Pensions and investment professionals are angry about opacity in the functioning of UK financial services. Transparency Task Force founder Andy Agathangelou wants to harness their energy. John Greenwood reports
They say everyone is good at something. For Andy Agathangelou, that something seems to be identifying the moment when an idea or market dynamic’s time has come, harnessing it and building a movement around it.
Agathangelou holds a unique position in the pensions sector – a role that is hard to define. Facilitator, networker, marketeer, project manager,
campaigner: these all describe the work he has done in the fields of member nominated trustees, auto-enrolment and data standards, and which he is now applying to the gargantuan issue that is transparency in pensions and other financial services products.
Readily confessing he has little or no personal expertise in the issues he has taken on, his real skill is bringing people together, harnessing their energy and driving them towards genuine objectives.
“To get a pearl you need a bit of grit,” says Agathangelou. “I see myself as the bit of grit around which the pearl is created. I seem to have the ability to be the catalyst that helps others to do what they can do.
“Over recent months, I have met lots of people for whom transparency is an important issue but they have been working independently on their own, not achieving very much and getting frustrated.”
So why, from a career perspective, take up the option of setting up stand-alone projects independent of any existing organisation, rather than taking a project-management role within an established player?
“Various things I have been involved with in the past few years all had the idea that things could be better. For example, when I was working at Pitmans Trustees with Richard Butcher, we concluded it was very clear that member nominated trustees were underperforming because of a lack of awareness of the issues they needed to understand. And we realised we could create a way for them to improve – and that mindset turned into the Association of Member Nominated Trustees.
“Similarly, when I started working for the Chartered Institute of Payroll Professionals, we realised it was very likely there were going to be severe capacity crunch issues in the marketplace because of auto-enrolment. And one’s mind immediately turned to what could be done to improve the market as a whole.
“The common theme is improving performance. And with the Transparency Task Force, the basic problem we have is: what’s wrong with the reputation of financial services? And there is a lot wrong with it.
“So what are the sorts of things we can do to improve it? And within that is a real need to improve transparency,” he says.
Agathangelou is methodical in his process of tapping into doers rather than talkers, and in taking disparate forces of energy and channelling them in a more focused direction.
“I recall a Friends of AE session we did at the Gherkin: looking across at these people having
these discussions and feeling the energy coming off the room. Most of the people there hadn’t known each other before they arrived.
“I asked myself ‘What is going on here?’ and I literally Googled ‘Driving force for people who
have a predisposition to collaborate.’
“That is where I stumbled across this ethics philosophy called enlightened self-interest. And it is a beautiful bit of chemistry, where people who are trying to achieve something realise they can get what they want by helping other people to get what they want,” he says.
For that reason, Agathangelou’s focus is on those who already have something they want to achieve. “My outlook is not to persuade people to be interested in doing something; it is to find the people who already are. And there are loads of people out there who want to improve transparency,” he says.
Talking to Agathangelou, it becomes clear he believes passionately that transparency should be improved, but by his own admission maybe not as much as many of the people he engages
with. Where he offers something different is in his belief that he has identified a group with a shared energy for change, which he can channel into something meaningful.
His realisation that transparency should be his next big project was the result of his own ‘light-bulb moment’. “Quite a freaky thing happened,” he explains. “I was having a conversation with two people, Con Keating of Brighton Rock Group and Chris Sear, managing director at Kas Bank, in Kas Bank’s office. Con made a comment that the lightbulb in the room was annoying him and had done on numerous occasions. While he was being distracted by this lightbulb, Chris was explaining the difference between Dutch and UK approaches to transparency.
“From somewhere the metaphor came that there was an inevitability that, in years to come, financial services would be transparent. And I said it was a bit like the idea that some day someone would fix that lightbulb. And so the idea was born that maybe we could apply some of the methodology of Friends of AE and AMNT to bring people together for change.”
The early signs are that the movement will effect change. Packed meetings have galvanised stakeholders, with scores of individuals committing to take part in teams created to focus expertise across five key areas that the group has determined are in need of further scrutiny: data, transaction costs and charges, rationale for decision-making, stewardship and terms and conditions.
These working groups will meet, gather and share knowledge and come up with formalised proposals for improving transparency, not just in the world of pensions but also in other areas of financial services such as non-pensions retail products and banking.
October will bring what Agathangelou bills as the world’s first transparency symposium, in London. The task force’s Transparency Times newsletter, meanwhile, is going out to more than 1,900 industry figures.
The detail of transparency is, he freely admits, not his bag – that he leaves to others.
“Without a doubt, I am not a subject matter expert whatsoever. When I chaired my first Pensions BIB meeting, 90 per cent of the technical matter was over my head. What I did know, though, was how to identify the common themes and goals and bring them together. The rest of it is the application of good old sales management in a different environment – understanding objectives and how to achieve them,” he says.
That said, he is clear that transparency, or a lack of it, is adversely affecting the businesses operating in financial services, meaning everyone loses out in the long term.
“At one of our recent meetings, we had a breakout session where we asked what misselling activities had taken place to bring about this state of affairs. And it won’t surprise you that we came up with a very long list, going all the way back through Robert Maxwell, endowment mortgages, etcetera, and we got to about 35 different identifiable events where financial services had shown its predisposition to self-harm. I believe a lot of those scandals would not have happened to the same extent if there had been a high level of transparency in place at the time. I see a real correlation between transparency and trust.
“And I suspect there is a link between low levels of retirement saving and low levels of trust. Our population has been educated to mistrust financial services because of its predisposition to self-harm,” he says.
Three types of interest
Agathangelou identifies three types of people at TTF meetings. “There are those who think there is a risk for them and their organisation should this transparency zeitgeist continue. These are organisations whose best years are behind them. They may be profitable now but they will struggle in a highly transparent mindset going forward. And they are coming along to see what things look like. I think they are a minority.
“Then there are those with a passing interest but who are not motivated enough to get involved with what we are doing, and that is fine.
“Then there is the third group: these are the true leaders who, for reasons of mindset, philosophy, outlook, feel this is the way we should go,” he says.
So will the movement conflict with other initiatives at government, regulator, political party and industry body level?
“The TTF will help whatever government measures are taken to be more readily accepted in the market. It’s like a ready-made consultation for them in the way the work we have done for the CIPP has been of great benefit connecting people. We are making a difference already. I would not be surprised if a few of the pro-transparency activities in the past few months have been accelerated because of what we are doing, and we haven’t even got off the blocks yet.”
And does he think there are forces of evil at work in the City obstructing what he and others like him are trying to achieve?
“My default position is that people behave like people. If people are used to getting away with certain things and that is the norm, then human nature means most people will do that. When endowment misselling, Libor fixing, etcetera, were going on, it felt in some way justifiable to the people doing it. I have a sales background and I am sure many of the misselling issues we have had are because, at the time, it seemed like a good thing to do.
“Endowment misselling is a classic example. The pitch was: ‘We don’t know how big your lump sum is going to be and yes, theoretically there may not be enough there to pay it off. But based on all this information, that is unlikely.’ Looking back, that was a massive misselling scandal, but at the time it didn’t feel like that.
“So I don’t see it so much as dark forces; I think it is human nature. Certainly there is nothing particularly squeaky clean about me. I’m a normal person; I haven’t got a holier-than-thou outlook.”
So why do certain providers stonewall on charge transparency, for example? Corporate Adviser has asked numerous providers for research costs paid for through transaction charges and all but a couple have refused to be transparent.
Agathangelou says: “If you drill into that, you may find that part of the reason for their reluctance in giving it where no one else does is because that would leave them at a competitive disadvantage.”
He freely admits he is running a business that taps into individuals’ goodwill. “Transparency Task Force Limited is a company. It has £5,000, which I put into it. There has to be a monetisation angle to it otherwise it would not be sustainable.
“At the moment, I am doing what I am doing for free. We haven’t yet got sponsorship or backing. I am itching to spend some money on the website. The money we are getting from the event in October is going into the website.
“I have worked out I can go a year doing one day a week on the TTF and if, in a year’s time, I have a model that is reasonably self-sufficient and can monetise itself, then brilliant. It’s a bit of a gamble.
I may end up losing a bit of money and a hell of a lot of time but my gut feeling is that there is just too much goodwill for it not to come off,” he says.
So what will his next project be? “I wonder if there will be one – and I say that because, when we set up the blueprint for the TTF, we decided to make it about financial services. But there is no geographical boundary here.
“I would love to get involved with the international perspective of the TTF. Similarly, we are not limiting this to workplace pensions.
“What about retail financial services, what about Isas, what about banking? I can never outgrow this subject; it’s a million times bigger than I am. I could see out the rest of my career with the Friends of AE, Pensions BIB and the TTF. This is the biggest of them all.”
All about Andy Agathangelou
May 2015-present – Founding chair, Transparency Task Force
April 2014-present – Chairman, Pensions BIB
January 2014-present – Founding chair, Friends of Auto-enrolment
July 2010-present – Founding chair, Friends of Association of Member Nominated Trustees
February 2002-present – Managing director, Extra Clients (a marketing and business development company)
October 2012-November 2013 – Head of strategic relationships, Close Brothers
May 2010-September 2012 – Head of business development and training, Pitmans Trustees