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December 2018

This month’s contributors are: Andy Agathangelou

David Butcher

Transparency Task Force

Alistair Russell-Smith

Communications and Content

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Hymans Robertson

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Henry Leveson-Gower

Larry Bates

Economic Pluralism

The Wealth Game

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Pat Sharman

KAS Bank

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Get in touch if you wish to place an article! Edition #32 December 2018

The official publication of The Transparency Task Force. FREE to members of the Transparency Task Force, membership of which is also FREE

3 The Asset Owners Guide to Cost Disclosure Services 5 Upcoming Events 6 If Only you’d talk to me... 10 DB Consolidation - Newly Emerging End-Game Solutions 14 10 Years after the Crash, time to stop expecting reform from mainstream economists? 18 Beat the Bank: The Canadian Guide to Simply Successful Investing 20 Past, present and future of cost transparency 24 The TTF Ambassadors 26 The TTF Teams 27 The TTF Advisory Board 28 The Directory of Pro-Transparency Organisations 32 Get Involved


The Transparency Times | | December 2018 | Edition #32


The Asset Owners Guide to Cost Disclosure Services

I believe the imminent supply of costs data made possible by the success of the FCA’s Institutional Disclosure Working Group means we are at an inflection point in our trek towards transparency. For trustees of pension schemes the challenge will move from not having sufficient cost data to having too much to cope with.

ments from interested parties:

Ajeet Manjrekar FIA, Co-Head, River and Mercantile Solutions –

John Simmonds, Principal, CEM Benchmarking -

For many schemes, the best way forward is for trustees to make good use of the specialist costs disclosure, reporting and benchmarking utilities and services available. With that in mind, the Transparency Task Force is initiating a project to produce a user-friendly guide for trustees about the capabilities of each utility and service available; with every utility/ service provider being invited to participate, along with any consultancies that would like to help.

“This is a great new initiative by the TTF and we, at River and Mercantile Solutions, are very supportive. Whilst transparency is essential, it is important that this is conveyed in an accessible manner to ensure effective use by trustees.”

“There is so much discussion on costs and charges out there right now, and so many new organisations providing services in the market that it’s very difficult for any pension fund to know where to start and who can help them. It would be great for pension funds to have a ‘go to’ guide on who does what.”

The project is progressing positively and I’m pleased to report that it is being dealt with as a collaborative, collegiate and cooperative exercise with all participants working together to help pension scheme trustees transition from operating in a disclosure data desert to operating in a disclosure data deluge. The guide will be updated monthly as this is a fast-moving area with a healthy amount of innovation pouring into it. Here are some supportive com-

James Knowles, Managing partner, Novarca UK “We applaud TTF’s initiative to create an overview of solutions to help pension plans assess and achieve value for money.”

Nicholas Clapp, Head of Business Development at Kempen “Greater transparency and more information puts more power in asset owners hands. We’ve taken a leading role in the UK on achieving cost transparency and we understand that more data does not necessarily mean better outcomes, unless it is with the right guidance. We welcome this initiative from the TTF and to go further, in our opinion, an assessment tool to determine value for money, relative to services and performance, would help asset owners make choices between services and providers to deliver the best outcomes for their members.”

If your organisation provides any kind of cost disclosure service or utility please get in touch so we can be sure to include you in the Guide.

Edition #32 | December 2018 | | The Transparency Times

3 the collaborative, campaigning community dedicated to driving up the levels of transparency in financial services, right around the world. the official publication of the Transparency Task Force. It is a great opportunity for our community to share news and views, insights and ideas, right around the world. how we bring people togethor to discuss and debate the key issues and to listen to thought leaders on the vital topic of transparency in financial services. awarded to one individual/organisation at each of our Transparency Symposia, in recognition of the contribution they are making to encourage greater transparency. 4

The Transparency Times | | December 2018 | Edition #32

UPCOMING E VENTS Time for Transparency “CMA’s Final Report into the investment consulting and fiduciary management market.” Wednesday 16th January The CMA will be the headline speakers - they will be talking about their conclusions, the reasoning behind them and they will also be responding to questions and comments from the floor.

Burges Salmon 6 New Street Square, London, EC4A 3BF

For any enquiries about the above event please make contact through

Edition #32 | December 2018 | | The Transparency Times




by David Butcher | Founder and Director | Com

The fund management industry is at a crossroads. An fund management. The industry basked in the sunlig crisis. Banks might have gone under but fund manag economy that insulated them from the worst of the c Many firms took the opportunities this afforded. Lots of people did very well, and many of them were clients. But the industry’s unwillingness to evolve, and make itself more meaningful to clients and society, now places it at a junction. Fund management companies can carry on delivering patchy investment performance for a fixed and hard-to-understand fee. Or they can change, and become more relevant to people and to society. If they want to change they could do three things. First of all, they could address the lost connection with end users: hard working people who believe in the importance of

saving for the future. The system has become so intermediated few money managers have any clear view of their underlying customers. You couldn’t imagine this disconnect happening in other vital economic sectors, such as pharmaceuticals or even banking. I’m not suggesting that this intermediated system needs unpicking. Many of those middle points add huge value: independent advisers offer expertise and objectivity, platforms offer cost-effectiveness and aggregation. But fund management groups can invest in imaginative story telling, to make themselves

more relevant, and more transparency, to make themselves more understandable and relevant to people. Insurance groups, some of the more complex financial organisations, have managed to achieve this since the crisis. Fund managers could use them as a template. Secondly, the case for fund management has never really been made properly. There have been mumblings. But no one has stood up, planted a flag in the ground and said, “this is why we matter.” Again, that is a question for communication and transparency. Fund management is not a complex business model: you manufacture investment performance and then you match it to people who need that performance. The rocket science, and some of the fascinating points of differentiation between different companies, all comes deep within the manufacturing process. What would that look like? There are already plenty of

mmunications and content

nd I’m not just talking about active ght during and after the financial gers had a structure and role in the crisis. stories of retirement dreams realised, of new companies financed and of much-needed new affordable housing built. It’s not hard to aggregate all that together and come up with some hard numbers, supported by meaningful narratives.Most of the existing aggregated data currently offered by the industry, such as fund flows and index performance, looks remarkably like all other financial information: meaningless outside the financial echo chamber. People need meaning. And fund management groups should give it to them. Thirdly, the investment industry badly needs public advocates. Who is talking up this small but vital economic sector other than the trade body? The industry has plenty of friends, from chief executives of companies and housing associations to entrepreneurs

and finance ministers around the world. These are the people fund managers have helped make successful. Can they be encouraged to offer a word of support? Has anyone actually tried? And all this should apply to passive investment houses too. They are the ones that have benefitted from benign markets over the last few decades. But when markets consistently fall (for months, years, a generation) how many of their clients will hold on? How many will continue to buy? It’s hard to imagine such astonishing inflows in a malign environment. Change is possible. And if both active and passive managers invest the time and resource in explaining themselves more effectively, and in demonstrating they play a valuable role in economy and

David Butcher is director and founder of Communications and Content, the consultancy that helps its financial clients explain what they do more effectively. He is particularly passionate about helping investment brands reach their potential, and be different from the pack. He has a long and successful track record in creating and telling stories that unlock enterprise growth, protect reputation and engage content consumers He has over 20 years’ experience at leading investment brands, including M&G Investments, Insight Investments and Fidelity International, and communications consultancies, such as Lansons Communications and Edelman. @DavidButcher_42

society, then they can take the more prosperous path at the junction. In that scenario, everyone does very well, especially clients.



by Alistair Russell - Smith | Partner and Actua

DB consolidation encompasses a wide range of p mastertrusts, mergers, buy-ins/outs, aligning serv platforms. However, one area that has caught the eye recently is the emergence of new commercial consolidators like Clara Pensions and The Pension SuperFund. The first transactions into these vehicles are expected this year. So what are these vehicles, and when do they work? What are commercial consolidators and how do they work? Transferring a DB scheme to

a consolidator gives a clean break for employers at a lower cost than insurance buy-out. The consolidators run a DB scheme under the existing occupational pension scheme framework, so the management of the scheme runs just like your own DB scheme. However, the crucial difference is that the covenant of the employer is replaced by covenant support from a risk

capital buffer, expected to be around 15% of the DB liabilities. The capital in the buffer is provided by external investors and a contribution from the employer. What is the difference between Clara Pensions and The Pension SuperFund? Both of these consolidators work as described above at a high level. However, at a more


ary | Hymans Robertson

potential solutions, including DB vice providers, and investment detailed level there are two fundamental differences in approach: 1) Sectionalisation – each scheme transferring into Clara Pensions has its own section backed by its own capital buffers, whereas schemes transferring into the Pension SuperFund go into one large scheme backed by one large capital buffer. 2) Long Term Objective – Clara transfers each section to the insurance market as the liabilities mature, meaning the Long Term Objective is unchanged from the existing target for many schemes. The Pension SuperFund runs off the assets and liabilities within the fund. Clara Pensions can therefore be thought of as a packaging of an existing strategy to reach insurance buy-out. However, The Pension SuperFund is a self-sufficiency end game backed by a capital buffer. What are the benefits of transferring to a consolidator? Consolidator pricing is expected to be around 10% cheaper

than insurance buy-out, so the key benefit for an employer is a clean break from their DB scheme at a lower cost than buy-out. This translates into a far more significant reduction in the required corporate cash injection to achieve this clean break. For example if 70% funded on buy-out, the value of the required cash top-up falls by 33%. One clear benefit for scheme trustees is that a transfer to one of these consolidators is typically dependent on a significant cash injection from the sponsor. It therefore leads to a significant improvement in the scheme’s funding level, enabling a lower risk investment strategy and more certainty that the assets will be sufficient to meet the liabilities once in these consolidators. The key concern for the Trustees will be the loss of covenant support from the employer. The improved funding and additional capital buffer means that member security should not be adversely affected in many circumstances. However, it would likely be difficult for

Alistair is a Partner and Fellow of the Institute and Faculty of Actuaries. He has 18 years’ experience and heads up Hymans Robertson’s DB corporate consulting business. He advises clients on DB funding strategies, member options, risk transfer, pensions accounting and benefit change. Interesting projects over the last year have included a bulk transfer to give a corporate more control of their DB liabilities, negotiating exits from multi-employer schemes, and implementing contingent funding plans in triennial valuations. Alistair joined Hymans Robertson as a graduate trainee in 2000, qualified as an actuary in 2004, and became a Scheme Actuary in 2006. Alistair produces three of our flagship publications: our annual charity benchmarking publication, which looks at the ability of the largest 40 charities in England and Wales by income to support their DB pension schemes; our annual FTSE 350 Pensions Analysis; and our annual FTSE 350 IAS19 Assumptions Survey. Fellow of the Institute and Faculty of Actuaries

trustees that have very strong covenant support to agree to a transfer to a consolidator, perhaps unless a legal obligation back to the employer is retained. When will consolidators be used? We expect that early transactions will be driven by corporate activity, where there is a driver for paying cash in return for a clean break from DB liabilities, for example M&A transactions. As the process becomes more established and regulatory guidance is published, transactions could become more widespread. There are some more nuanced areas which could drive some activity. Two examples include: 1) PPF+ transactions – in corporate distress situations where a scheme is better funded than PPF funded but not fully buy-out funded, consolidation could be a way to secure a higher level of PPF+ member benefits than would be possible to provide with insurance.

2) Exiting non-sectionalised multi-employer schemes – employers participating in non-sectionalised schemes with ‘last man standing risk’ may see the value in transferring their share of assets and liabilities to a consolidator, as this secures full member benefits at a lower cost than the Section 75 debt otherwise needed to achieve a clean break from these schemes. How are insurers responding? Insurers are innovating in a range of ways. As has already been widely reported, insurer pricing in itself is now far more competitive than it was a year ago. However, another solution coming to market is ‘insured self-sufficiency.’ Conceptually this is very similar to the Clara Pensions solution, but without the clean break for the employer. Scheme assets, with any employer contribution required to reach the initial funding requirement, are passed to the insurer and invested to reach buy-out over time. An insurance wrapper is then also included, whereby the insurer

covers a fall in funding level in all but the worst 1-in-200 year event. This insurance is funded from a basis points charge on the asset out-performance, triggered when the assets out-perform the liabilities. What’s next? My view is that there will be an initial trickle of transactions driven by a particular corporate need in the first instance. However, as the market builds, as regulatory guidance is issued, and as scheme funding improves, it is likely to become increasingly common to adopt these solutions. Our analysis shows that 17% of the FTSE350 could already transfer at least one of their schemes into a consolidator with less than 1 month’s earnings, so a significant minority of corporates could already use these solutions at an affordable cost.



by Henry leveson-gower | founder & ceo | Econ

The humiliation of mainstream economics following expectation of a revolution in economics. Yet ten yea the Institute for New Economic Thinking (INET) repo economics profession. We think the answer is to legitimise the innovators outside the mainstream rather than expect change to come from within. Following revelations of the extraordinary inadequacy of economic models and the students’ revolt against their economic teaching, many expected a revolution similar to those in the 1930s and 70s with new ideas flowing in. A team of economists1 recently undertook a systematic analysis of citations pre and post crisis in economic journals. This looked to see if economists were referencing new or different ideas to any greater extent since the Crash. It concluded they weren’t. INET put this down to the iron grip of top journals who enforce a mono-culture. These journals determine career prospects and academics have to stick to mainstream dogma to publish in them. This they have dubbed a ‘crisis of conformity’. Unsurprisingly the same is true of most economics teaching. After all, broadly the same people are doing the teaching

as do the research. With the pervasive use of standard text books, there is even less space for diversity and innovation. This is in spite of the growing campaign of the student movement lead by Rethinking Economics, which was born out student disillusion with economic teaching post the Crash. So more than ten years after the Crash we have the same intellectual system that underpinned the group think that meant the mainstream establishment did not “see it coming”. Hence they are unlikely to see the next crisis coming either. Meanwhile the finance sector are sitting even more pretty knowing for sure now that Governments will bail them out and others will pay the bill - again. Is this resistance to change surprising though? Standard economics itself suggests that monopolists will resist competition. Mainstream economists are trained in only one form of economics, and control access to, research and teaching in

top university departments. For them the status quo is comfortable and change only has downsides. Maybe it will all go away!

Of course there were many outside the mainstream that did ‘see it coming’ such as Steve Keen and Ann Pettifor. In spite of that, they remain sidelined as do many others who do not conform. And this we see as the opportunity. This group is growing, experimenting and innovating as it


nomic Pluralism

g the Crash in 2007/8 created the ars later rather than revolution, orts a ‘crisis of conformity’ in the draws in new young researchers, many inspired by the students’ movement for curriculum reform and high-profile non-mainstream economists.

nomics. Furthermore, academics in other disciplines have turned their attention increasingly to socio-economic issues and bringing new insights. However these academics are fragmented across disciplines and departments without a common identity or much traction with policy makers. They sit in international political economy, geography, psychology, sociology and anthropology departments as well interdisciplinary centres. The mainstream economics departments don’t even recognise them as ‘real’ economists and police the use of the ‘economics’ term.

No crisis of conformity here. There is also a rich and varied set of economic schools to draw on dating back to the 1930s and beyond, when there was more space for innovation. This includes thinking on institutions, complexity and uncertainty that was subsequently discarded by mainstream eco-

We intend to work with these innovators and other stakeholders to build a common identity and most importantly an increased profile outside academia to be able to influence policy and practice. As a first step, we are doing this by creating an accreditation system for masters courses that take a pluralist approach to economic teaching ie rec-

Henry Leveson-Gower is a practising economist who has been working to inform environmental policy for the last 25 years. He is founder and CEO of Promoting Economic Pluralism and editor of The Mint Magazine, home of fresh economic thinking. Henry is a fellow of the RSA.

ognise more than one way of thinking about the economy and encourage critical reflection. The point of this is not to determine what economics is ‘right’ or which courses are ‘best’. It is to build a shared sense between those inside and outside of academia of what economic teaching looks like that fosters creativity and critical thinking to address real world issues. This type of teaching is already happening in many of the departments and centres where these innovators are as can be seen in the list of courses here. It is happening in the same high ranking universities where the economic departments themselves defend the status quo. So what can you do to support change in these urgent times?

For a start, you could register your public support for this initiative here. It is crucial that we demonstrate a diverse and wide-ranging support for this initiative particularly outside academia. We already have some great supporters including finance activists such as Anna Laycock and Fran Boat and CEOs and chairman such as Saker Nusseibeh and Sir John Kingman, so you will be in good company. Beyond that you can get involved in actually co-creating this scheme. This doesn’t mean that you necessarily have to get involved in the detail or devote huge amounts of time to it. We will ensure people can give

their views on the principles and broad approach as easily as possible. Please sign-up here to be involved and if you first want to find out more, sign up for a webinar here. We look forward to building this new institution together to support the essential task of organising economies fit for the 21st century. E Aigner, M Aistleitner, F GlĂśtzl and Jakob Kapeller, 2018, The focus of academic economics: before and after the crisis, ICAE Working Paper Series No. 75 1

Venues wanted for transparency symposia in all of these locations: Amsterdam,Auckland,Beijing, Berlin,Boston,Brussels,CapeTown, Chicago,Dubai,Dublin,Frankfurt, Geneva,HongKong,Johannesburg, London,LosAngeles,Melbourne, Montreal,NewYork,Ontario,Paris, SanFrancisco,SantaMonica, Shanghai,Singapore,Sydney,The Hague,Tokyo,Toronto,Vancouver, WashingtonD.C.andZurich. For further information please get in touch through


BEAT THE BANK: THE CANADIAN GUIDE TO SIMPLY by Larry Bates | founder | The Wealth Game

Canadian financial institutions have a well-deserved glob ty. But some of their customers are not well served. Millio to half of their retirement savings to decades of paying h have no sense of the scale of this loss or its impact on the Banks, brokers, insurers, and financial advisors provide individual Canadians with access to stock and bond investments largely through mutual funds and other investment products that indirectly charge fat fees. The industry has done everything in its power to keep both the amount, and the impact, of those investment fees secret. As a result, very few Canadians understand how much they are paying for investment products and services, or how much value they are getting in return. And very few Canadians take the time to find out.

es on the combination of poor understanding of fees, deep loyalty, and misplaced trust by charging Canadians the highest mutual fund fees in the world.

In a financial system traditionally dominated by the six big Canadian banks, these institutions—and by extension the entire Canadian financial industry—occupy a position of paternalistic authority that too many individual investors respect unquestioningly, and even appreciate to some extent. The industry brilliantly capitaliz-

Who would sign up for this kind of treatment? Millions of unsuspecting Canadians are doing just that. And I am not just talking about inexperienced, less educated investors. Countless doctors, lawyers, accountants, teachers, successful business owners, and bankers—yes, even bankers—are in precisely this position.

The impact of investment fees on Canadian retirement accounts is more than a consumer issue, it is a major social issue of our time. Government pensions will not be nearly enough to provide a satisfactory retirement lifestyle for most Canadians, and guaranteed employer pensions are rapidly becoming a thing of the past. So, while previous generations of Canadians with guaranteed pensions could casually observe the markets from the sidelines, most of us today must participate directly in the markets to secure a comfortable retirement. But the structure and practices of the Canadian investment industry continue to conspire against the ability of the average investor to succeed, to maximize that retirement nest egg. This compromises not only the financial well-being of individual Canadians, but also the health of our retirement system and of our society as a whole. The good news is that


bal reputation for strength and stabilions of Canadian investors are losing up high mutual fund fees. Most investors eir future well-being. the path to a more rewarding investment experience and a more prosperous retirement can be incredibly simple and easily accessible.

it is absolutely essential to your ultimate success. Achieving an attractive long-term rate of return on investments requires a long-term mindset.

My newly published book, “Beat the Bank” is helping average Canadian investors understand the severe underperformance caused by high fees as well as the potential for to significantly boost investment returns through an approach I call ‘Simply Successful Investing.’

3. Minimize costs: Investment returns can be dramatically improved, not by attempting to beat the market but by minimizing costs and keeping more of your market gains, even if they are just average gains. This step alone has the potential to double the longterm investment returns of millions of Canadian mutual fund investors.

There are three key elements to Simply Successful Investing: 1. Learn investment basics: Taking the time to acquire a solid understanding of the fundamentals of investing will empower investors to make better choices and achieve significantly better investment results. 2. Think long-term: Investments offering the potential for attractive long-term rates of return do not produce steady returns. All but the lowest-risk, lowest-return investments produce volatile rates of return in the short to medium term. Riding out the short-term highs and lows of the market can be stressful, but

Beat the Bank is helping average Canadian retirement investors learn investment basics and giving them the confidence needed to take advantage of much lower cost, more efficient investment products and services to build larger retirement nest eggs, retire better and, if desired, retire sooner.

Larry Bates is a former banker turned investor advocate, author, and speaker. Larry spent over thirty years in the investment business with prominent institutions in Toronto, Canada and London, England including as Global Head of Debt Capital Markets for RBC Capital Markets. Over the course of his career, Larry both collaborated with and advised many of the world’s most sophisticated investors and financial institutions. Larry founded the website in 2017 and has written a book, to be published in late 2018, aimed at helping average investors understand how to achieve better outcomes. Larry is currently a member of the Investor Advisory Panel of the Ontario Securities Commission. He is also an active member of TTF’s Team Americas and an Ambassador.



by Pat Sharman | Managing Director | KAS Ban

In 2017 KAS Bank launched the UK’s first cost transparenc schemes. For the first time ever, the dashboard gave pen governance representatives a comprehensive overview o investment costs. This was a bold step towards establishing a true value for money assessment for the UK DB industry. In this article, Pat Sharman, explains industry drivers for developing the KAS BANK dashboard, how cost transparency went mainstream and how it’s likely to shape the future of the pension industry. Across the pensions and investment universe, we have recently seen an exponential drive for greater clarity on costs and charges. Asset owners seek greater insights into the cost they are incurring, in order to make more informed decisions and at the same time, industry bodies and regulators are dedicating their efforts to establishing a framework which will effectively capture and disclose these costs. Since 2015, DC pension trustees have been required to report on the level of transaction costs borne by members. Despite

this, most trustees were unable to do so because they couldn’t reliably report what those costs were in a detailed and consistent manner. From a starting point of traditionally low transparency and

reporting standards, 2017/18 has been a turning point for the industry: in June 2017, the FCA published a study that highlighted that investor awareness of cost reporting and charges where extremely poor and there existed weak price competition in several areas of the asset management industry. The survey proved that transparency was now

not only something positive to have but required and needed by the industry, especially on topics of costs and pensions. Only by better understanding costs, will trustees be confident that they are making optimal decisions. Aligned to these findings, in January 2018 the FCA finally provided asset managers with a guide on how to report on costs and charges, with, more in depth information on transaction costs in response to mounting challenges faced by pension scheme trustees to report on costs. The announcement was also backed by the LGPS. When considering matters of good governance and transparency in pensions, many looks to the Netherlands, which is widely considered to be a frontrunner. As such, there are several lessons we can learn from the Dutch experience. Crucially, that change did not happen overnight.



cy dashboard for DB pensions nsion scheme trustees and their of their scheme’s administration and As a custodian with Dutch heritage, we’ve seen the positive effects that a framework on cost transparency can bring to the industry, including greater confidence in long-term decision making and better accountability as well as improved operational efficiency of financial markets. . While it’s important to note that costs are not inherently bad, and the focus should be on achieving the optimal situation for your scheme, the Dutch saw the proportion of members paying over 1.5% in total costs reduce by 92%. The Dutch example serves as a proof point of the benefits of cost transparency, while setting the goalposts for the UK to aim towards. The industry lead framework in the Netherlands has helped shape the work done on cost transparency in the UK, providing a reference template to the work commissioned by

the LGPS SAB and their code of transparency. This code has had an immediate effect on how investment managers begin to disclose costs, having already seen up to 80 of those managers sign up and take that code on board. However, although this code is clearly a step forward towards standardized transparency, more work is needed to create, an all-inclusive template that includes alternative investments, namely Private Equity. The expansion of the UK standard template for cost transparency is being further explored by the FCA institutional disclosure working group (IDWG). The group was formed following the FCA AM study, and brought together various expert stakeholders across the industry, with the intention of researching a complete consensus on cost disclosure

Pat Sharman leads the UK team at KAS BANK, delivering governance tools and services to the UK pension fund industry whilst ensuring we keep client service at the heart of our work. Pat joined KAS BANK in 2015, initially as Director of Pensions UK, where she was responsible for the relationship management and business development teams, as well as the growth of our UK Pensions Business. In January 2016, Pat was made responsible for all activities for KAS BANK in the UK and was appointed Managing Director of the UK Branch. Pat has extensive experience in both the Securities Services and Pensions industries in the UK. Prior to joining KAS BANK, Pat built up 30 years’ experience at HSBC Securities Services where she was Head of Relationship Management & Sales, Pensions, Europe. Whilst at HSBC, Pat was a Member Nominated Director of the HSBC UK Pension Trust working across both DB and DC schemes. Whilst on the trustee board she built up a reputation for working hard on the members’ behalf and asking the tough questions, something she takes great pride in.

template for asset management service providers to institutional investors. Following months of work, the group reached consensus on the final template and made the recommendation of a more comprehensive template, that does a deeper dive into alternatives and has higher levels of scrutiny and administration fees. As positive as this sounds, still, the industry needs to rally around a single standardised framework, to enable the widespread adoption of cost trans-

parency. With different and opposing templates from the FCA, LGPS, and Investment Association, there can be confusion on how costs must be reported, and from the perspective of the pension trustees, how those costs should be received. As exemplified by the Netherlands, a clear, digestible and standardized framework and guidelines needs to be put in place in order to for cost disclosure to be fully adopted in effectively.

KAS BANK has seen a growing demand for cost reporting, to help trustees make better and more informed decisions. A clear success story is SAUL Trustee Company, who has been working with KAS BANK for the past three years and by using their cutting-edge technology, SAUL’s senior team have been able to fully visualise the costs they have incurred as well as identify any trends, allowing them to make more informed decisions. With the success of its first year,

KAS BANK are now working with several defined benefit pension schemes which will uplift the current UK pension cost benchmarking feature for comparison across schemes. . Going into 2019, several technical developments will enhance KAS BANKS current dashboard making it fit for defined contributions (DC) schemes, assisting trustees in reporting on the level of transaction costs borne

by members in their annual Chair’s Statement, a mandatory requirement since 2015. Specification of the dashboard for DC schemes will also ensure trustees meet the FCA regulation on reporting on value for money, highlighted in January 2018. Enhancements will also ensure the service is aligned to the cost template as proposed by the IDWG. Although some in the industry may see cost transparency as a challenge, opportunity lies in the benefit of putting trus-

tees in greater control of their schemes and equipping them with the right tools to improve decision making and meet their regulatory requirements. More transparency is always positive and it is clear that greater awareness and understanding of costs will improve governance, bring tangible benefits to a pension scheme, ultimately resulting in better outcomes for scheme members. the collaborative, campaigning community dedicated to driving up the levels of transparency in financial services, right around the world. the official publication of the Transparency Task Force. It is a great opportunity for our community to share news and views, insights and ideas, right around the world. how we bring people togethor to discuss and debate the key issues and to listen to thought leaders on the vital topic of transparency in financial services. awarded to one individual/organisation at each of our Transparency Symposia, in recognition of the contribution they are making to encourage greater transparency.

The Transparency Task For

While we value every member of our campaigning com They are particularly aligned to our cause and, as such, positive change. They are our Transparency Task Force Ambassadors.





Larry Bates


The Wealth Game


Jackie Beard

Director of Manager Research Services EMEA

Morningstar Europe Ltd


JB Beckett

Consulting Chief Investment Officer/UK Lead

New Fund Order Consulting/ Association of Professional Fund Investors


Steve Conley

Chief Executive

Values Based Adviser


Stephen Davis

Associate Director and Senior Fellow

Harvard Law School Programs on Corporate Governance and Institutional Investors

Larry Elford


Investor Advocates

Richard Field


Institute for Financial Transparency

Ralph Frank

Co-Head DC


Dr. Nicholas Morris

Adjunct Professor

University of New South Wales


Ian Fryer

Head of Research

Chant West


Daniel Godfrey

Non-Executive Director

Big Issue Fund Management


Darby Hobbs

Co-Founder and Chairperson

Conscious Capitalism Boston Chapter


Catherine Howarth

Chief Executive



Con Keating

Head of Research

BrightonRock Group


George Kinder


Kinder Institute of Life Planning

David Knox

Senior Partner


Peter Kolthof

Partner and Head of the Netherlands

Avida International

Markus Krebsz

Interim Chief Risk Officer



Jon Lukomnik

Executive Director

IRCC Institute

USA – New York

Rory Maguire




Philip Meadowcroft

Independent Shareholder Activist



Matthew Murray


Centre for Business Ethics and Corporate Governance

Bernie Nelson

President – North America

Style Research

David Pitt-Watson


London Business School


Robin Powell


Ember Regis Group


Paul Secunda

Professor of Law and Director, Labor and Employment Law Program

Marquette University Law School


Kara Tan Bhala

President and Founder

Seven Pillars Institute for Global Finance and Ethics

USA – Kansas

Henry Tapper


Pension PlayPen


Anna Tilba

Lecturer in Startegy and Corporate Governance

Newcastle University Business School


Chris Tobe


Stable Value Consultants


Eric Veldpaus

Founder and Managing Director

Institutional Benchmarking Institute


USA – Boston Canada USA – Boston UK

USA – Boston Australia Netherlands

USA – Washington USA – Boston


The Transparency Times | | December 2018 | Edition #32

rce Ambassadors

mmunity, some go over and above. , are profoundly impactful for





Ian Peacock

Chief Client Officer

IG Group


Mark Polson

Founder and Principal

The Lang Cat


Lorelei Graye


Leodoran Financial


Adam Choppin

Investment Officer

FIS Group


Mike Barrett

Consulting Director

The Lang Cat


Julia Dreblow


SRI Services & Fund Eco Market


Helen Scott

Chief Executive Officer

Eris FX


Greg Rogers




Charlie Atkins




Thomas Wifffels

Senior Policy Advisor

The Federation of Dutch Pensions


Andrew Parry

Head of Sustainable Investing

Hermes Investment Management


James Daley

Managing Director

Fairer Finance


William Price

Global Pensions Consultant

The World Bank


David Stripp

Proposition Manager

David Stripp Limited


Jon Spain


Law for Life


David Rowe


David M. Rowe Risk Advisory


Francesco Briganti

Secretary General

Cross Border Benefits Alliance Europe


Helen Spoto


Sentry Financial Planning


John Spoto


Sentry Financial Planning


Ruston Smith


Tesco Pension Trustee Board


Mark Falcon

Founder and Director



Pascal Hogenboom

Associate Director

Strategia Worldwide


Paul Bates

Senior Counsel

Paul Bates Barrister


Andrew Mills

Founder and Director

Insight Financial Research


Sunil Chadda

Advisory Board Member

Association of Professional Fund Investors


Paddy Delaney


Informed Decisions Blog & Podcast

Bob Compton

Managing Director

Arc Benefits


Wendy Addison


Speak Out-Speak Up


Michael Erlanger

Founder & Managing Principal


Edition #32 | December 2018 | | The Transparency Times



The Transparency Task Force Teams The TTF Teams are our collective response to the extensive need for reform of the financial services sector, right around the world. We believe that those who areaware of issues should collaborate with others to put things right - it’s in everyone’s interest to do so. Our Teams are all about understanding the potential power of working together to drive much needed change by harnessing the transformational power of transparency. Each of of our teams have a meeting/conference call quarterly. For further information please get in touch through: Team



Highlight pro-transparency best practice around the world.

Market Integrity

Championing ethical practices.

Costs and Charges

Helping investors access better value for money.

Foreign Exchange

Challenging the extensive opacity in the FX market.


Promoting transparency in Europe, the Middle East and Africa.


Dealing with a wide range of opacity problems in pensions


Representing organisations that have technologies available that positively align with the TTF’s overall aims


Help improve the standard of communications throughout financial services


Campaigning for the Banks to treat their business and retail customers in a more transparent way

Financial Planning

Driving greater professionalism into the sector


Raising awareness of what can be done to reduce scamming


Encouraging the capital markets become a force for good

Asset Management

Encouraging the world’s Asset Managers to behave in a more progressive and pro-consumer way

Financial Stability

Working to mitigate the risk of another Global Financial Crisis.


Promoting transparency in the Asia Pacific area.


Promoting transparency in Europe, the Middle East and Africa.

Team Americas

Promoting transparency in North and South America.

Investment Consulting & Fiduciary Management

Improving the way the sector operates in light of the CMA’s investigation

Governance, Compliance, Risk, Legal & Keeping the financial services| sector “on the2018 straight and narrow” 24 The Transparency Times | December | Edition #32 Regulatory

The Transparency Task Force Advisory Board The Transparency Task Force has now grown to the point that an Advisory Board is now needed to formally shape our purpose and strategy moving forward.





John Howard Founding Chair of the Adviory Board


Consumer Insights


Lord Jamie Lindsay


UK Accreditation Servie


JB Beckett

Consulting Chief Investment Officer/UK Lead

New Fund Order Consulting Association of Professional Fund Investors


David Weeks




John Rosling




Margaret Snowdon

Non-Executive Director

The Pensions Regulator and Phoenix Group


Steve Kenzie

Ececutive Director

UN Global Impact UK


Baroness Ros Altmann

Pensions Expert

House of Lords


Matthew Simms


River and Mercantile Solutions


David Pitt-Watson

Visiting Fellow

Cambridge Judge Business School


Gavin Starks


D Gen


Susan Flood


ARK Campaign Group


Heather Buchanan

Policy Director

APPG on Fairer Business Banking


Julia Dreblow


SRI Services & Fund EcoMarket


Sue Lewis


Alistair Kellie

Managing Partner

Newgate Communications


Henry Tapper


Pension PlayPen


David Masters




Sarah Wilson


Minerva Analytics


Edition #32 | December 2018 | | The Transparency Times


The Director y of P r oo-rTyraonfsparen t c e r i D cy e Th O rrgeannciysations a p s n a r T Pro O rg a n i s a t i o n s

A business shouldn’t stand out because it’s ‘pro-transparency’, it should be the norm. If you lead a pro-transparency organisation, join those already advertising in our directory. The more firms are seen here, the more weight gathers behind our argument that transparency is a commercial virtue and not a threat. We’re happy to consider classifications beyond those shown here. Please contact for more information.


The Transparency Times | | December 2018 | Edition #32

ACADEMIC INSTITUTIONS Prof. Dr. Heinz-Dietrich Steinmeyer University of Muenster, Germany School of Law, Universitätsstrasse 14-16D-48143 e: Muenster phone: 49-251-8329744 m: 49-171-8384816 I am a professor for Social Security Law, Labour Law and Civil Law at the University of Muenster Law School. My special field is pensions – occupational/ supplementary pensions as well as public pensions. I am doing consulting work nationally and internationally including international organizations (EU etc.). I am the Chairman of the European Network for Research on Supplementary Pensions.

AUTO ENROLMENT Steve Conley, Managing Director, Workplace Pensions Direct e: w: t: 0113 457 4563 m: 07850 102070 Since 2015, Workplace Pensions Direct has made auto-enrolment simpler for small businesses, enabling employers to focus on running their companies without having to worry about pension law, and the cost of poor pension decisions. Workplace Pensions Direct offers an affordable, end-to-end, auto-enrolment solution that guarantees compliance with the law. With professional expertise, a century of payroll and pensions experience, and professional indemnity insurance – Workplace Pensions Direct has removed the worry and risk of autoenrolment for thousands of small businesses and their advisers.

Gavin Perera-Betts, Chief customer officer, NEST e: w: t: 020 3056 3719 NEST has been set up by the government especially for auto enrolment. We’re here to make sure that every employer has access to a workplace pension scheme that meets the requirements of the new pension rules. But we do more than just meet the regulatory minimum. NEST comes packed with the sort of high-quality features you need, whether you’re saving with us, using us for your workers or helping your employer clients.

COMMUNICATIONS CONSULTANTS Lesley Alexander, Managing Director, Ferrier Pearce e: w: t: 020 3772 5360 Transparency – clarity, straightforwardness, honesty. As communications consultants, we support transparency in financial products, especially long-term savings. This applies not just to charges, but to the way we describe the products and their benefits to consumers. We believe the language we use should be clear, unambiguous and direct, helping people to make the most out of their money.

DATA SERVICES Larry McLaughlin, CEO | GSAV Ltd e: w: t: +44 203 655 2182 m: +44 7771 978 118 US m: x+1 646 946 5272 GSAV Ltd is Reg Tech/Fin Tech company exclusively serving the Buy-Side and delivering pricing solutions in the Collateral Lending Market to benefit Beneficial Owners and enable Managers to meet their Fiduciary and Regulatory obligations. GSAVr is a specialist pricing, tracking and regulatory tool and provides an independent price for collateral lending transactions that defines rate and use in a manner that the Regulators feels meets the test of both price and use. GSAVr is the only solution available today that addresses the current challenges of any form of collateralized lending, full price discovery and full price transparency.

Edition #32 | December 2018 | | The Transparency Times


David Rich MIod, CEO | Accurate Data Services e: w: t: 01603 813366 m: 07919918623 David is Chief Executive of Accurate Data Services, a specialistdata quality and positive people tracing business that is focused on unclaimed assets in the financial service sectors. ADS traces lost members, clients and policy holders for a variety of organisations including Life and Pensions funds, Banks and Asset Managers. The goal is to help businesses reunite their customers / members with their assets and deliver positive consumer outcomes. David is an active campaigner for transparency and action around the large unclaimed assets issues present in the UK.

FIDUCIARY MANAGERS Ralph Frank, CEO DC (UK), Cardano e: w: t: +44 (0)20 3170 5910 Cardano was founded in 2000 and now has over 150 staff with backgrounds in the areas of risk management, investment management, research, actuarial and investment advisory. Cardano studies the causes and impact of risk and costs in order to significantly improve financial performance and resilience. We currently provide Investment Advisory or Fiduciary Management services to over 1.3m pension fund beneficiaries with assets totalling over £120bn.

FINANCIAL PLANNING Mike Stafford CFP, Director, Stafford Wealth Management e: w: t: 01992 501601 Stafford Wealth Management was formed in 1986 to provide bespoke lifestyle financial planning and investment services to private clients. It is one of a small number of elite firms in the UK that is accredited by the Chartered Institute for Securities and Investment. Stafford Wealth Management is authorised and regulated by the Financial Conduct Authority for investment business.

INVESTMENT CONSULTANTS Marcus Whitehead, Head of Investment Consulting, Partner, Barnett Waddingham e: w: t: 0333 11 11 222 Barnett Waddingham has grown to become the UK’s largest independent provider of actuarial, administration and consultancy services. Our total headcount is now over 850 – with offices in seven locations around the UK. The investment consulting practice provides bespoke, independent investment advice to over 360 pension schemes with assets from the millions to billions. We continue to provide the personal, quality, tailored approach that has made us successful and has led to high levels of client retention.

INVESTMENT GOVERNANCE CONSULTANTS James N Meenan, Principal | JNM Investment Governance e: w: t: +353 (0)1 687 1027 m: +353 (0)86 257 2646 JNM Investment Governance gives trustees independent coaching and support to develop strategies and techniques to stem the overwhelming resource handicap they face in discussions with investment professionals. JNM’s objective is to facilitate a constructive two way dialogue with attendant benefits for all parties.

Henrik Pedersen, Managing Partner & Co-Founder, Clerus LLP e: w: t: +44 20 3356 2845 m: +44 7767 656234 We partner with pension schemes and other asset owners to review and improve investment decisions, governance and value-for-money, through independent and informed investment analysis. As a result, investment outcomes can be improved without the need to change service providers or taking on more investment risk. We offer a free initial assessment, so why not try us out?


The Transparency Times | | December 2018 | Edition #32

INVESTMENT MANAGEMENT Robin O’Grady, Head of Business Development, Hawksmoor Investment Management e: w: t: 01392 410180 m: 07468 697900 Hawksmoor specialises in providing high quality discretionary investment management services for private clients including trusts, pension schemes and charities. We are a privately owned business with no ties to a bank or any other financial institution. Our experienced and well qualified team of investment professionals is focused solely on providing clients with the best service and consistently good performance.

NOT FOR PROFIT Dr. Kara Tan Bhala, President & founder, Seven Pillars Institute for Global Finance and Ethics e: w: t: +1(785)865-8824 (mobile) Seven Pillars Institute (SPI) for Global Finance and Ethics is an independent, nonprofit 501(c)(3), nonpartisan, organization whose mission is to highlight and analyze issues of moral philosophy in global financial markets with a view to enhancing ethical practice and policy.

PENSION ADMINISTRATION Margaret Snowdon OBE, Chairman, Pensions Administration Standards Association e: w: m: 07983 565955 The Pensions Administration Standards Association (PASA) is a not-for-profit organisation which acts as a focal point to engage with industry and government on pensions administration matters. It was created to provide an independent infrastructure to set, develop, and provide guidance on pensions administration standards. It is an independent accreditation body, assessing the achievement of good pension administration standards by schemes and providers.

RESEARCH Jackie Beard, Director of Manager Research Services EMEA e: w: Morningstar is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data and research insights on a wide range of investment offerings including managed investment products, publicly listed companies, private capital markets, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than USD $200 billion in assets under advisement and management as of 31 December 2016. The company has operations in 27 countries.


COLOURS CMYK C100 M88 Y0 K0 C0 M0 Y0 K0



Arno Kitts, Founder & Chief Investment Officer, Perspective Investments C0 M0 Y0 K0

e: w: t: +44 20 3290 6486 Perspective Investments is a multi-asset multi-strategy investment COLOURS CMYK C100 M88 Y0 K0 manager. We invest on behalf of our clients, including our founder C0 M0 Y0 K0 family. Our commitment to our clients is to help them achieve their financial objectives. We do this by aiming to deliver higher returns with lower volatility and better capital COLOURS CMYK preservation than conventional equity portfolios. Of course, while our investment performance track record C100 M96 Y8 K5 is consistent with this aim, past investment performance is not necessarily predictive of future results. C0 M0 Y0 K0

Edition #32 | December 2018 | | The Transparency Times COLOURS CMYK


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The Transparency Times | | December 2018 | Edition #32

Transparency Times #32 December 2018  

The Transparency Times is the official publication of the Transparency Task Force, the collaborative, campaigning community dedicated to dri...

Transparency Times #32 December 2018  

The Transparency Times is the official publication of the Transparency Task Force, the collaborative, campaigning community dedicated to dri...