PTL: A moment out of the shadows

Every year we pay billions of pounds to millions of people so they can live their retired life, hopefully with dignity and a sense of security. Yet, it’s a curious thing that most pension scheme members haven’t the faintest idea who we are, what we do, or even that we exist. Now, to be clear, I’m not unhappy with that, I sleep well, generally, in the knowledge that we’ve done a good job – I don’t need the recognition. So, it feels mighty odd when we do, on rare occasions, emerge from the shadows.

Earlier this year we announced the acquisition of PTL by Zedra. In the immediate aftermath of the deal, we had to work out who we were going to tell. There was a pecking order: The Pensions Regulator (in fact, we told them before and after the event), the PTL team, our clients, and the wider world. One decision we agonised over was “should we tell the members of the pension schemes we look after”. Our conclusion was not to – because, generally, they wouldn’t have the faintest idea who we were, what we do, or even that we exist and, in any event, the change would have no impact on them. As a general strategy this was fine, but, it seems, there were, in fact, some members who did indeed know who we were, and who cared what we did.

We were not obliged to tell members, but not telling them shone a light on an area of possible concern common to this sort of transaction. That area of concern was that new conflicts of interest could be created – potentially to their, the members’, disadvantage.

The owners of PTL weren’t looking to sell when we were approached by Zedra. But once we had been, it made increasingly good sense. There were a lot of factors in play, but one, in particular, was that they were not already in our market (with one exception which I’ll come to in a minute). If, for example, they’d been a benefit consultancy, it would have been a deal breaker – the risk of conflict of interest, and particularly the optical effect of that risk, would have been too great.

The exception was Zedra Inside Pensions (or ZIP) who’d been acquired by Zedra several months earlier, but as they mostly acted in a different part of the market to us and primarily provided a complementary function, we didn’t see this as a problem. We get on well with the ZIP team and we’re already collaborating on several initiatives, but the chances of us working on the same client remain fairly slim.

The protection of members’ interests, however, didn’t simply rely on our judgement. As a fiduciary we have a duty of care to them. As I tell the team and my co-trustees: “members are first, foremost, and always our main consideration” or as puts it, I think less poetically, we have a “duty of undivided loyalty to the member”. Our acquisition doesn’t change this. Undivided loyalty before, undivided loyalty after.

Now that’s not to say that we won’t work with our clients and our new wider group of colleagues to find more and better ways to help both members and clients, but it does mean we and our new colleagues will need to carefully calibrate the breadth and extent of this help. Our undivided loyalty is to the member, not principally the betterment of our clients and certainly not the wider commercial interests of our new colleagues.

There were some members who were concerned. Where they approached us direct, we have spoken to them to try and reassure them. We’ve also tried to reach out to some we heard indirectly were concerned. But, I guess, reassurance, even if earnest and honest, is rhetoric. The proof of the pudding, we told all of them, will be our slipping back into the shadows – unnoticed, unknown, unworried about, and getting on with doing a good job.

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