prince charles warns pension fund industryIt is surely a sign of just how dysfunctional our world is becoming that a statement of the blinding obvious should make headlines.

Yet that is what happened when Prince Charles used a pre-recorded address to the National Association of Pension Funds conference to call for a long-term approach to investing so as to avoid the risk of a miserable future for future generations.

Pensions – a long-term business?  What an idea!  Who’d have thought it!

Well, most people do: especially us at The Whitehall Partnership where the long-term nurture and protection of our clients’ wealth – especially from the high hidden fees that eat away at returns – is a principal consideration.

But it seems that it has been forgotten in many sectors of the financial services industry, where short-termism and the need to rebuild balance sheets – at the expense usually of customers – in the aftermath of the great financial crash of 2008 holds sway.

So it needs someone as eminent as Prince Charles to make public statements of the obvious if the industry is to be jolted out of its current obsession and made to focus on farther horizons.

In his address to the NAPF, Prince Charles linked the role of pension funds to the need to tackle insanity in the ecological sphere as well as the financial.

Here is what had to say:

“We live in an increasingly uncertain time. We are facing what could be described as a perfect storm: the combination of pollution and overconsumption of finite natural resources, the very real and accumulating risk of catastrophic climate change, unprecedented levels of financial indebtedness and a population of seven billion that is rising fast.

“Pension funds have a need and arguably a duty to ensure that these emerging environmental, economic and social risks are identified an managed.

“With an ageing population and pension fund liabilities that are therefore stretching out for many decades, surely the current focus on quarterly capitalism is becoming increasingly unfit for purpose.

“There is mounting evidence from the likes of Harvard and London business schools that those companies that improve the way they tackle environmental and social challenges prove to the be the ones better able to deliver long term returns – so you can have your cake and eat it.

“I know that old habits die hard and that it is difficult to make the first move, but is there not a case for ensuring your portfolios are resilient in the long term? Could you do so by incorporating sustainability into your mainstream strategy?

“By contributing to the long-term sustainability of nature’s economy, in other words the maintenance of vital ecosystem services on which the durability of our own economy ultimately depends, pension funds can help to preserve the real value of beneficiaries’ retirement income.

“It falls to you [pension funds], I’m afraid, to help shape a system designed for the 21st and not the 19th century.

“Make that innovative and imaginary leap that the world so badly needs, otherwise your grandchildren, and mine for that matter, will be consigned to an exceptionally miserable future.”

I’m not so sure that Prince Charles’s grandchildren will have to face an impoverished old age, but I hope his words will be taken to heart by the pensions industry.

For unbiased and independent financial advice on how to ensure that your savings and investments are going to protect your future and that of your children and grandchildren, call The Whitehall Partnership today on 0845 43 49 250 to arrange a free initial meeting, without commitment, at a time and place of your own choosing.


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