If that’s what all agencies are like to work for, my apologies if you ever worked for mine

When I set up the mighty enterprise that is Lucian Camp, Consulting, I thought that I might work for agencies about as much as I worked for clients, or anyway not much less.  In reality, though, it’s been much, much less – about 95% less, in fact – and a big reason for that is that agencies have been, on the whole, so exceptionally tiresome and disorganised to work for.

Clients are fairly disorganised and tiresome, not replying to emails, never doing what they say they’ll do by when they said they’d do it, cancelling meetings at next to no notice and suchlike, but they’re not a patch on agencies.

At the moment, for example, there’s one which contacted me in a panic needing help on a big account about a month ago and told me when I called to check a couple of weeks later that my brief was imminent:  radio silence since.   There’s another which asked me to help get more exposure at conferences and other industry events:  I found an opportunity for them to make a case history presentation at a very suitable forum, but the organisers are now screaming for details to print in their programme and the agency has completely gone to ground.  There’s another which asked me to ghost some blogs every few weeks:  I put in a fee proposal of hijab-esque modesty on September 8th, but despite a couple of chases have heard nothing since.   And now there’s a fourth for which I’ve found an opportunity for them to meet a client in about ten days or so, but can I get them to confirm whether they can make the meeting?  You’ve guessed it, I can’t.

So, in short, of my four current agency relationships, all four have come to lengthy standstills while I wait for responses of one kind or another.

I worked in agencies for 33 years, and I have a nasty feeling that although I wasn’t aware of it at the time, I may well have been just as bad in my dealing with outside suppliers, especially those who I thought were further down the food chain than me.  If so, then seriously, everyone, if I pissed you about then like I’m getting pissed about now, honestly, I’m really sorry,

Reports of the death of MAS: not exaggerated by much?

The whole business of responding to George Osborne’s shock Budget pensions announcements has caused such an almighty kerfuffle that it’s easy to miss quite a lot of the excitement.

For example, Friday’s announcement that the Treasury’s chosen “delivery partners” for the famous free guidance that will be offered to everyone retiring with DC pensions will be TPAS (no surprise), Citizens Advice (biggish surprise) and not the Money Advice Service (very big surprise indeed).  MAS, instead, has been given some sort of vague and less-than-strategic behind-the-scenes role, not actually giving any guidance but doing a lot of photocopying, making the tea, popping out to buy stamps when needed and so forth.

What are we to make of this?  Of the several explanations available, there’s one that makes most sense to me. It’s no secret that there’s an independent review of MAS in hand, led by Christine Farnish:  the call for evidence closed a few weeks ago.  I don’t think anyone knows when the report is expected.  But say, just for the sake or argument, that it’ll be at some point before the launch of the new pensions guidance service, which will be on 6th April next year.  And say, just for the sake of argument, that Ms Farnish and her fellow-reviewers are going to announce at that time that in their considered opinion, MAS serves little or no useful purpose and should be wound up.  And say, just to conclude this argument, that even at this early stage Ms Farnish had indicated the direction of her thoughts to the Treasury,

Well, the Treasury would look pretty silly choosing MAS as a guidance delivery partner only to have to change its plans when its abolition was announced a short while later, wouldn’t it.

Just sayin, as we just say these days.

Political correctness gone nothing like mad enough

This is going to be one of those disguised blogs in which I conceal the identities of various clients and others to whom I don’t want to give unnecessary offence.  But there is something here that I feel strongly about, so apologies if the blurring is a bit of a hindrance.

Anyway, the thing is….

In areas like the voluntary and charity sectors, the amount of political correctness in the language that organisations use to describe their clients can seem a bit overdone to the rest of us. There was that thing a few years ago about not using impersonal generics like “the blind,” for example – it had to be the Royal National Institute for Blind People.  And then there was a thing – I’m not sure if it ever really stuck – about not using judgmental language like “disabled,” you had to talk about “differently abled.”

Well, perhaps some of it was overdone.  But better that than the under-done alternative that’s still all too widespread in financial services today.

I’m involved in a piece of work to do with the pensions market at the moment, with a particular emphasis on longevity.  Various people are involved, from within a life company and from various outside suppliers like me.  And I must say, discovering how I react – quite spontaneously – to some of the language that’s used to describe the old (sorry, old people) makes me realise how PC I’ve become.

This is a world full of talk about wrinklies, crumblies, zimmer frames, the gaga, people dribbling into their cardigans – and a world where someone saying these things seems to get a lot of smiles and laughs, and not a lot of frowns, from the people listening to them.

It’s also – perhaps more insidiously – a world where, when people imagine how older people might live, the picture that’s in their minds turns out to be basically ten years from 65-75 snowboarding and mountain biking, the next ten years staying at home watching telly and the next – and last – ten in poor health and in care.  Reducing what’s now nearly a quarter of our population to such narrow and unkind stereotypes seems almost worse than just insulting them.

OK, I’m over-reacting.  Much of it’s just supposed to be funny, and the rest is just convenient shorthand.  I’m taking it way too seriously.

But our industry has a terrible track record of treating people badly, of missing few opportunities to cheat them out of chunks of their money – and one of the steps along the road to thinking that’s OK is to start thinking it’s OK to treat them with this kind of derision.

Not my job to complain.  I’m just another supplier, and it’s a well-paid piece of work.  But I seriously don’t think a bit more political correctness would do any harm.

 

OK, so explain the workings of a semi-automatic gearbox to me without any jargon

The industry is going through one of its periodic bouts of jargon-bashing.  Paul Bradshaw was at it on Friday, speaking at an Investment Week conference.  Someone – probably Lucy Kellaway – wrote an agitated piece in the FT recently.  One of my clients says he’s determined to stamp it out.  But of course, the over-arching truth is that despite this latest in a frequent recurrence of paroxysms, jargon lives on.

How come?  How has jargon achieved this Japanese Knotweed-like indestructability?  If it has so many enemies, who are the friends fighting with such evident success for its survival?

Some are just fools who don’t know any better.  But to find jargon’s most powerful ally, you need look no further than the organisation tasked with ensuring that consumers understand what’s said to them – step forward jargon’s best friend, our regulator, the  FCA.

How so?  Simple.  The FCA insists that financial services providers must explain their products and services in microscopic detail to anyone who’s thinking about buying one.  (Actually, slightly lesser amounts of detail – say a magnifying glass’s worth – have to be explained to people who aren’t thinking of buying one, for example in awareness-building advertisements.)  These requirements are so onerous that in some cases – for example, complex packaged bank accounts – the terms and conditions run to the length of a shortish novel, up to about 60,000 words.

I know there’s room for debate about whether every single word is actually necessary, or indeed required by the regulator.  But such is the climate of fear that compliance departments will brook no argument.  If in doubt, leave it in.

But my key point is not contentious:  if you try to write something technical without jargon, it’ll come out much, much longer.  Jargon is basically a system of shorthand – a code, if you like, which allows the compression of communication.  Trouble is, it only works if both the writer and the reader can understand the code – and all too often, in financial services, the reader doesn’t.

That’s where my semi-automatic gearbox comes in.  Imagine that you have to explain this to someone who has no knowledge of the workings of any kind of gearbox and cannot drive a car.  Where do you have to start to make your explanation understandable to them?  I’d say that clearly explaining the concept of a gearbox at all would take the best part of a page of A4 – then probably another page to distinguish semi-automatic gearboxes from manual and fully automatic ones.

And of course even if you had the time, talent and energy to do this, you’d still face a terrible problem:  hardly anyone would have any interest in reading it.  5% already know, and the other 95% don’t care.  So, OK, maybe you can solve that problem by writing with great wit, style and reward, and get quite a lot of people through your two pages-worth.  And now you have another 199 systems in the vehicle that you have to explain.

So, of course, you don’t.  You use the jargon three-word phrase.  And at least arguably, that’s fine.  One of the words – “gearbox” – is understood by all drivers anyway, and another – “automatic” – by most.  The “semi” bit will baffle many, but a) it’s not going to kill them, and b) there’s no regulator hovering on the sidelines ready to pounce if they don’t like what you’re doing.

Compare this situation with a fund manager offering, say, an actively-managed UK equity fund.  The only bit of that which more than 10% of the population understands is “UK” (and even then they don’t really understand it – they’d be fairly stunned to find Khazakstani mining companies listed in London in the portfolio).  How long is it going to take to explain these five words?  Another page of A4?  Two pages?

A phrase I think I use quite often in this blog is “don’t get me wrong.”  Of course I’m not in favour of baffling poor old consumers with completely mystifying bullshit.  Nor am I in favour of over-complex an/or manipulative products with nasty surprises deliberately hidden away half-way through 60,000 words of small print.  And of course I believe that good writing can keep people’s attention even when your subject is of no interest to them.

But, all of that said, the sheer quantity of information required of us by the regulator is the root cause of the jargon mountain still present in our communications.  The choice that we financial writers face every day is a choice between incomprehensible jargon, and unmanageable length.  Not least because, sadly, we’re not paid by the word, we often choose the former.

Annuities: fairly bad value, or unfairly bad value?

I’m doing a roadshow thing with the legendary Ned Cazalet at the moment, and a good deal of the time in his ultra-high-speed, 50-odd minute rant is spent attacking annuities.

Ned really doesn’t like annuities, and he comes at them from all sorts of dazzlingly complex and sophisticated statistical angles all proving how rubbish they are.  Probably his simplest, and therefore most telling, chart on the subject compares what would happen if a 65-year-old man put £100,000 of retirement savings into an index-linked annuity, or into a vanilla equity income fund.  The equity income fund starts off paying him a higher income than the annuity, and the gap between the two gets wider and wider with each passing year:  then, when the man eventually dies, the money in the fund, which by now has grown significantly in value too, becomes part of the estate, while of course the money in the annuity now belongs to the life company.  The comparison leaves you pretty clear that choosing the annuity would simply be bonkers.

But the question is, why?  How come the fund investment does so incredibly much better?  On this subject, in different parts of his presentation, Ned has very different answers.

In answer No.1, he is sympathetic to the situation of annuity providers.  A coming-together of very low interest rates (affecting bond yields) and greatly-increased longevity has proved a toxic combination.  There’s not much that providers can do.

Answer No. 2, though, is very different.  He carries out some lightning-fast, blink-and-you’ll-miss-them, IRR calculations and demonstrates that the average 65-year-old annuitant never enjoys a rate of return of more than 5% p.a., no matter how long he or she lives (and of course in the worst case scenario, death at 66, the IRR is a truly disastrous  minus 100%).  But he falls ferociously on some rather misjudged copy from Friends Life’s annual report and accounts, in which they say their annuity business is going brilliantly and they’re making an IRR of 25% p.a.   He recycles the famous quote of the tourist shown the New York marina stuffed with vessels of all shapes and sizes owned by bankers and brokers, “Where are the customers’ yachts?”

So which is it?  Are annuity rates rubbish because of interest rates and longevity?  Or because of the ineradicably ruthless greed of the industry?  The question matters for various reasons – not least because if it’s the former then there’s not much to be done, but if it is just greed that’s responsible for that 5%-plays-25% equation then I guess that annuity providers might decide to tilt the balance in the customer’s favour, at least just a little, before they get wiped out when the new rules come in next April.

Probably a bit of both, I suspect.  I suppose I could always try asking Ned the same question – we still have a few more dates on our roadshow in front of us.  But I’m not at all sure I’d understand the answer.