From auto-enrolment to pensions freedoms, the retirement industry has gone through enormous changes in the past decade.
As a former award-winning journalist and Money Marketing news editor, Tom Selby, now a senior analyst at DIY investment platform AJ Bell, has been at the frontline to witness many of these changes.
So, recently we decided to invite Tom to MRM’s offices to hear his views on the future of the pensions industry and how he would change it for the better.
The popularity of DIY investment and pensions platforms has exploded in the past decade. Why do you think this is and can it continue?
There have been a number of drivers but to my mind technology has undoubtedly been the most significant. Even in the past 10 years the speed and sophistication of computers has improved beyond recognition. This has coincided with something of a retirement revolution, with auto-enrolment and pension freedoms giving saving a broader appeal to the mass market.
In particular, as mobile technology continues to evolve it makes sense that those companies willing to invest in and embrace that technology will reap the longer-term benefits.
Ministers are forever tweaking with personal and the state pension. What one thing could they do right away that would benefit people?
Establish an independent, cross-party review of the pension tax regime with the aim of simplifying and encouraging more people to save for the long-term. This could form the basis of a proper settlement on pension tax policy and put an end to constant damaging speculation about future changes.
What worries you most about the pensions industry at the moment?
I genuinely think the pensions industry, for the most part, is a force for good. Generally, my biggest worry is scams, both in terms of the impact on those directly affected and the wider perception of retirement saving.
If you had to construct the perfect pension, how would it look?
Probably a public sector DB scheme. We have all the tools for a perfect pension right now – anyone can buy a guaranteed income from an insurer or keep their money invested in drawdown at a low cost (provided they shop around). For many, a mix of the two will be appropriate. I sometimes get frustrated at the demands for ‘innovation’ because, at a fundamental level, what new products are you asking for?
If you could give one piece of financial advice to a teenage version of yourself, what would it be?
Learn about compounding.
What three things would you do if you were head of the FCA?
- Expand the pension scams team
- Provide more detailed feedback to whistleblowers
- Work more closely with the industry – especially advisers – to understand problems before they blow up. There is a huge amount of intelligence and insight in the market which often gets entirely ignored
What is your biggest pet peeve, or makes you angry?
Intransigence. The pensions industry (and it isn’t alone in this) has a habit of being intellectually tethered to certain ways of thinking.
Now, tell us a little about your life outside of work, do you have any hobbies?
Yes! I play football to an ever decreasing standard and watch as much live sport as I can. Love a good stand-up comedy night at a dirty pub, too. And I brew beer with six mates from home (Kendal) – you can read more about it here: https://www.ganyambrew.co.uk/ and here: https://www.facebook.com/ganyambrew/ We’re also on the twitter @ganyambrew
What is the one column or website that you read every day?
The day job requires me to read the money sections of all the main titles, and I generally use this opportunity to have a scan of the other main stories across the nationals, too. Trade journalism remains where some of the best stories originate and so I always read across the likes of Money Marketing, New Model Adviser, Professional Adviser and FT Adviser, too. Podcasts are my favourite way to switch off from work stuff nowadays. Staples at the moment are the Guardian Football Weekly and James O’Brien.
What would you do if you received a windfall of £10,000? I’d probably be extravagant with half of it (a big trip to the far east if I could get the time off) and save the other half.