Season 3 Episode 19:
Guidance in the age of responsibility with Tom McPhail

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This week we’re talking consumer financial engagement with Tom McPhail, Director of Public Affairs at research consultancy the Lang Cat. In a previous role, Tom spent a decade as Head of policy at investment platform Hargreaves Lansdown. In this episode, we cover the transition to individual responsibility for pensions and savings in the UK, the role of regulation and policy interventions, and the different organisations trying to support individuals with investment and money advice. Tom shares his views on the FCA and financial product regulation in the UK over recent decades.

We discuss:

  • “We’re all investors now” – Tom’s thoughts/reflections on that question post-AE and pension freedoms. Do we, should we have more of an investor culture in the UK, and what would have to change for that to happen?
    • The decline of defined benefit investing, the shift to individual responsibility via the share ownership culture amid the privatisations of the 1980s, and the homeownership boom of the 1980s and 1990s.
    • We sketch out the broad outline of what the financial sector looks like in the UK and how the different parts of it try to support individuals. A key insight is to allow financial services firms to meet people halfway, give guidance, and steers they need to achieve good things rather than regulate too precisely.
  • How are individuals getting help/advice on their investments? We discuss Tom’s review of the Money and Pension Advice Service Maps (and background on what it is). For a long time, MAS (the predecessor to MAPS) weren’t making good use of their resources but that has changed, they've had a big transformation over the last few years.

    A key issue is that financial services are so alien to many people and they don’t know who to trust.
  • Consumer engagement and the trade-offs of defaults, regulation, and personal responsibilities. People probably do need a bit more of a push in the right direction than what currently is the case.
  • To what extent can the government, regulators, and providers do things for people, and to what extent do we have to find ways to get them to make decisions for themselves. Banks and platform providers do recognise the social value of delivering information and supporting individuals, so MaPs play a bit of a coordination role in harnessing the resources from the private sector.

    Tom’s view: we are where we are, make the most of it and harness the resources that we do have.
  • Investment platforms – Tom’s reflections on that business after being involved in it for so many years: trends, worries, things to look out for, the good/bad.
    • The regulator is getting more comfortable with allowing platforms to better communicate what they think is best for their clients.
    • Making more of connecting individuals through to the companies they are investing in and the decision being taken on their behalf on say voting.

What's one thing to take-away?

It’s all about engagement. How and what it looks like varies. No one size fits all. Finding a blend of defaults, scalable communications, and mass communications that helps people make critical decisions.

The most underappreciated thing about investing

Investing – it’s not actually that hard, just get started.


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