Last month’ s flawed research from Consumer Focus into pension switching has, quite rightly, been widely ridiculed for the lack of evidence on which it based its sensationalist conclusions. It is the first time I can remember every Money Marketing columnist actually agreeing on something.
The Government-backed body suggested IFAs were responsible for an unacceptable level of pension churning into high charging funds, a problem it says will continue after the RDR. It based its grand conclusions on just 31 pieces of business emanating from two networks over a ten year period.
Inexplicably, the report’s finding were widely picked up by the national media, leading to the inevitable scaremongering headlines about advisers and more generally about pensions.
However, before congratulating themselves too much on managing to convince so many journalists to swallow a report so lacking in credible evidence, Consumer Focus might want to ponder some other research featured in Money Marketing this week.
A British Population Survey into the reasons why people are not contributing into a pension, conducted in December, makes for interesting reading. Just over 50 per cent of those without a pension say it is because they cannot afford one. However, nearly 7 per cent put their failure to save in a pension down to bad publicity, higher than the 4 per cent put off by high charges.
Consumer Focus needs to realise that the publicity generated by reports such as the one it published last month have consequences, the most concerning being that people are turned off the idea of saving altogether.
If the research uncovers unscrupulous behaviour or shines a light on an area of the market where standards need to be improved then it is, of course, to be welcomed.
However, if the research encourages sensationalist headlines which cannot be backed up by the evidence produced, then it has the potential to do a huge amount of damage.
Government agencies, regulators, private companies and PR agencies are all well trained in packaging up that killer statistic or message they believe will sell their “story”, and therefore their brand, to the journalist and on it their readers.
The easiest way to do this is through research. Unfortunately the fact that the research may be based on a tiny sample, conducted by asking biased questions or flawed in its calculations, as is sometimes the case, is often ignored in the quest for that easy headline.
The Consumer Focus report is by no means an isolated incident. For instance take FSA chief executive Hector Sants’ back-of-a-fag-packet calculations to work out that £600m of consumer detriment is taking place each year or FSA head of investment policy Peter Smith’s gross manipulation of FOS statistics to try and underplay gulf in standards between IFAs and bank advisers.
This research from the British Population Survey should serve as a timely reminder to organisations who wield considerable influence in the public sphere that this influence comes with responsibility. And that in striving to achieve the headlines you crave at all costs, you risk hurting the people you claim to be looking to serve.
Paul McMillan is the editor of Money Marketing- follow him on twitter here