The Ruminations of Ruby the Cat

I have spent a happy Easter with the extra excitement of mint chocolate. Oh, how I enjoy mint. However, serious reading and conversations have been going on in the kitchen, and the topic appears to be “stagflation.” Initially, I was quite scared because I have always been led to believe that stags were enormous animals — well, enormous to me — and I had visions of such an animal invading and disrupting the garden. It appears that is not the case; it is merely a disturbance of the economy. I fear this may result in inferior food on my plate and no further mint Easter eggs. In any event, look out for the next newsletter, which will tell you more….

I overheard my owner exclaiming, ‘I have repeatedly told my clients that one of the well-trodden paths to ease the stress of one’s family having to find the money to pay Inheritance Tax is to have a life assurance policy in place.’

She continued, ‘It pays out on the death of the family member to named beneficiaries, usually family members or the executor of the estate.’

She had just spotted an article in the Saturday Financial Times, titled ‘Life insurance sales surge in wake of Reeves’ inheritance tax shake-up’. Hopefully, she said, some clients have read this excellent report and will be motivated to revisit the topic at their next review meeting.

I have to report that I am having terrible trouble with my owner. She constantly paces the floor, despairing of the situation in the Middle East and the increased price of fuel. It seems set to affect every part of life, including the transportation of food. I am also worried. Is it likely that there may be a scarcity of my special cat treats?

The worried frown on her face continues. For months she has been muttering about the increased risk to the retirement savings of approximately 22 million scheme members. Apparently, a number of pension providers have signed up to the Mansion House Accord, which was proposed as a voluntary agreement to invest at least 10% of the capital invested in their workplace pension default funds in unlisted securities. She was concerned that this proposal would increase the risk to individuals’ retirement savings and potentially lead to lower returns. If that was not bad enough, she has now learned that Clause 40 of the Pension Schemes Bill, if passed, would grant the government the mandate to enforce the Accord. The trade bodies, Pensions UK and the ABI, have called for the clause to be cut from the legislation. Let’s hope this happens. Until then, I fear her blood pressure will continue to be high.

Carole’s mood at this time of year can only be described as ‘stressed but focused’. She is so focused on making sure that all her clients have made good tax decisions before 5th April, and have paid into their pension and ISA savings accounts, that I frequently worry she will forget to feed me.

However, out of the blue, it appeared as though the sun was shining in her life. Back came the luggage from London, there was time for a tickle behind the ears, and she remarked on how useful she had found the Premier Miton Conference she had attended. She mused on how important it was to take time out from the hassle of keeping all the business balls spinning, and to listen to the commitment of those who are managing our clients’ money.

This week, I found a unique spot in the hallway where the sun is shining through the glass in the door. I’ve taken up my favourite position (rolled onto my back with paws neatly folded) and I’m dreamily thinking of Carole’s thoughts this week; they really fit my mood.

Her thoughts arose from reading the Financial Times (Saturday 14 February edition), in particular Stuart Kirk’s article under the heading “The lost art of self-validation”. The article led her to ponder upon what happens in business. The Regulator is keen that each financial services company should validate the level of its service through responses from the recipients: the clients.

Overall, clients score the service given by Nicholls Stevens highly. But the thought-provoking article emphasised that what really matters is that each member of the team should focus on excellence without the applause.

This is an excellent message for all of us, and Carole resolves to look for this motivation in those who seek to work for the firm, both now and in the future. Let’s hope this isn’t like some of her New Year’s resolutions, which sometimes don’t last beyond February – but I suspect this one will be long term.

I have to say, Carole has had a cold this week and that does not seem to have improved her mood. Listening to her phone calls with colleagues, it seems that she is responding well to the fact that recent civil service retirees are not getting their pension benefits paid on time.

Your reaction to this statement may be, “What a heartless woman,” but it turns out this is far from the truth. Apparently, for years the “small people” in pension schemes have been suffering a similar situation, receiving poor administration from providers and administrators when the time comes to take the retirement income they have strived for. Unfortunately, to date no one has taken much notice… except the retiree who needs the money to which they are entitled. She thinks that now government employees are suffering the same fate, something may be done. Let’s hope so; then she might cheer up and give me some of those nice crunchy cat treats.

I was interested to learn from my eavesdropping that the reason for the delays is not all down to poor administration: a great deal of it is because of the extreme complexity of pension legislation in the UK. Retiree benefits often have to be tested against numerous allowances and restrictions at the time when the benefits are due to be paid out.

Simplification of pensions legislation is needed. It would help savers understand their benefits and receive them on time. It would also mean that administrators should be able to provide their services at a lower fee level. The costs for pension administration are high because of this complexity; these costs are sometimes met by the employer, but more often by the scheme member, and most probably have a direct or indirect effect on the final value of the pension benefits.

I’m not sure if Carole will pension me off, but if she does, I hope I get my cat food for life on time.

This week, my owner’s thoughts have strayed to the topic of age: in particular, retirement age. I suspect this is because she is nearing her birthday. It is a topic upon which she has very definite views. In her opinion, if you have skills, you should use them, and it does not matter if you are young or old. We all have much to offer.

This is reflected in the recruiting ethos of Nicholls Stevens. When recruiting, age – whether young or old – is never a barrier in the selection process. Anyone with suitable skills will always be welcome in the team.

I suspect the topic was thrust to the forefront of her mind when she discovered that the new Archbishop of Canterbury, as a Lord Spiritual, will be forced to retire at age 70. That gives her only five years in her new role. By contrast, there is currently no retirement date set for Life Peers. The retirement age for Life Peers is under review, but even if it is changed it will be set at age 80. Maybe the retirement age for the Lords Spiritual also needs to be reviewed.

May I introduce myself? I am Ruby, the Nicholls family cat. I am, in fact, a very handsome male (please do not be confused by my name) Maine Coon, rescued by the family at birth. In return for their generosity in feeding and loving me, I spend a great deal of time listening in on Carole Nicholls’ thoughts about her business and the political and economic state of the world; from time to time, she says I am free to share them with readers.

Thoughts this week: I have found her in good spirits. It appears that each year the business runs a winter seminar in London and Bristol; these happened last week and were a great success. Carole so loves meeting up and talking to her clients.

Her good humour seems to have continued. I got some of my extra-nice food last night when she returned from a conference in Cardiff held by the Financial Services Regulator. I found this good humour strange—are people not supposed to find a regulator someone who depresses rather than cheers you up? Apparently not in the case of finance. I heard her telling a colleague that she was impressed by how much they were now willing to listen to the needs of the adviser community.

She was also “over the moon” because she had met two of her students she had not seen for many years: one now ran his own business, and the other had a management role in one of the large insurance providers. Carole has always been a leader in the need for financial education and, for many years, ran a training company and taught advisers on their journey to qualification. In fact, the business currently has such a trainee adviser.

Let’s hope the good humour continues. I’m not sure it will, with the news coming out of Davos.