Paper: Producing decent returns for pensioners in turbulent times

The paper urges institutions to put themselves in the shoes of their ultimate client: people saving for retirement.

The underlying cause of the problem seems to be a typically British insistence onseeking to avoid risk, rather than a determination to manage it effectively.This hasproduced yet another case study in the laws of unintended consequences.Theseare being compounded by a‘little Englander’attitude to the way investment fundsare allocated to different classes of assets, ineffective regulation of Britain’s majorfinancial institutions,a yawning gap between the ultimate owners of UK publiccompanies and their managements,and perverse incentives for those managingother people’s money

World class asset management, Global asset allocation, Smart Indexation, Bridge the ownership gap, and Positive incentives for fund managers.

• The dismal performance of the UK fund management industry is one of the main reasons why the outlook for pensions and pensioners is distinctly cloudy.

• The underlying cause of the problem includes seeking to avoid risk. 

• This has created a gap between the ultimate owners of UK public companies and their managements, and perverse incentives for those managing other people’s money.

• The recent financial turmoil has made it more critical that all the institutions concerned abandon their conspiracy of silence and denial, and put themselves in the shoes of their ultimate client: People saving for their retirement.