Wells Street Journal: Hypocrites Robertson?

With all the excitement of next week’s pension freedoms, it’s easy to forget the other reforms coming into force on 6 April. Of these, the charge cap on default auto-enrolment funds has been among the most disruptive to pension providers.

And many in the pensions and asset management industries put up an almighty battle over its introduction. The Government finally settled on a cap set at 0.75 per cent, yet some – notably Legal & General – wanted it lower.

Scrolling back through the archives WSJ notes Hymans Robertson partner Chris Noon also extolling the virtues of a cap set at a lower level in a Financial Times article from 2013: “We were pleased to see that the Department for Work and Pensions chose to ignore the OFT’s argument and propose a 0.75 per cent cap on charges. But we would have liked to see an even lower cap of more like 0.5 per cent.”

Fair enough you might think. Yet in Hymans’s official response to the DWP’s consultation on the cap, the actuarial consultancy argued against setting the cap below below 0.75 per cent.

It said: “We believe that setting the cap too low may lead to the adoption of sub-optimal investment strategies as well as stifling innovation amongst fund managers which could potentially benefit DC members over time. A 0.75 per cent cap as an average over the whole lifetime of a default strategy is likely to allow some active management to be used.

“Anything lower than this is likely to preclude any investment in active funds and hence will severely constrain the development of appropriate investment strategies.”

While the WSJ applauds individual employees holding different view to those of their firm, it is a slightly different issue when a partner makes a statement in a national newspaper while his employer takes an opposing stance in an arena less open to public scrutiny.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com