Public trust with investment providers is on trial. This week the Treasury Select Committee has asked some tough questions of broker Hargreaves Lansdown as the most high profile group which carried the now suspended Woodford Equity Income fund on its top fund pick list about 6 months after most other groups had dropped it. Hargreaves will reply next week.
The concept of Best Buy lists for investment funds is under scrutiny. We’re pulling together some research to feed back to the industry as part of a bigger report on what advice and help people want and need. I’d love to hear what our 8,000+ readers have to say.
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A Corporate Nick O’Teen
There was a more positive story out this week. One of the UK’s biggest pension schemes has said it will no longer be investing in tobacco.
Yes fags are off the menu at NEST – the Baked Beans of workplace pensions – the cheap and cheerful option which currently looks after £6 billion for 8 million members. The remaining £40 million of tobacco-related holdings held will go up in smoke as the pension firm exits this sector.
I love this story for two reasons. First I don’t like to think of my money being used to make products which kill people. But second and more important, the decision has been presented as a financial one not a moral one. Regulation, legal actions and lower smoking rates are cited as making the sector a poor one to back when it comes to the bottom line.
This narrative makes sense. It’s not possible for fund managers to reposition themselves as bleeding heart Greenpeace activists or our moral barometers. But we have never lived in a time where public opinion has been, well, so public, and hence this opinion becomes the vanguard of how laws, regulation and money taken ‘at the tills’ changes. This correlates public opinion with profits.
Pension money talks. And when investment managers hear our voices and understand how that impacts future profits, we have a recipe for change. If we start to see the investment industry as big beasts wielding our financial clubs for us – well it is that which will rebuild a very modern sort of qualified trust in what they do.
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