As I get older, I find myself reflecting on how things used to be. Sometimes sentimentally, but more often cynically. This is why we become a bit grumpy, I suspect. It is experience.
As a father (of two children with very different personalities), I have marvelled at the ever-changing advice we have received over the years. As babies, we were told to put them to sleep on their backs. Not long before, they were to be put on their fronts. Then it was not to feed them nuts until they were at least two. Now it is dawning on people that this advice seems to be having a disastrous effect on allergies.
In other walks of life, especially with health and lifestyle issues, not a week goes by without some kind of updated advice from some government department or other.
Eat eggs, don’t eat eggs; drink a glass of wine a day, or don’t; fat is good for you, or is it? The fact is that no one really knows for sure.
And it is just the same in our troubled little advice universe. How can we have been so heavily regulated for all these years and still be subject to a steady stream of rule changes and laudable-sounding initiatives? Haven’t we got it right by now? And why don’t we learn from past mistakes?
I realise that things change all the time, especially with technology, and this means the rules we abide by need updating, as with automated advice, for example. But we seem to steam fully ahead into yet more industry scandals that we could do without, that many had predicted and, more importantly, that could have been prevented.
Anyone over 50 – and that, depressingly, is most of us – can see these things coming a mile off and yet we look on, powerless to prevent events unfolding in such a predictable way.
Take defined benefit transfers. British Steel workers are the equivalent of teachers and nurses in the 1990s, who were fleeced of their copper-bottomed pension benefits by marauding hordes of salesmen.
Hard-working steel employees are very different to millionaire business people in affluent Henley, yet we can almost guarantee they too will get sucked into some kind of retrospective review now pension freedoms have shown their nasty side (as many were predicting).
And Sipp business comes in for similar criticism, I am afraid. One “simple” rule change would have prevented the current malaise affecting this toxic brew.
So many of us wanted unregulated investments banned that it seems incredible it has not happened yet. I cannot think of a single reason why anyone would need unregulated holdings in a pension, although I understand it is a bit more nuanced than space permits here. If you want something as exotic as that, find it somewhere else perhaps.
Finally, and sorry for banging on about this, collective defined contribution schemes still make very little sense to me in the context of learning from past mistakes.
We spent years lobbying for pension simplification, so when it finally came we breathed a collective sigh of relief, only to be disappointed not long after with the first of many “complifications”.
CDCs are a throwback to COMPS and CIMPS, FSAVCs and Section 32s. As good as they might be, we just do not need them.
Tom Kean is director at Thameside Financial Planning