My 14 year old neighbour was telling me on the weekend how much she dislikes garlic.
"How will you keep the vampires away, then?" I asked, a propos of nothing in particular.
"Why would you want to do that? Vampires are cool!" she responded incredulously. "I've watched the whole of the second series of Twilight." she added by way of explanation.
Now, when I was her age (which was not that long ago) vampires films definitely belonged on the shelf marked 'horror' in the local video store (OK, it was quite long ago). And the cold war had us all preoccupied with the threat of global thermonuclear warfare.
So now, vampires are cool, and it seems we're more worried about the threats of asymetric warfare and cyber-attacks. How the world has changed.
The relevance is, of course, that my neighbour is, or at the very least will shortly be, part of our target markets. But her consciousness is seeded with very different, almost opposite, notions to my own. How do we incorporate such different fundamental world-views into our product and marketing strategies?
I am sure that there are lots of other ideas which have been turned on their heads with the next generation. If you have any in mind, I'd love to hear about them in the comments below.
Is transparency enough?
Last night's Panorama investigation into pension fund charges, and this article in the Telegraph, have once again shone the spotlight on fund charges. The conventional wisdom seems to be to push for greater transparency in fees. I'm all for that - but I am not sure it will be enough.
Knowing what fees you're being charged is one thing. But I don't believe that the average investor is able to fully understand the impact those fees have on their pensions and investments. It takes a fair amount of sophisticated maths to calculate the fee drag on £100 a month invested with a 1.25% management charge, not too mention any other charges such as dealing and custody charges that may be thrown in on top.
I believe a better solution would be to force all funds to report performance after all costs have been taken into account. The equivalent of an APR calculation for fund performance, if you like. That way, investors would be better able to assess whether their pension fund had performed better than their cash in the bank over the last year.
(Where a fund changes its charging structure, the rules could be such that the fund would also have to restate its historic performance as if the new structure had been put in place.)
Of course, that provides a backward looking view only. So we'd still need all the transparency in order to formulate a forward looking view. However, I believe it would put the average retail investor in a much better position to assess whether they felt they were getting value for money.
What do you think?
Knowing what fees you're being charged is one thing. But I don't believe that the average investor is able to fully understand the impact those fees have on their pensions and investments. It takes a fair amount of sophisticated maths to calculate the fee drag on £100 a month invested with a 1.25% management charge, not too mention any other charges such as dealing and custody charges that may be thrown in on top.
I believe a better solution would be to force all funds to report performance after all costs have been taken into account. The equivalent of an APR calculation for fund performance, if you like. That way, investors would be better able to assess whether their pension fund had performed better than their cash in the bank over the last year.
(Where a fund changes its charging structure, the rules could be such that the fund would also have to restate its historic performance as if the new structure had been put in place.)
Of course, that provides a backward looking view only. So we'd still need all the transparency in order to formulate a forward looking view. However, I believe it would put the average retail investor in a much better position to assess whether they felt they were getting value for money.
What do you think?
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