The pensions and asset management industry has been "tarred with the brush of the financial services industry", leading to a lack of trust among the public, SCM Direct co-founder and transparency and ethics activist Gina Miller has claimed.
Speaking at the Pensions and Lifetime Savings Association's Investment Conference, Friday 9 March, Miller discussed how the pensions and asset management industry can work to overcome the general public mistrust.
As the pensions and asset management industry has been "branded" in the same category as the broader finance and banking sector, uniformed consumers can become doubtful and wary of the sector.
There is a need for the industry to be proactive to recover its reputation and regain public trust and understanding; "It will be tough to build up a tainted brand, but what is the alternative?" Miller said.
Moreover, it may also be the tainted image of the pensions and asset management sector that has led to a lack of diversity in the industry when it comes to ethnic minorities, Miller suggested. "Maybe because they or their parents don't want them to go into an industry that are known for ripping people off".
In order to tackle this mistrust, the industry needs to be "more proactive in defending what we do", Miller stated.
She explained that a possible solution could involve the introduction of financial education, with the implementation of modules such as mortgages, pensions and investments at universities. This would be an "easy win" for the industry as it is at university where people first begin to take note of money, Miller added.
There should be an "industry-wide sponsoring of something like this," Miller commented. An initiative of this kind would be "actually giving back and not just about earning money for yourself."
Miller's encouragement of the need for transparency was shared among speakers at the conference. Financial Conduct Authority director of competition and chief economist Mary Starks explained the regulator's aim to "make it easier" for consumers to compare drawdown products in the market. Consumers should be encouraged to better understand which product will offer better outcomes. The FCA is looking for pension product providers to offer good value and "actively and honestly" retain consumers, rather than relying on consumer inertia or a lack of understanding, she added.
Similarly, Competition and Markets Authority project director Alison Gold, outlined the need for transparency around fiduciary management fees, quality and performance of investment consultants to enable trustees to make informed decisions.