This pensions thing is marvellous. Unless of course it’s terrible.

Great news!  From 6th April, consumers aren’t going to be nannied into more-or-less compulsory annuitisation any more!  They’ll be completely free to do whatever they like with their pension pots, at any time after they reach the age of 55!  A whole new world of choice and opportunity is opening up to them!

Terrible news!  From 6th April, the lifelong financial protection offered to consumers by more-or-less compulsory annuitisation will be removed!  Consumers will be left bobbing about like corks on stormy seas, at the mercy of their own irresponsible impulses and more and more scammers with too-good-to-be-true propositions!  A whole new world of confusion, misery and later-life poverty is opening up to them!

Both these glosses on the Pensions Freedom story are entirely justifiable.  Indeed, both kinds of outcome will be experienced by different consumer segments.

Which is the more generally accurate way to tell the story?  I don’t know.  But over the year since the changes were first announced, the industry has been so emphatic that it’s the first version, I’d say it’s very likely that it must be the second.


Stock market investing still doesn’t really seem to work

A few days ago, the FTSE-100 Index reached an all-time high.  Excellent:  clear evidence of the long-term returns available from stock market investment.

Except that it only maintained that all-time high for a matter of a few hours, and then sank back below the previous high again.

And rather more troublingly, the previous high had been achieved rather over 14 years ago, back at the very end of the previous century, in December 1999.  So, in simple terms, if you have an investment in, say, a FTSE-100 tracker fund which you’ve held for 15 years, its capital value is now slightly less than it was at the outset.  Actually, if you take the effect of charges into account, it’s significantly less.

OK, OK, this is a bit misleading.  There are at least three reasons why it isn’t quite as bad as I’m saying:

1.  You’ll have been earning dividends over these 15 years.  If you look at your total return, with dividends reinvested, you’ll be up by, I don’t know, quite a lot.

2.  Although the index hasn’t been above its December 1999 level over the period since, it has fallen a long way below, on more than one occasion.  If you’d successfully exploited the index’s volatility – in other words buying at the bottom and selling at the top – you could have made a lot of money despite the overall absence of growth.

3.  We’re only talking about the FTSE-100 here.  Various other indices – including crappy little ones in crappy little emerging markets, but also rather more grown-up ones like the Dow – have gone up a great deal over the same period.

Still, it’s definitely kind of depressing that the index to which most of us are most heavily exposed has shown absolutely no capital growth over 15 years.  I can’t tell you how many times over that period I’ve written copy about the “superior long-term returns you can expect from an investment in stocks and shares.”   As I asked rather anxiously in a blog I wrote six or seven years ago, how long does the long term need to be?

Language gap

You know that point I’ve made a million times – well, more like a dozen really – about the language gap which exists between those few of us working within financial services and those millions of us outside?

I don’t think I’ve seen a better example than Invesco Perpetual’s current advertising campaign, appearing across a wide range of print, online and outdoor media much of which is clearly targeting non-hobbyist investors.

They’ve bet the ranch on a single execution with a single one-word headline, which makes for a campaign about as concentrated as it could possibly be.  Unfortunately, though, the word they’ve chosen is Patience, which is a terrible choice – boring and meaningless to most, but entirely counter-productive to quite a few.

To investment people, I suppose, it introduces an idea about long-termism.  Invesco Perpetual fund managers, it says, are there, Buffett-like, to stay.  I suppose that’s good, although in these short-termist times I fear there are quite a few investment people who prefer the here-today-gone-tomorrow flibbertigibbet approach, and rather fear that the Invesco Perpetual portfolios will be stuffed with patiently-held stocks bought in bygone eras like Kodak, Polly Peck, Racal and British Leyland.

But it’s what this word means to the 58 million people in this country who are emphatically not investment people that intrigues me.  Patience.  Why patience?  Patience how?

Looking for some kind of context – a known circumstance in which the word is often used and understood – many will think of football.  Those who support frequently-underperforming teams like mine know exactly what “patience” means.  It means: “Yes, results are rubbish at the moment, but please stop booing the manager and give him a few more weeks to try to turn things round.”  (Then, almost invariably, a few weeks later the Board will run out of patience and the manager will go, as for example Gus Poyet did at Sunderland yesterday.)

It’s difficult to imagine why Invesco Perpetual would want to spend a very large sum on conveying this grim message about their current performance and their own managers’ capabilities.  But that’s the sort of thing that can happen when you don’t speak the same language as most of your readers.

Before you start trying to engage consumers, how about trying to engage me?

Under the auspices of the industry-wide trade body TISA, a large and unwieldy group of 50 financial institutions have come together to form something called the Savings and Investments Policy Project.  (You might imagine this would have the four-letter acronym SIPP, which would be unfortunate and confusing because this already belongs to Self Invested Pension Plans, but with this in mind the team have cunningly acronymed it TSIP.)

TSIP has been working away on its policy proposals, and yesterday held a half-day conference to summarise them.  There are six, all intended to encourage ordinary people to do more saving and investing so that they are better prepared for the future, and also of course so that they give TSIP member firms more money.

As far as I can recall, all the speakers all commented on the over-arching importance of finding ways to engage consumers with this whole idea of saving and investing.  And with the sole exception of the admirable Adrian Boulding, who had some good ideas and delivered them in an entertaining presentation, it was quite clear that none of them had the faintest idea how this engagement might be achieved.

Honestly, I don’t want to be too rude just in case I hurt the feelings of anyone involved (a million to one shot, obviously, but you never know) but even going to quite a few financial conferences, as I do, I don’t think I’ve ever seen or heard a drearier line-up of speakers.  If you asked me to imagine a group of people likely to be able to engage the general public on a subject which they know and care virtually nothing about, I simply could not imagine a group more different from this lot.

Among the 50 TSIP members, there’s no-one with any kind of creative background, no-one with any skills in communications, no-one whose job involves dealing with ordinary people – just a serried rank of white middle-class middle-aged men together with, to be fair, a couple of white middle-aged middle-class women, apparently only capable of delivering deadly dull content in deadly dull presentations.

I arrived feeling a) quite excited about the whole project, and b) vaguely hopeful that I might be able to find some sort of role in making it all come across a bit more engagingly.  I left four hours later just feeling c) that I wanted to stay as far away as I could from the whole dispiriting shambles.

As I’ve said a million times, it isn’t money that people find boring, inaccessible and unengaging, it’s us.  This thought never seemed truer than yesterday afternoon.

When work becomes too much fun, is it still work?

I’ve got to admit, I know absolutely nothing at all about experiential learning – well, except this one thing:  the way my brother-in-law Richard’s company does it, it’s a blast.

A little while ago, I spent a day at a West London hotel which frankly would otherwise have been pretty depressing, but wasn’t at all depressing because of what was going on – namely, the first day of an experiential learning programme (running three days in all, I think) for a bunch of quite senior executives from a Large Satellite Broadcasting Company based in that area.

The aim of this course was to give 30-or-so people in not-very-commercial roles a whole bunch of insights and understanding into how the commercial world works.  This involved organising people into groups of half a dozen or so, which then competed against each other, as usual.  But the really good bit was what each of these groups was actually doing, which was trying to manage a successful greetings card business.

This is a brilliant concept, if you think about it, because if you’re suitably armed with scissors, glue, card, supplies of scrap art and a photocopier, it’s something you can actually do, not just pretend to do or play at doing.  All the participants had a lovely time and soaked up ideas about business like sponges, as indeed did this exceptionally outsize fly on the wall trying and failing to look inconspicuous.

Richard’s firm, ProfitAbility, is doing an open day in the City on Wednesday 8th April – details at!prettyPhoto – where they’ll be introducing this and other equally jolly and equally well-designed and powerful scenarios.

I suppose that it’s only worth going if you have some kind of connection, no matter how peripheral, with training people.  Although having said that, I don’t, and I’m certainly intending to go along – just because it’s fun.

Headlines Rewritten By The Client, #33872

German Wings, Lufthansa’s low-cost brand, is advertising on the tube at the moment.  I can’t remember what the headlines say, but there are appropriate pictures of a couple of German destinations and sub-heads which simply say Fly to Hamburg or Berlin, or whatever the case may be.

Or at least that’s what I’m sure the subheads originally said.  But no doubt the campaign is part-funded by contributions from a tourism levy on Germany’s cities or regions, and no doubt there was concern in the meeting from the representatives of Westphalia or Schleswig-Holstein or wherever that an ad just featuring Hamburg and Berlin was doing nothing for them.

The future of the whole creative approach must’ve hung in the balance….until a thoughtful agency planner made the point that the ads in the campaign aren’t in fact intended single-mindedly (or rather double-mindedly) to promote Hamburg or Berlin, or wherever – these are just examples of the kinds of destinations served by German Wings.

Examples, thought the account director.  These are just examples.  If only that was a bit clearer…

Which is why the ads in the tube feature a sub-head which actually reads:  Fly to e.g. Hamburg and Berlin.  Which is nonsense.  But it saved the campaign.