No festival is complete without music. As I loitered at the fringes of a marquee, in Wednesday’s sweltering heat, sounds from nearby speakers streamed an eclectic mix of hillbilly country and Mexican mariachi as I watched the panel discussion on foreign exchange.
That’s right, a currency ‘act’ – because this was no ordinary festival, this was the FT’s Camp Alphaville, a seaside-themed feria of fintech with pavilions, street food, robots and drones.
There was sex, drugs and rock ‘n’ roll… well, there was a keynote from economist Diane Coyle on how the method for calculating GDP in advanced economies now takes account of prostitution (sex), research and development (eg drugs) and intellectual property (eg music copyright).
And the festival's tagline? ‘Peace. Love. Higher returns’ (I’m not joking).
Illustration by Ben Jennings
But why all this, you ask.
Because it was an opportunity for City slickers to view the world through the eyes of the futurist, to hear from the influencers driving the global economic, tech and finance agenda. Pinpointing the curve in order to get ahead of it.
Beyond the tongue-in-cheek tagline, it was a festival of innovation. And it’s this wider topic that’s been bubbling within the pensions industry of late.
Innovation has brought about several key development over the years, including liability-driven investing, smart beta and auto-enrolment, to name but a few.
But there is nothing new under the sun, as they say, and there seems to be mounting concern that beyond the clever recasting of old ideas, true innovation in pensions has somewhat stalled.
Pensions minister Ros Altmann’s most recent column contained a nudging suggestion that perhaps defined benefit funds could be doing more to tame their wayward funding levels.
In another example, a consultant I spoke with said the “obsession” with inflation-linked pensions will disappear, as it is less relevant now than in the 1970s. We could even have declining income as expenditure decreases later in retirement, he proffered.
Conversely, another I spoke to said inflation protection should be secured increasingly through derivatives and that further innovation around income investing is desperately required.
Pensions have come a long way in several areas of investment and scheme design, but there’s a sense that the fear of getting a decision wrong could be putting the kaibosh on creativity.
Perhaps a dose of courage is needed to accompany the caution.
Maxine Kelly is editor at Pensions Expert. You can follow her on Twitter @MaxineEK and the team @pensions_expert
