You only think you’ve seen everything, but you haven’t. I mean…oh, let’s just not.
We might come back to what happens at moments like this in a moment, but in news of things that have not Hastened The Apocalypse, it’s ten years on since pension freedoms and so I thought we might dwell on that for a second.
(While we’re at it, it’s also ten years since the very first #langcatlive at the Truman Brewery. I’d make some wise observations about how what we covered then links to what’s going on today, but to be honest I was bricking myself so badly during it I barely remember. If you fancy a tenth anniversary event, keep reading by the way.)
Dan’s piece in Money Marketing is good on this, and has all the right stats in it, so if you want an update on what’s happened I suggest you hop over there, have a read and then come back.
The upshot of it all is that people behaved…almost entirely rationally. Folk with small pots who never wanted an annuity anyway did what gave them the most economic utility. Most other people who were going to depend on their accumulated pots took care of them, and if they were lucky enough to have an adviser then they might have got some smart tax advice too.
Not everything’s great – the scammers in particular have been at it, and as I think I’ve mentioned here before someone in my family fell prey to a boiler room outfit despite having access to all sorts of industry-specific help in walking form. Death is too good, etc.
But in the main, each individual behaved as one might expect them to.
This jumps me over to another bit of research I read this week on the YouGov website, and here it is. This is from the USA – you know, that place we used to sell single malt to – and looks at how investors handle volatility. I’m interested in this because much of the discourse planners use in the UK about the value of planning is about stopping people doing dumb things when markets get bouncy, and the research that’s based on is usually from the US. So in a week when markets are trampolining, fresh consumer research is very welcome.
If you read the piece, the subheading about what Americans do in times of volatility is misleading – it says that 2 in 5 investors stay the course. I can hear the LinkedIn planning brigade jumping on this like my dog going for dead seagulls. But if you read the chart, about 40% of investors stay the course. A further 21% don’t pay any attention to markets, which is what planners want from clients. And another 16% take professional advice. Add all that up and we have (assuming the advisers recommend staying invested) that’s well over 75% of investors who do exactly hee haw. Most of the rest make ‘careful’ adjustments and of course we can take that to mean whatever we want.
My point is that each individual makes their decisions for themselves, even if that decision is to trust their adviser or not. They don’t do it in aggregate, and except in the most extreme circumstances like the run on Northern Rock, the influence of media might well be overstated too.
As usual, Agent K sums it up better than me.
It’s not wise to put your trust in just anyone. But maybe we can trust investors and pension holders a little more than we think. Just a thought.
CATWALKING
Before I leave you, a quick bump for the Advicetech Catwalk 2 in London on 5 June. Entries are still open; we’ve got some excellent ones in so far but we are HUNGRY for MORE. If you are building technology for advisers we want to hear from you, and if we like the cut of your jib you could be up on our stage doing your thing.
And if you just want to come and see some cool tech, some great speakers and eat food and drink drinks then tickets are priced to own and available here. A sell-out last year; let’sdo that again…
I’m out and about next week so another Cat will Update you. Toodle pip, don’t buy the dip.
Mark
