I had the good fortune to edit the magazine for 25 years, having joined as a staff writer in 1978. I previously worked for three unit-linked life companies and a national firm of independent financial advisers, so I knew the operations and technical policy details of the very subjects about which MM was writing. I became editor in 1986, retiring on the 50th anniversary of the magazine in 2012.
It was the perfect time for a magazine like MM, because it was quite simply unique. Although there was another monthly personal finance publication in print at the time, the investment put into MM by the Financial Times gave it a huge advantage over the competition.
The early days
During the 1970s the UK was in turmoil, and there was precious little regulation governing the way that life insurance and pensions were sold. Charges were very high and in the main extremely well hidden, which meant a lot of people got very poor value for money. Almost all life and pension policies had commission built into the pricing model – whether purchased through a direct sales force, direct from the company, or a broker, and there was no way of avoiding it.
MM started to produce surveys of life and pension policy charges and results in the 1970s. At first they were rather basic and relied entirely on the goodwill of the insurance companies to supply us with figures. But in the 1980s I began to realise that some companies were manipulating figures. So I started to get tough with them.
One well-known life firm, for example, had been providing results for its with profits endowment policies with a maturity date of March 1 – its annual bonus declaration date – even though the survey date was February 1, so its figures were not actual results but projections. In a time of steeply rising bonuses, this put it squarely in the top 10. I challenged this as unfair on competitors and policyholders but the business refused to supply February 1 figures.
So the next time the annual survey was conducted I decided to backdate by one year all its results over the previous 10 years, because technically those were actual results available in February; suddenly the company was no longer top 10. It was furious and threatened all sorts of dire consequences, but I wouldn’t back down. The firm subsequently altered its bonus declaration date to February 1 and it was back in the top performers, although not so high up the rankings!
The next step was to guarantee our surveys would include every company whose policies could be bought by the public, no matter what the source. If companies refused to provide projections of future values, I simply hired an actuary to work them out, with a suitable footnote! Usually, these companies didn’t want to take part in surveys because they knew they would compare badly, and this turned out always to be the case. Guaranteeing 100 per cent participation proved to be revolutionary, as MM figures started to appear in advertisements as well.
A run-in with the regulator
With this ongoing innovation, MM surveys became more and more powerful. Back then we had special software developed that allowed our tables to be endlessly sorted – in quartiles, top 10s, bottom 10s, and so forth. All this was really hard work, but it paid off handsomely.
Projections of future values were another matter, however. At the time the then regulator suddenly decided that charges were far less important than actual performance, so decreed that the insurance firms used a standard set of charges, laid down by the regulator, for all its illustrations. Utter madness! The law of unintended consequences meant that companies could charge whatever they liked, protected from the truth in illustrations by the regulator’s low-charging basis.
I completely disagreed with this stance. After all, although high charges are less important when performance is good, if performance is poor the charges really eat into returns.
I carried on publishing tables of projections based on each company’s individual charges, which at one point proved that every single personal pension plan had higher charges than the regulator’s prescribed basis, proving that MM’s stance was right.
The regulator called me into its offices for a ‘little chat’. It demanded that I stop printing own charges surveys because they didn’t follow the official line. I replied saying it couldn’t tell me what I could and couldn’t print and refused to comply. The regulator responded by telling me that it would ban the insurance companies from producing the figures for me. I countered by saying that I would simply hire an actuary to work them out. A few months later the regulator dropped its prescribed standard charges for illustrations, and common sense prevailed once more. A win for MM.
How much is too much?
By the 1990s, because of inflation and increasing wealth, the levels of contribution and premiums for our surveys kept on changing. This meant, however, that it was difficult to compare one year with another.
I took the decision to try to ‘future proof’ the surveys by greatly increasing the premium levels in the hope that they would stand the test of time. The personal pension levels were fixed at £200 per month and £10,000 lump sum and £50pm for with profits endowment. That decision was greeted with protests from readers, who said no one paid that level of contribution – largely true at the time. But the decision turned out to be exactly right as it was used to the end.
The regulator, anxious to make policy comparisons more readily available and understandable to the public, decided to introduce a standard level of premiums for all projections from the life companies and, because MM had a huge database of past information, decreed that all companies use the MM basis of premium and contribution levels for their illustrations. Another big win for MM, which became known as the industry bible.
As MM surveys gained more and more authority and influence, our findings were often featured in the national press, and I was often invited to appear on radio and television programmes, both live and recorded, chair conferences and also address them.
Rewarding
We introduced the fantastically successful Financial Planner of the Year Awards in 1996. The first ceremony was a fairly low-key event, held in the Café Royal in Regent Street. The event was filmed for a BBC Panorama programme about financial advice, and thankfully it showed MM and the award winners to be ‘the good guys’.
The awards went from strength to strength, showcasing the professionalism of IFAs. At its height, the event hosted 350 guests at the Dorchester ballroom and became known as the financial services event of the year. It all helped to boost MM’s standing in the profession.
Because of the in-depth, accurate and comprehensive nature of our surveys the magazine won many industry awards for journalism – more than 50, to be precise. At its zenith, MM sold as many copies as its main competitor was distributing for free – 28,000 a month.
MM was unique in that the majority of our features were written by our own journalists. We did all our own research and compiled our own tables. In that way we were able to analyse and comment, without fear or favour, on individual companies and practices in a way that was not possible in articles from contributors. As a monthly, we couldn’t compete on time, so we offered unique research and analysis unrivalled by any other publication.
The fund statistics were fairly basic in the early days, but together with Micropal we compiled statistics providing actual cash-in values after selected periods, and other information that was not available anywhere else at the price. They were unique up to the end.
In 2007 I was honoured to be appointed OBE in the Queen’s birthday honours for services to personal financial journalism and financial services. It was a vindication of everything I had fought for – and against – over the years.
The end of an era
MM has enjoyed a really loyal reader base throughout its long and distinguished history. They, like me, will be sorry to see it go.
The personal finance sector, especially independent advice, is now on a much stronger, professional footing than when the magazine started out, and I’m proud that MM played such an influential part in its development. It will be very sadly missed.
Janet Walford OBE was editor of Money Management from 1986 to 2012
