WEBVTT - Your Pension, Your Problem? Inside Nest’s Big Investment Shift 0:00:02.720 --> 0:00:18.520 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:19.160 --> 0:00:21.360 Welcome to Marren Talk to Your Money, the personal finance 0:00:21.480 --> 0:00:24.239 edition of Marin Talks Money. In these bonus podcasts, we 0:00:24.320 --> 0:00:26.400 talk about the best strategies we're making the most of 0:00:26.560 --> 0:00:29.080 your money. I'm married. Someone'sup web and with me seior 0:00:29.080 --> 0:00:31.280 a border of money. Just add the John stuff back 0:00:31.480 --> 0:00:39.159 John him. Now, John, you and I both have pensions. 0:00:39.200 --> 0:00:43.640 We both have defined contribution pensions, not defined benefit pensions. 0:00:43.680 --> 0:00:46.360 And we have those because, like we're gonna say, like 0:00:46.400 --> 0:00:48.360 the majority of people in the UK, maybe that's not 0:00:48.400 --> 0:00:50.440 really true, Like a lot of people in the UK 0:00:50.479 --> 0:00:52.559 we're employed in the private sector. It's definitely not the 0:00:52.560 --> 0:00:54.280 majority of the UK is. It might come back to 0:00:54.320 --> 0:00:56.840 that another time. Anyway, I'm eploying the private sector. That 0:00:56.880 --> 0:01:00.600 means we have defined contribution pensions, which means that between us, 0:01:01.120 --> 0:01:04.640 us and our employer pops of money into an account 0:01:05.160 --> 0:01:09.000 and it's looked after, hopefully during the period of our employment, 0:01:09.000 --> 0:01:10.560 and then when we retire we have a lump sum 0:01:10.560 --> 0:01:11.959 of some sort and we can figure out what to 0:01:12.000 --> 0:01:15.759 do with it. Now, there are various companies that offer 0:01:16.160 --> 0:01:19.600 this to people, this ability to have their defined contribution 0:01:19.840 --> 0:01:21.840 money managed, But one of the biggest in the UK 0:01:22.280 --> 0:01:26.880 is the publicly supported NEST pensions, and neither of us 0:01:26.959 --> 0:01:28.560 have art pensions in those those are not the ones 0:01:28.640 --> 0:01:30.800 used by our employers, but none the less, an awful 0:01:30.840 --> 0:01:34.320 lot of people do. So this pension scheme has thirteen 0:01:34.400 --> 0:01:37.520 point nine million members. That is a lot of people. 0:01:38.040 --> 0:01:40.080 In fact, that might be that's pretty much all the 0:01:40.080 --> 0:01:46.440 people in work in the UK, isn't it comment? Low 0:01:46.480 --> 0:01:50.760 comment anyway? And it has assets under management of sixty 0:01:50.960 --> 0:01:57.080 one point two billion pounds, so real money. So there's 0:01:57.120 --> 0:02:00.840 a very strong chance that reasonable number of our listeners 0:02:00.920 --> 0:02:05.160 will have their money in the various funds run by NEST. 0:02:05.400 --> 0:02:07.560 And the reason I wanted to talk about that this 0:02:07.600 --> 0:02:09.880 week is because there've been various headlines over the last 0:02:09.880 --> 0:02:13.799 week or so about UK pension scheme. NEST commits four 0:02:13.880 --> 0:02:18.320 hundred and fifty million pounds to US private credit sector. Obviously, 0:02:18.320 --> 0:02:21.480 that's usually followed by despite sector headwinds, despite a bundle 0:02:21.480 --> 0:02:24.200 of drawers, et cetera, et cetera. Now four hundred and 0:02:24.200 --> 0:02:25.799 fifty million, I guess you might say it's not a 0:02:25.840 --> 0:02:27.600 huge amount of money in the scheme of sixty one 0:02:27.639 --> 0:02:32.320 point two billion pounds. But but NEST has a very 0:02:32.360 --> 0:02:36.360 public target of having thirty percent of his AUM in 0:02:36.440 --> 0:02:40.080 private assets of one sort or another by twenty thirty, 0:02:40.120 --> 0:02:42.799 so it wanted to have both private equity and private 0:02:42.800 --> 0:02:45.919 credit at thirty percent. So there's quite a lot of 0:02:46.200 --> 0:02:50.360 interesting things here. I think. The first is that it 0:02:50.400 --> 0:02:54.480 wants to put all this money into private The second 0:02:55.000 --> 0:02:56.800 is that a lot of the headlines you see that 0:02:56.840 --> 0:02:59.200 come out about it putting money into private are foreign. 0:02:59.440 --> 0:03:02.120 This is not four hundred and fifty million pounds into 0:03:02.520 --> 0:03:05.600 UK based private equity and private credit funds. It's four 0:03:05.720 --> 0:03:09.119 hundred and fifty million to US private credit. So that's 0:03:09.240 --> 0:03:11.360 two interesting things. And the third interesting thing that I 0:03:11.360 --> 0:03:13.919 think you notice as soon as you go and look 0:03:13.960 --> 0:03:16.720 at NEST and look at its funds is the extent 0:03:16.800 --> 0:03:20.000 to which a lot of the investment is environmental, and 0:03:20.040 --> 0:03:25.440 in particular climate driven. In a NEST has a target 0:03:25.520 --> 0:03:28.639 to get to net zero, is committed to net zero 0:03:28.680 --> 0:03:31.800 along the way, so a lot of its equity investments 0:03:31.800 --> 0:03:35.960 are climate aware one way or another. So I suppose 0:03:35.960 --> 0:03:39.040 that there are a couple of questions that we should 0:03:39.040 --> 0:03:41.080 talk about. I mean, one you could say is there's 0:03:41.080 --> 0:03:43.760 a really real time to invest in private credit. And 0:03:44.040 --> 0:03:47.960 the second I suppose is are people are aware of 0:03:48.160 --> 0:03:52.680 how Nest invests and does it matter? So if Nest 0:03:52.760 --> 0:03:57.080 is investing in a very equity climate aware equity way, 0:03:57.560 --> 0:04:01.240 and that's not something that everyone feels mad for, whether 0:04:01.240 --> 0:04:04.320 they should orhouldn't, it's a different matter. And if Nest 0:04:04.400 --> 0:04:07.360 is investing a lot in US private credit, should that 0:04:07.400 --> 0:04:09.640 be discussed? Should people be aware of it? Should maybe 0:04:09.680 --> 0:04:13.440 there be somewhere asking the end investor, Hey guys, do 0:04:13.520 --> 0:04:15.040 you want us to put a large don't give your 0:04:15.080 --> 0:04:17.880 money into American private credit? Or did you have some 0:04:17.960 --> 0:04:20.640 other ideas? And somehow that this shift from the old 0:04:20.680 --> 0:04:23.760 fashioned dB pensions where where it was really your problem 0:04:23.800 --> 0:04:26.040 what the money was invested in. You've got your pension 0:04:26.080 --> 0:04:28.599 at the end, towards something where it kind of is 0:04:28.640 --> 0:04:31.440 your problem what the money is invested in, and maybe 0:04:31.480 --> 0:04:34.839 you should have more of a say over it. So 0:04:35.560 --> 0:04:37.719 a couple of interesting things there, And I'm going to 0:04:37.800 --> 0:04:39.200 tuck the back at you and you look at this, 0:04:39.560 --> 0:04:40.520 what strikes you? 0:04:41.240 --> 0:04:44.200 I mean, I think that's a really important point about 0:04:44.279 --> 0:04:48.080 people haven't been more involved with their own investments. And 0:04:48.120 --> 0:04:50.599 I do think one of the positives coming or to 0:04:50.680 --> 0:04:54.440 enrollment all our time will be that people will be 0:04:54.480 --> 0:04:57.120 more in casable investments. I know it's their all pal 0:04:57.320 --> 0:05:01.440 sim in French from Parmier Leverum about how the UK 0:05:01.560 --> 0:05:04.200 doesn't have a kind of four h one key chat 0:05:04.279 --> 0:05:07.560 culture as the US does. But over time, if everyone 0:05:07.640 --> 0:05:09.880 actually has to worry about what's in their pension gets 0:05:09.880 --> 0:05:13.000 to grips with that, then that could be positive for 0:05:13.240 --> 0:05:17.560 investment in this country. But the other problem is that 0:05:17.640 --> 0:05:20.039 auto enrollment is the kind of thing that people will 0:05:20.080 --> 0:05:22.520 sit there, They'll say, oh, I'm getting paid into a 0:05:22.600 --> 0:05:25.719 workplace pension scheme. I mean, one of the reasons there 0:05:25.800 --> 0:05:29.200 is an opt out is because that's that's to make 0:05:29.240 --> 0:05:31.520 people do it by default. The problem is that when 0:05:31.560 --> 0:05:33.440 people are doing it by default, they don't think about 0:05:33.480 --> 0:05:35.880 what's in it, or they can't be bored with the hurdles. 0:05:36.120 --> 0:05:38.039 And to be fair, I went on the nest scheme 0:05:38.200 --> 0:05:40.800 for something that it's completely different from this topic, but 0:05:40.839 --> 0:05:43.760 a bit earlier today, and you can you know, it's 0:05:43.839 --> 0:05:46.120 it's not hard to look up what they're invested in. 0:05:46.160 --> 0:05:50.520 But the question is is anyone going to bother? And 0:05:50.600 --> 0:05:54.440 I do think that the and I don't know who 0:05:54.480 --> 0:05:57.320 does it because they look, if you're listening to this 0:05:57.760 --> 0:06:00.800 right and we are talking to you directly and you 0:06:00.839 --> 0:06:02.960 don't know what's in your pension or to enrollment scheme, 0:06:03.040 --> 0:06:05.600 go and check it. Don't be all easy. This is important, 0:06:06.120 --> 0:06:09.800 but we only have so many, you know, million listeners. 0:06:10.839 --> 0:06:14.000 They'll put asterisk by that and then you know it's 0:06:14.120 --> 0:06:17.080 it's so. So how do you get the message across? 0:06:17.160 --> 0:06:20.080 Is there something that you have to drop on employers 0:06:20.120 --> 0:06:24.120 to knut like, you know, educate their employees and say, look, 0:06:24.200 --> 0:06:27.240 this is, by the way, what what they're investing. But 0:06:27.240 --> 0:06:30.680 then you're going down the whole other rabbit hole of. 0:06:30.800 --> 0:06:33.240 I think this is the improved responsible Well I don't 0:06:33.240 --> 0:06:36.039 think so either, But who who's I mean, once you 0:06:36.240 --> 0:06:42.320 have your once you have your your investments at nest 0:06:42.480 --> 0:06:44.760 or believe that or whether it is, is your provider, 0:06:45.279 --> 0:06:47.840 and it makes sense to me that they should have 0:06:47.960 --> 0:06:50.520 more responsibilities. I mean, I don't, I don't know what 0:06:50.600 --> 0:06:52.640 you get. I think we have different providers. But you know, 0:06:52.680 --> 0:06:54.360 I got something in the post every now and then 0:06:54.400 --> 0:06:57.159 and it's a completely meaningless drivel and I then have 0:06:57.240 --> 0:06:59.320 to go onto the internet and spent hours trying to 0:06:59.320 --> 0:07:01.840 find the truth. Even even so I can never find 0:07:01.839 --> 0:07:04.479 out things like I mean, you can you can see 0:07:04.640 --> 0:07:06.680 that the amount of money you had at the beginning 0:07:06.720 --> 0:07:08.440 of a particular period and the amount of money that 0:07:08.520 --> 0:07:10.480 you have at the end of a particular period, but 0:07:10.680 --> 0:07:14.320 it isn't divided up, for example, into how much of 0:07:14.360 --> 0:07:17.400 that is an actual return and how much is that 0:07:17.520 --> 0:07:19.560 is you handing even more money to the provider. So 0:07:19.840 --> 0:07:23.080 the information that's provided by these penchion providers, I still 0:07:23.120 --> 0:07:27.360 think it's pretty minimal. But more importantly, it would seem 0:07:27.400 --> 0:07:29.280 to me that something like we're going to put thirty 0:07:29.280 --> 0:07:32.560 percent of your money into the private markets, that I 0:07:32.600 --> 0:07:37.000 think should come with an email to everybody saying, hey, 0:07:37.120 --> 0:07:40.120 this is our policy. I wonder how you feel about it. 0:07:40.320 --> 0:07:43.200 These are the upsides, and these are the downsides, These 0:07:43.200 --> 0:07:47.960 are the risks, and not necessarily that nests should then 0:07:48.040 --> 0:07:50.080 respond by going sixty percent of people don't want to 0:07:50.080 --> 0:07:52.160 be in private actively, so we shouldn't do that. But 0:07:52.280 --> 0:07:56.000 that people feel that they're in some way involved, that 0:07:56.040 --> 0:07:59.280 they have some agency over their own money, and that 0:07:59.320 --> 0:08:02.280 they're provider are listening, and I think that we can 0:08:02.560 --> 0:08:06.200 we can move that conversation forward. If the fund management 0:08:06.240 --> 0:08:09.000 companies were a little bit more proactive and this isn't 0:08:09.040 --> 0:08:11.360 complicated these days. I mean, you couldn't be proactive and 0:08:11.560 --> 0:08:13.800 in the way that we're discussing twenty five years ago. 0:08:13.840 --> 0:08:16.840 But technology has moved on very dramatically and you can 0:08:16.960 --> 0:08:17.920 be that proactive. 0:08:18.360 --> 0:08:21.200 I mean, that's to feel that's a good point. I 0:08:21.240 --> 0:08:21.600 think that. 0:08:23.800 --> 0:08:27.320 I also think that if they had to do that, 0:08:27.440 --> 0:08:32.920 they might think things through a bit more clearly, because 0:08:32.920 --> 0:08:34.920 I think a lot of this stuff is quite knee jerk. 0:08:36.440 --> 0:08:38.280 I mean, because well, I mean, going back to private 0:08:38.280 --> 0:08:42.720 credit for a moment, I think I'm the ESG stuff too. 0:08:43.280 --> 0:08:50.319 I mean, both of those things are fads whose time 0:08:51.040 --> 0:08:54.920 has arguably passed, or or which you could turn and 0:08:54.960 --> 0:08:57.520 say that, okay, there was a period for which those 0:08:58.000 --> 0:09:01.800 apparently worked, but the condition under which they worked have changed. 0:09:02.320 --> 0:09:06.559 And also, you know, that's not that's not a contrarian 0:09:06.600 --> 0:09:09.160 thing even to say now. And a lot of the time, 0:09:09.160 --> 0:09:12.000 I think with these big pension organizations, the problem is 0:09:12.040 --> 0:09:17.199 that they've started a process rolling there's maybe like five 0:09:17.280 --> 0:09:19.199 years behind the times or something like that, and it's 0:09:19.240 --> 0:09:22.080 kind of like, oh, well, we must get more assets 0:09:22.120 --> 0:09:25.680 in private so we must get more money into private assets. 0:09:25.920 --> 0:09:28.760 But actually the time for doing that was ten years ago, 0:09:29.080 --> 0:09:30.920 and it's only just now that you're kind of catching 0:09:31.000 --> 0:09:32.880 up with it, because you know, I mean, there's the 0:09:33.160 --> 0:09:35.600 mansion house is one thing, and the mansion house stuff 0:09:35.679 --> 0:09:38.360 is that you've got to put ten percent of your 0:09:39.800 --> 0:09:43.520 assets under management into unlisted stuff and at least five 0:09:43.520 --> 0:09:46.360 percent of that has to be or half of the 0:09:46.400 --> 0:09:49.400 ten percent has to be in UK related assets. And 0:09:49.440 --> 0:09:51.040 that's I mean, I think that's a daft thing in 0:09:51.080 --> 0:09:54.720 the first place, but that's not the only driver. If 0:09:54.760 --> 0:09:57.520 you're looking at putting thirty percent and you're suddenly taking 0:09:57.520 --> 0:10:00.640 out half a billion of exposure to us VIC created it. 0:10:01.400 --> 0:10:05.360 So you know what, I do find it oid that 0:10:05.440 --> 0:10:09.560 there's this push for a full thood to be in 0:10:09.840 --> 0:10:12.880 unless the diocese when they can the iloquidity premium does 0:10:12.880 --> 0:10:14.640 not seem to be there at the moment. 0:10:26.400 --> 0:10:29.800 Yeah, yeah, interesting, and they haven't moved that far down 0:10:30.280 --> 0:10:31.960 this yet. I'm just having a look at some of 0:10:32.000 --> 0:10:36.000 the big chart in front of fifty less retirement date funds, 0:10:36.040 --> 0:10:38.600 including the startup fund blah blah blah. As I'm looking 0:10:38.679 --> 0:10:43.040 at the less retirement date fund in twenty fifty. I, 0:10:43.040 --> 0:10:46.559 if that's when you're going to retap, You've got forty 0:10:46.600 --> 0:10:49.880 two point five percent in climate aware global developed equities. 0:10:50.559 --> 0:10:55.040 Let's hope that's what you wanted. Five private credit, three 0:10:55.040 --> 0:10:59.199 point seven percent in rising obviously small amounts of bonds, 0:10:59.240 --> 0:11:03.319 bond bond liberal, a bit of sterling, infrastructure equity three 0:11:03.360 --> 0:11:08.240 point two renewable equity, infrastructure, and then private actually comes 0:11:08.240 --> 0:11:11.920 in at four point four. So in most funds you're 0:11:11.920 --> 0:11:16.360 still under ten percent private credit, private assets in general, 0:11:16.400 --> 0:11:21.040 as far as I can see you arising. 0:11:20.520 --> 0:11:23.040 Yeah, infrastructure, get something else? 0:11:23.240 --> 0:11:24.839 No? Is it infrastructure? 0:11:25.000 --> 0:11:25.280 Yeah? 0:11:25.320 --> 0:11:27.280 And also I think I think, yeah, I was looking 0:11:27.280 --> 0:11:29.199 at I was just looking at SETI wire for at 0:11:29.240 --> 0:11:29.800 all view. 0:11:29.840 --> 0:11:31.199 This morning I read. 0:11:31.000 --> 0:11:32.880 An article, a recent article the other that said this 0:11:32.880 --> 0:11:35.160 whole idiot fifteen percent overall. 0:11:35.840 --> 0:11:39.080 So well, I'm looking at rather than specific. 0:11:40.000 --> 0:11:42.319 Yes, exactly. Well, I'm looking at the retirement date funds, which, 0:11:42.360 --> 0:11:44.920 by the way, the ones that the most people will own. 0:11:45.280 --> 0:11:47.040 I think these are the defaults. But there's also the 0:11:47.080 --> 0:11:49.240 growth fund, which I'm not looking at right now, but 0:11:49.240 --> 0:11:53.400 I would imagine probably a higher allocation to private. But 0:11:53.480 --> 0:11:55.360 I tell you what there is not an obvious and 0:11:55.480 --> 0:11:59.640 direct allocation too is yes, you guess did UK equities? 0:11:59.720 --> 0:12:01.360 Yeah? Yeah, I was looking for that. 0:12:01.360 --> 0:12:04.120 That's what I was looking for this morning because we 0:12:04.120 --> 0:12:08.280 were briefly we sort of mentioned maybe tomby price controls 0:12:08.280 --> 0:12:11.200 and I wanted to look at who Tesco shareholder base was, 0:12:11.320 --> 0:12:13.240 and I was kind of looking at, you know, pension 0:12:13.240 --> 0:12:15.760 funds and obviously Tescos is owned by a lot of 0:12:15.880 --> 0:12:20.320 different institutions, and obviously Nest does own some Tesco via 0:12:20.520 --> 0:12:22.840 other pension funds. But yeah, I was kind of like 0:12:22.880 --> 0:12:26.120 flitting through all the kind of funds and yeah, there 0:12:26.160 --> 0:12:31.840 is no listed there's no specific UK equities go here, 0:12:32.320 --> 0:12:35.600 And I think that's that's wrong. 0:12:37.160 --> 0:12:39.320 You know, Yes, I mean, here are you looking at 0:12:39.360 --> 0:12:43.599 something with this and this extraordinary level of aum, with 0:12:43.760 --> 0:12:48.280 going on fourteen million UK workers and vested in it. 0:12:48.400 --> 0:12:50.800 And maybe maybe you would say, well, you know, if 0:12:51.000 --> 0:12:53.760 if the people who hold this punch of fund are 0:12:53.800 --> 0:12:56.720 already working for the big UK companies, then maybe we 0:12:56.720 --> 0:13:00.520 should diversify them by holding holding equities. I mean, that 0:13:00.559 --> 0:13:03.120 would be one way of looking at it, I guess, 0:13:03.200 --> 0:13:05.440 but I'd be more likely, I think, to think we'll 0:13:05.480 --> 0:13:08.280 hang on a check. With all this money, you could 0:13:08.280 --> 0:13:11.319 have a genuine influence on the UK market. Will you 0:13:11.360 --> 0:13:12.439 to decide to use it? 0:13:12.640 --> 0:13:12.880 Yeah? 0:13:13.000 --> 0:13:15.920 And I mean all you're really doing then is leaving 0:13:16.040 --> 0:13:18.600 the you know, the way open to you know, the 0:13:18.600 --> 0:13:22.000 black Rocks and the vantguards this world, or the Norwegian 0:13:22.000 --> 0:13:24.600 pension fund. I'm not saying that any of them have good, 0:13:24.600 --> 0:13:28.319 bad intentions, but if you've got a UK domicile, UK 0:13:28.520 --> 0:13:32.199 funded massive pension fund, then you know, I mean, it's 0:13:32.240 --> 0:13:35.079 the closest thing in an SWUF that we will ever get. 0:13:36.720 --> 0:13:40.480 So you know, the idea that is not really like 0:13:40.559 --> 0:13:45.240 it's only taking a negligible steak in British listed companies 0:13:45.320 --> 0:13:50.679 in British financial infrastructure feels like a missed opportunity. 0:13:50.960 --> 0:13:51.880 Is that how they put it? 0:13:52.080 --> 0:13:56.000 Maybe this is another thing, and this for those of 0:13:56.040 --> 0:14:00.960 you running nest pensions, this is active advice. Why don't 0:14:01.080 --> 0:14:06.520 you send emails to everybody invested in all your giant 0:14:06.559 --> 0:14:08.839 funds and ask them what they would like? Would they 0:14:09.080 --> 0:14:12.840 like you maybe to invest less in American private equity 0:14:12.880 --> 0:14:16.520 and private credit and maybe a bit more and already 0:14:16.600 --> 0:14:20.240 listed not particularly expensive UK equity is just an idea. 0:14:20.280 --> 0:14:23.040 But where we're super proch held a democracy. 0:14:23.040 --> 0:14:24.240 Help me, John, Yeah, and I. 0:14:24.160 --> 0:14:29.640 Think that your basic point you want to get people 0:14:29.680 --> 0:14:32.320 more involved, and it's possible to get people more involved, 0:14:32.840 --> 0:14:35.160 And yeah, you're right from the education point of view. Yeah, 0:14:35.200 --> 0:14:37.320 I mean the fund provide employee is the best one 0:14:37.400 --> 0:14:40.400 to do it, or at least to be lumbard with 0:14:40.400 --> 0:14:42.960 that particular responsibility. 0:14:43.440 --> 0:14:43.960 Yeah. 0:14:44.120 --> 0:14:44.320 Right. 0:14:44.560 --> 0:14:46.760 There's one other thing I wanted to talk about today, 0:14:46.800 --> 0:14:50.479 and it's kind of connected. Actually, it's about be knowledgeable, 0:14:50.720 --> 0:14:53.160 be aware, be on top of this stuff. Know what 0:14:53.320 --> 0:14:56.560 is happening to your investments. And you know, John, nobody 0:14:56.600 --> 0:14:59.560 hates ADMIN more than I do. You don't even at 0:14:59.600 --> 0:15:00.680 admin as much as I do. 0:15:00.840 --> 0:15:03.720 Right, we would need to have a proper competition of it. 0:15:04.040 --> 0:15:05.800 I have to see to see. 0:15:06.240 --> 0:15:08.120 I reckon we could find it. I neglect it more 0:15:08.120 --> 0:15:11.720 than you do. But anyway, under that, but you've got 0:15:11.760 --> 0:15:13.600 to be on top of the stuff. Now. One of 0:15:13.600 --> 0:15:15.720 the things I wanted to talk about was this report 0:15:15.840 --> 0:15:17.720 that it was not really more of a comment a 0:15:17.800 --> 0:15:20.680 thought of the day from one of our favorite analysts 0:15:20.720 --> 0:15:25.880 at Pamel Liberian, and he points it out that there's 0:15:25.880 --> 0:15:29.920 a study from Germany which shows that the advice you 0:15:29.960 --> 0:15:32.480 were given. The investment advice that you were given in Germany, 0:15:32.480 --> 0:15:35.640 by the way it is not here, differs by gender. 0:15:36.760 --> 0:15:38.840 So here are the things. Women are six percent less 0:15:38.880 --> 0:15:40.920 likely to get a rebate on a fund they invest in, 0:15:41.240 --> 0:15:43.400 and if they do get a rebate, they get a 0:15:43.440 --> 0:15:47.200 significantly lower one than men get. At the same time, 0:15:47.240 --> 0:15:49.480 they're more likely five percent more likely. I mean, you'll 0:15:49.520 --> 0:15:51.840 say that not enough to be statistically significant in it, 0:15:51.840 --> 0:15:54.200 but I'm gonna still think is five percent more likely 0:15:54.240 --> 0:15:57.080 to get a recommendation to invest in an in house fund. 0:15:57.360 --> 0:15:59.360 The wont about that being, of course, that the wealth 0:15:59.360 --> 0:16:01.840 management company in question will make it way more money 0:16:01.880 --> 0:16:04.400 and fees on an in house fund than an out 0:16:04.400 --> 0:16:06.920 of house fund, and more likely to be recommended in 0:16:06.920 --> 0:16:09.360 in house multi asset funds to make I make a 0:16:09.400 --> 0:16:14.480 lot more money from that. At the same time, sixty 0:16:14.520 --> 0:16:17.040 three percent of men get a recommendation to invest in 0:16:17.080 --> 0:16:21.080 the most expensive funds in any particular category, but seventy 0:16:21.280 --> 0:16:24.320 three point two percent of women get that recommendation. So 0:16:24.360 --> 0:16:26.920 what you've got here is, again I repeat, not here 0:16:27.080 --> 0:16:30.360 in Germany, a very clear division. And again you'll say 0:16:30.400 --> 0:16:32.200 it's only five or six percentage points. I think that's 0:16:32.280 --> 0:16:34.720 enough to make the argument a clear division between the 0:16:34.760 --> 0:16:37.520 type of advice given to different types of people. Now, 0:16:39.200 --> 0:16:41.120 I suppose the way for us to look at this 0:16:41.440 --> 0:16:43.400 is to say, let's not make this all about gender. 0:16:43.640 --> 0:16:46.720 It seems to be that what is happening here is 0:16:46.760 --> 0:16:51.040 that German wealth managers in IFAs automatically see their female 0:16:51.120 --> 0:16:57.000 clients as less financially sophisticated than their male clients, and 0:16:57.560 --> 0:17:00.880 so give different types of advice. I make as much 0:17:00.920 --> 0:17:02.760 money as they can get away with from each class, 0:17:02.760 --> 0:17:04.159 and they think they can get away with more with 0:17:04.200 --> 0:17:07.840 their less sophisticated class. You could take gender out of it, right. 0:17:08.480 --> 0:17:11.560 I think yeah, I think you could. And we've often 0:17:11.560 --> 0:17:15.679 discussed that there are some frustration frustrating assumptions made about 0:17:15.800 --> 0:17:19.000 women and investing in men about investing that probably don't 0:17:19.359 --> 0:17:22.879 really hold true or certainly aren't about gender. But I 0:17:22.920 --> 0:17:27.400 think you get that is an absolutely fair point about 0:17:27.800 --> 0:17:32.920 seeing someone that you're assuming to be less sophisticated and 0:17:32.960 --> 0:17:36.639 then but presumably actually getting away with it because I'm 0:17:36.640 --> 0:17:39.080 assuming that the advice that's been given here is the 0:17:39.119 --> 0:17:44.879 advice that's actually followed. I mean, obviously, yeah, okay. I mean, 0:17:44.880 --> 0:17:47.240 you can quibble with the statistical significance, although at the 0:17:47.280 --> 0:17:48.960 same time it's a big study. I mean they looked 0:17:48.960 --> 0:17:52.520 at about twenty seven thousand real world meetings between people, 0:17:52.560 --> 0:17:55.480 so you know, maybe you know, all of that kind 0:17:55.480 --> 0:17:59.359 of holds up. But I think the lesson really isn't 0:18:00.160 --> 0:18:01.959 This goes back to, as you say, what we were 0:18:02.000 --> 0:18:05.879 saying earlier. If you don't want to get taken advantage of, 0:18:05.960 --> 0:18:11.080 then you need to know something about this stuff, whether 0:18:11.160 --> 0:18:13.080 you like it or not, or you need to know 0:18:13.160 --> 0:18:15.159 someone that does it. It's a bit like if you're 0:18:15.200 --> 0:18:19.760 going by a used car, normally ideally take a man 0:18:20.000 --> 0:18:22.000 or take a pal that knows something about cars. 0:18:22.320 --> 0:18:24.119 I mean, don't take me, I know nothing. 0:18:25.680 --> 0:18:27.720 I think there have been several studies that it doesn't 0:18:27.720 --> 0:18:29.840 matter how little your man friend knows as long as 0:18:29.840 --> 0:18:30.480 you take them with you. 0:18:30.960 --> 0:18:35.080 Well okay, well in that case is just sex. It's 0:18:35.200 --> 0:18:35.880 quite hard. 0:18:37.720 --> 0:18:40.280 Not that much of that, not much of that pure 0:18:40.359 --> 0:18:42.040 sexism left in British society. 0:18:42.119 --> 0:18:45.280 I would say, yeah, to be feeling Britain is actually 0:18:45.760 --> 0:18:48.159 you know, and I'm not just saying this pure jingoism. 0:18:48.280 --> 0:18:51.480 If you look at you know, like EU. 0:18:51.240 --> 0:18:54.600 Studies on things like race, for example, then Britain's actually 0:18:55.040 --> 0:18:58.040 well in advance of most kind of European countries when 0:18:58.040 --> 0:19:01.080 it comes to that, so I would get something similar. 0:19:01.800 --> 0:19:06.879 It's true for sex as well. You know, I couldn't 0:19:06.880 --> 0:19:09.640 swear to that, but. 0:19:09.720 --> 0:19:12.520 Yeah, anyway, clear message, clear message. If you don't know 0:19:12.600 --> 0:19:15.440 much about finance and investing when you go to see 0:19:15.440 --> 0:19:18.119 a wealth manager, take someone with you or an IFA, 0:19:18.320 --> 0:19:20.080 take someone with you who does, or. 0:19:20.240 --> 0:19:22.480 You know you could do if you can't find a 0:19:22.480 --> 0:19:24.879 friend who knows something about it, first thing you do 0:19:24.920 --> 0:19:26.840 when you go in. As you see, I was listening 0:19:26.840 --> 0:19:30.080 to that Merriton Talks Money podcast the other day, you know, 0:19:30.280 --> 0:19:33.320 just casually drop that any conversation, drop that in. 0:19:33.400 --> 0:19:35.440 And then you could say to them and you should 0:19:35.520 --> 0:19:39.840 listen to that too, yes, yes, yes, yeah, some them 0:19:39.840 --> 0:19:40.280 the link. 0:19:40.640 --> 0:19:43.920 We'll just post out popularity with the IFA community there again. 0:19:45.440 --> 0:19:48.240 Well no, I mean, I think we've been historically critical 0:19:48.280 --> 0:19:51.440 of the IFA community, but also occasionally very prison of 0:19:51.520 --> 0:19:53.840 the IFA and the wealth manager community. I mean, I 0:19:53.880 --> 0:19:56.920 think they provide an extremely valuable service. Not everybody wants 0:19:56.920 --> 0:19:59.080 to do things themselves. That's interesting, I think because there's 0:19:59.080 --> 0:20:01.160 been a change in my way thinking. When we first 0:20:01.200 --> 0:20:04.040 started out, John all those years ago, I was absolutely 0:20:04.119 --> 0:20:07.880 determined that everybody must do everything for themselves. Everyone had 0:20:07.880 --> 0:20:10.000 to gala grab and manage their own money, et cetera, 0:20:10.000 --> 0:20:12.040 et cetera. And the years have gone by, I realized 0:20:12.040 --> 0:20:16.359 that it's just stupid, never gonna happen. And you know, 0:20:16.520 --> 0:20:19.520 most people they don't want to. They don't want to, 0:20:19.640 --> 0:20:22.840 They've got enough to do. And also crucially not that 0:20:22.880 --> 0:20:25.040 they don't want to do the admin admin admin admin. 0:20:25.080 --> 0:20:27.640 They also they don't want to stress. Most people do 0:20:27.680 --> 0:20:29.000 not want to wake up in the middle of the 0:20:29.080 --> 0:20:32.480 night wondering about what's happened to their money, and in 0:20:32.560 --> 0:20:35.360 difficult times, they don't want to be constantly checking their 0:20:35.359 --> 0:20:37.120 portfolio except do you know what they want They want 0:20:37.200 --> 0:20:38.640 someone else to do that for them. 0:20:38.960 --> 0:20:40.760 Yeah, I mean this speaks sense. 0:20:43.320 --> 0:20:46.240 No, no, no, I don't want to. 0:20:46.840 --> 0:20:48.480 I mean so, yeah, I mean to be fair, Yeah, 0:20:48.480 --> 0:20:50.560 I mean we get change people they do things and 0:20:50.600 --> 0:20:53.119 they know and professionals to do stuff. 0:20:53.160 --> 0:20:53.639 You know, I don't. 0:20:53.680 --> 0:20:57.080 I certainly don't want to find myself either. So yeah, 0:20:57.119 --> 0:21:00.520 it's definitely there's a function. There is just that the information, 0:21:00.600 --> 0:21:03.720 the semetery was always the problem and I don't think 0:21:03.760 --> 0:21:08.080