The chairman defends his company’s pension plan, which hoovers up 100% of contributions in charges, by pointing out that it is following the letter of the law with ’transparent’ literature.

”Are you sure you should be out in public?” I asked the chairman of the implausibly-sized investment company Second Coming Asset Management as we met for a pint or two of Panoramic Hatchet Job at The Star(r) Fund Manager Ate My Pension. “Not now you’ve asked me that,” he replied nervously. “What am I supposed to have done this time?”

“It’s not just you but the whole fund management industry,” I conceded. “Did you not see the documentary on how the City is running the pensions industry not so much with a view to helping people provide for their retirement but more as a way of generating fees, making profits and presumably, if one were hunting for irony, further gilding its own so-called golden years?”

’When will the wider media get it through their skulls that Her Majesty’s financial services industry is not a charity?’

“Not that old chestnut again,” the chairman sighed. “When will the wider media get it through their skulls that Her Majesty’s financial services industry is not a charity? Every other business in the country is apparently allowed to make a profit so why not us? Honestly, what have we ever done to deserve this sort of treatme … no, forget I said that.”

“I think I’d better,” I said. “Still, to be fair to the programme, I don’t believe it was suggesting the City shouldn’t make any profit at all. Its problem was really with pension schemes that eat up most of their savers’ contributions. I still can’t see how the maths worked but the programme managed to find three household names offering pensions that somehow snaffle two-thirds or more of what people put in.”

“Good grief,” the chairman exclaimed. “Those numbers are genuinely shocking. Are you sure it was only three? And only two-thirds?” “I think you may be missing my point,” I said. “But are you saying the programme managed to overlook a Scam pension that eats up – what? – 75%, 80% or maybe 90% of contributions in charges?” (Scam continues below)

“You do me a disservice,” said the chairman, looking hurt. “I believe you will find our Scam Perspex Poorhouse Pension Plan hoovers the whole lot.” “What?” I said. “To quote the programme, how can that be legal?” “Because – as the name suggests – we are completely transparent in our literature as to what will happen to a saver’s money,” the chairman replied.

“You know the FSA has never worried over-much about value for money, only about transparency and simplicity – and what could be more transparent than us admitting that, yes, we take all your cash? I’m not saying the product is a bestseller – which is probably why it was overlooked in this programme you’re on about – but, from a regulatory point of view, it’s completely kosher.”

“Then it would appear the programme’s conclusion – “Start taking a lot less on trust and read the smallprint” – which I thought was stunningly banal and beyond stating the obvious, may actually have some worth to it after all,” I said. “Anyway, on the subject of quotes from the programme, what do you make of the line from Thomas McPension that ’on average, fund managers are not very good’?”

“Ouch,” said the chairman. “More for him than us. Well, obviously we should not give him the slightest benefit of the doubt and even entertain the notion he was stitched up in the editing suite. Instead, let us assume that is simply what he believes – in which case he may find himself omitted from a few Christmas card lists this year. Semantically, however, I can’t help feeling McPension is mistaken – if only because, if you compare fund managers with other fund managers, then it seems clear to me that, on average, fund managers are not not very good, on average fund managers are average. Indeed, surely it is the mediocre to downright appalling fund managers who, on average, are not very good?”

“I won’t argue with you there,” I said. “After all, you will have employed many of them over the years.” “Guilty as charged,” the chairman nodded. “Speaking of which, we should also consider the possibility McPension was not talking about how good fund managers are in terms of ability but in terms of morality, which is of course an entirely different kettle of fish – and indeed can of worms.”

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