When Virgin Money arrived on the scene in 1995 it was like a breath of fresh air offering simplicity in a world of complexity.
For a single 1 per cent annual management fee investors could buy a share in the stock market.
Direct contact for consumers via a friendly call centre made it an instant hit. Not surprisingly it was despised by many fund managers and financial advisers who queued up to drip poisonous comments into the ears of any journalist prepared to listen.
Its launch triggered years of debate about index trackers versus active management.
This pricing debate has been resurrected many times over the past two decades.
The Lang Cat has now highlighted that the 1 per cent charge makes it makes it 354 per cent more expensive than Vanguard’s Lifestyle range, which is priced at 0.22 per cent.
Even in 1995, some argued it was expensive for an index tracker. But that was not such a sticking point then, when Virgin’s name was able to crack open an investment market that had hitherto proved impenetrable to many potential investors.
More than 22 years on the facts speak for themselves, with index trackers now an established investment option.
Companies such as Fidelity and M&G, who once disparaged trackers, now offer them.
Fund charges are more transparent and more people are comfortable choosing the stock market.
In short, the world has moved on – except in the headquarters of Virgin Money where the executives still consider a 1 per cent annual charge on a tracker defensible.
Perhaps this is one reason why it sits at 235 out 273 funds in the UK All Companies sector and why its performance lags behind that of competitors.
Virgin’s defence seems to be that 1 per cent is the only fee investors pay, whereas to gain access to other trackers it can be necessary to pay platform charges or other fees.
Yet even considering these, Virgin is still expensive.
So a once sparkling, innovative company that sought to offer accessibility and value to small investors, has become a lazy, money-making machine delivering poorer performance and levying higher charges than they could get elsewhere.
In fact, it has become precisely the type of organisation it sought to oust.
Cut your fees Virgin and bring some pep back to investors.
DWP revolving door
I had a quick look on the gov.uk website to check the list of pensions ministers.
The secretary of state role at the Department for Work and Pensions (DWP) has now becoming a similar revolving door.
From May 2010 until March 2016 we had stability with Iain Duncan Smith. But since then we’ve had Stephen Crabb, Damian Green, David Gauke and now Esther McVey.
The Tories used to treat the DWP role as one needing stability. Peter Lilley held it for five years from 1992 and Norman Fowler for six years from 1981.
But now they are showing a similar contempt to Labour, which had 10 secretaries of state between 1997 and 2010, and an incalculable number of pension ministers.
It is incomprehensible for a department with such a potential impact on future spending and prosperity.
On the plus side, we now have a state-educated woman in the role. So I wish former children’s TV presenter Esther McVey well. Her experience of speaking to five-year-olds should come in handy when trying to explain the importance of pensions to some of her cabinet colleagues.
Prenuptial agreements
City trader Julie Arnold saw her spouse walk off with half her £5.45m fortune, even though they had no children, had been married just four years and he had an affair. Evidence, surely, that cheats can win.
I have seen suggestions that this case underlines the need for prenuptial agreements.
But these have no official legal standing in England and Wales, even though they can carry evidential weight in court.
In Scotland, the oldest marriage contract dates to 1281, and they have been common since the 14th century. As long as they are fair and reasonable at the time they were signed they are regarded as legally binding – though it seems they have never been tested in court.
Surely a change in the law south of the border is needed to bring England and Wales in line with trendsetting Scots.
Tony Hazell writes for the Daily Mail's Money Mail section
