Prince Charles gets it right on pensions
But when he started sticking his two-pence in about pensions last week my ears pricked up and I'm shocked to admit I actually find myself agreeing with him!
Charles hasn't been that keen on giving his opinions on Britain's financial services sector, sticking instead to the blight of modern buildings and sustainable farming. But it would seem that his passion for all things green (let's ignore for a moment the enormous carbon footprint he must rack up flying in a private jet around the world) has been the catalyst for espousing his thoughts on pensions.
He has urged the investment companies that invest our pension money to think green and sustainable and to think about the future of ours, and his, grandchildren. Quite rightly Charles goes on to say that for too long the pensions industry has been led by short-termism and although his idea may be routed in long-term sustainable investments, he's hit the nail on the head when it comes to pension investment full stop.
We trust investment companies with our hard earned cash and expect them to think about making sure the customer – us – receives as much as we can over the decades of investment to prepare us comfortably for retirement.
This doesn't sound unreasonable when you consider the myriad charges that are levied for trying to set yourself up for retirement but unfortunately it's not the way fund managers work.
They work short-term, they work to quarterly reports which show how well they're doing in any particular three month period, and they work to bonuses predicated on how well they do over a 12 month timeframe.
Surely this mis-match of priorities can only work in the favour of one party, and I'll tell you for nothing it's not the consumers.
It's not just the misalignment of priorities but the short-termism feeds through into investors who, even though are investing over a maybe 40 year period, are scared by the constant peaks and troughs they see reported each quarter. This concern leads to herd mentality where people strip money out at the bottom and invest at the top – the cardinal sin of investing.
Quarterly reporting is already being examined by the fund groups and the question they have to ask is who does it benefit? The consumer or the egos of the fund manager.