea is so clear and obvious:  as a result, good scripts have to include some kind of twist or surprise to make the commercial worth watching.  If you know from the first frame exactly what’s going to happen, it’s not a good script.  But we’ll save this more advanced discussion for another time.)

Type 2 ideas work the other way round.  It may not be so hard to come up with the original big idea – quite a few, as in my VW example, are little more than a look and feel, a tone of voice and an attitude.  (Usually, also, a strapline, although VW didn’t bother and didn’t need one.)  But then you’re going to need to come up with further ideas – smaller ones maybe, but ideas all the same – for every single execution.  When you have an ad to do for VW about the reliability of the air-cooled engine, your look and feel, tone of voice and attitude don’t tell you to write How does the man who drives the snowplough get to the snowplough?  But if you do come up with that idea, you know you’ve written a VW ad.

We almost always need Type 2 ideas.  In my recent agency selection project, that’s certainly what the pitch brief specified (although, I should say, without these unfamiliar Type 1 and Type 2 labels).  But altogether, in the tissue meetings and the final presentations, the three agencies must have showed us over a dozen different concepts – and of those, all but a couple were Type 1.

Actually, opinions aren’t really very much like arseholes

You know the old saying, “Opinions are like arseholes – everybody’s got one”?  Well, that may be true for some people, but not for me.  I’ve usually got at least five.  Opinions, that is.

The trouble is – and it’s a trouble ignored by about 99.9% of those expressing opinions on social media and elsewhere – that opinions depend on the facts that underlie them.  As the facts change, or as new or contradictory ones come to light, opinions have to change too.  And in big, complex, multi-faceted news stories, facts change and contradictory ones come to light all the time.

Here’s a current coronavirus example.  It’s a fact that most hospitals are doing much less non-coronavirus work than usual at the moment, and it’s also a fact that the newly-built Nightingale Hospitals around the country are empty, or nearly empty. 

So it’s been widely suggested that it would be a good idea to use the Nightingale Hospitals for coronavirus patients, so that other hospitals could do more to treat people with other conditions. 

What opinion do I have about this suggestion?  Well, you can choose from the following:

  1. Good idea, let’s do it.

  2. Sorry, can’t be done.  The problem with the Nightingale Hospitals is that they don’t have any staff.

  3. Good idea, but there’s a snag.  Nightingale Hospitals don’t have any staff, so the only solution is to transfer staff from other hospitals, which would mean they wouldn’t be there to treat other conditions.

  4. It’s not necessary.  In fact the other hospitals have over-reacted and most are less than half-full with coronavirus patients.  They could perfectly well do more to treat other conditions anyway.

  5. You’re missing the point.  The reason other hospitals aren’t treating other conditions is not that they’re full – it’s that they don’t want their staff or patients to catch coronavirus.  If we could provide them with the right PPE, the problem would go away.  

Which is it?  I’ve no idea.  And even if I could figure out which of these five best fits the facts (which I can’t), there’s every possibility that another new fact would emerge and create a sixth opinion, and then a seventh, and then an eighth…

Which leaves us in a situation even more anatomically difficult than having eight arseholes.  The only sustainable strategy is to have no opinion on the matter at all.

Captain Scott and the coronavirus

Captain Robert Falcon Scott and his two surviving companions nearly made it back from the South Pole.   They died in their tent, trapped by a ferocious and relentless blizzard which had kept them pinned down for over a week, just eleven miles from a depot where they had left fuel and food.  So near and yet so fatally far.

It may not be in the best of taste to find an analogy between their terrible sufferings and the hardship experienced by at least some people in early middle age who are losing their jobs in the current pandemic, but a sort of parallel does exist.  At age 55, these people could start drawing their pensions.  At 52, 53, even 54, they can’t.  (They can’t do equity release till 55 either.)  Those pots of their money are almost within reach, and for many still going through those horrendous years of Peak Outgoings they’re desperately needed very soon after the earnings tap is turned off.  But so near and yet so far.

Even after so many bumps in recent years on what we still think of as the “road to retirement,” this latest crisis points out more clearly than ever before  how wrong, how out of date and how deeply unhelpful that construct has now become.

Sure, there are people whose working lives still consist of unbroken salaried employment, achieving a consistent record of pension contributions, until they reach a pre-determined age when they retire and live on their pensions, of whatever sort and value, until they die.

But the proportion of people whose lives follow this simplest of storylines is falling all the time.  More often, there are some periods of continuous employment, but interrupted from time to time by redundancy followed by periods of unemployment – these periods, especially later on, resulting in shifts into self-employed consultancy with varying degrees of success, and then shifts back into the next period of regular employment when a new “proper” job is found.  And although I don’t have figures to prove this, it feels to me that this kind of volatility becomes greater, and the cycles shorter, in people’s later working years.   I can think of friends around my age or a bit younger who seem to have moved on to something different each time we meet for a roughly-annual lunch or drink.  

(When I last saw one of these friends a while ago, he’d just been made redundant from his latest senior corporate role.  “Have you retired?” I asked him.  “I’ve no idea,” he replied.  “I hope not.”   I thought that was a pretty good demonstration of the way that a cork in a storm-tossed sea stands for the shape of many people’s careers these days an awful lot better than a journey along a straight, smooth road.)   

I have a feeling I could have expressed all this better, but even so I hope the main point is clear.  There’s a big, unhelpful disconnect between the kind of lives we imagine in our financial planning, and the kind of lives that more and more of us actually lead.  And the result is – back to Captain Scott for the last time – that we’re all too likely to find ourselves hunkered down in our tents as our food and fuel run out, while a lifesaving stash waits a few miles out of reach.

This is about plans, and about products, but before any of that it’s about perceptions.  For some reason, perceptions about the way we lead our lives are right up there among the hardest and slowest to shift.  Ask a class of primary school children to draw scenes from family life and they’ll take you back to the 1950s – detached houses with front doors in the middle and chimneys on the roof, and Sunday lunches with families sitting at dining tables while Dad carves.

Sometimes this kind of fantasy doesn’t do any harm, but sometimes it does.  As far as the shapes of our financial lives are concerned, I think our outdated assumptions, about work and about an increasingly blurry thing which we still call “retirement,” are doing us no good at all. 

Footnote: Reading this piece again, I can see it might be taken to imply that people should be able to access their pension pots at any age. Actually I didn’t intend to imply that, or indeed to imply any other specific solution. It does seem to me that given the way we live today, too many of us keep too much of our long-term savings locked away until we reach age 55. But as for the best solution, well, that’s a tricky one…,

A word of advice from one member of the Silly Names Club to another

Way back in my schooldays, I didn’t like being called Lucian Camp very much.  It made me stand out at a time when all I wanted was to fit in.  I’d have been far happier with the anonymity of either of my best friends’ names, Andy Hall or David Green.

Years later, I learned to see it differently.  I remember a comment in the biography of the Saatchi brothers as a bit of a Road-To-Damascus moment.  Charles, or possibly Maurice, said how grateful they were for that strange, awkward surname:  they wouldn’t have achieved half as much, he said, if they’d been boring and forgettable old Charles and Maurice Williams.  That’s the upside of weird names.  You stand out. 

But of course at times when you’d prefer to keep your profile as low as possible, it’s the downside too.   The unhelpful side of weird names is, I’m sure, painfully clear just now to the insurance company Hiscox, who certainly aren’t the only insurer getting media attention for declining to pay coronavirus-related claims on their Business Interruption insurance. But they are the only one to do so with a name as strange, and silly, and, unfortunately, memorable as Hiscox.

How stupid does a rule have to be to make us mad enough to fight it?

Here’s a story I picked up in a webinar yesterday, which goes on a bit but bear with me.  It’s to do with the borderline between financial guidance (unregulated) and financial advice (mega-regulated, or megulated for short. by the FCA).

It’s about firms which offer services to self-directed investors, and which therefore don’t want all the complexity, cost and risk of offering full regulated advice.  It’s absolutely fine, within the definition of guidance, for firms like these to publish lists of their favourite funds, which if they like they can break down into sectors – favourite UK equity funds, favourite corporate bond funds, favourite absolute return funds, whatever.  And of course it’s absolutely fine for customers to choose to invest in these funds:  if the firm providing the list offers investment services, like say Hargreaves Lansdown, people can make their investments through them.

But imagine that a year later, say, this favourite fund has gone tits up.  The star manager has left, the new manager is an idiot and the performance is falling like a weighted sack.  Needless to say, the firm that favoured the fund a year ago now removes it from its Favourite Funds list.

And of course as part of its regular communications with its customers, it tells everyone who has invested in the fund that it’s done so.

Except that it doesn’t.  It’s not allowed to.  Because it says something specific to a selected group of people, on the basis of some specific characteristic that they share, that communication would be “advice,” not guidance.  To stay the right side of the advice/guidance borderline, the regulator insists the firm must choose one of two other options.  It can:

  • tell all its customers, including the huge majority who haven’t invested in this fund and couldn’t care less, that they’ve dropped the fund from the firm’s Favourite Funds list;

  • tell no-one.

These options are both stupid and ridiculous.  The first just adds to the never-ending avalanche of pointless and irrelevant paper (or pixels) that customers receive from their investment services providers, confirming in its own small way their perception that anything they receive is likely to be pointless and irrelevant.  The second deliberately withholds important information which is likely to have passed unnoticed by many investors, confirming in its own small way that investment services providers are always keen to shout about reasons to buy, but unhelpfully reluctant to mention reasons to sell.

So why is it like this?  Incredibly, it’s because the FCA thinks that defining, and policing, this kind of border between advice and guidance works in some unfathomable way to consumers’ advantage.

And also, it’s because we’re all too craven, and too brow-beaten, and too despairing of finding anyone with even a quarter of a brain who’s willing to listen to us, to let out even a squeak of protest,.