Secret IFA: Baby boomers have a lot to answer for

Secret IFA

I’m a late model ‘baby boomer’, that generation born between 1946 and 1964. As a late boomer I didn’t ride the whole wave of privilege and affluence associated with that era, but plenty of people did. Boy, have they got a lot to answer for, particularly those in financial services. When I think of their stupidity and greed it angers me.

And if it angers me, how angry would I be if I were Gen X or Gen Y? These (mostly retired) boomers have lived the good life at the expense of future generations - and there’s no come back.

Every sales director or manager who encouraged unprofitable business to be sold simply to hit a target meant future generations are working more for less. Actuaries who decided that offering guaranteed annuity rates at unsustainably high levels was a good idea, saddled companies with expensive liabilities – and as we saw, some companies didn’t survive.

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Bankers who bought banks at prices they couldn’t afford, life insurers who bought distribution only find they’d bought nothing of the sort, or the same bankers and insurers who bought chains of estate agents only see the owners take off and start again – stupidity, greed or both. It’s easy to spend other people’s money.

Occasionally the CEO of these companies becomes the ‘fall guy’ though they’ve kept their pension, their previous bonuses, and all the pay and perks they’d had along the way – their sense of entitlement makes them believe they’d earned them. And behind the fall guy is a legion of others who’ve had their snouts in the trough accumulating the same generous pensions, bonuses and perks.

There’s something wrong with a compensation culture that rewards too much, too soon, and has no mechanism for clawing it back when it becomes obvious they did a poor job. And it doesn’t just apply to financial services; it’s been rife across the private and public sectors alike.

In fact the public sector has been equally damaging and self serving. I was chatting to a senior civil servant recently, one of Boris’s cronies, and he unapologetically admitted as much. I’d have willingly kicked him in the shin if I thought I would get away with it.

So baby boomer fat cats and the older civil servants sit back secure in the knowledge their gold plated pensions will see them through retirement. They’ve earned it they say. And whilst wallowing in their sense of entitlement, all who follow are mopping up their mess.

It’s human nature of course, and Gen X and Gen Y are repeating the mistakes, though perhaps the privilege and affluence isn’t quite so evenly distributed – fat cats and their families get fatter it seems. Bankers bailed out to the tune of billions of pounds, and between them now taking bonuses also in the billions. It doesn’t seem right that we ‘privatise the gains and socialise the losses’ to quote the saxophonist/rapper Soweto Kinch.

And to quote him one more time ‘When will I be getting mine’!