So it was understandable the industry reacted with shock when he announced he would be leaving – not only leaving Hargreaves, but financial services altogether – going to join an electric bike company, Pure Electric, where he will do public affairs, something his role as head of policy has very much become.
In truth, it was not such a leap: the owner of Pure, Adam Norris, is a former director at Hargreaves Lansdown; a former professional cyclist, he also recruited Mr McPhail to Hargreaves.
So why the move? “I enjoy cycling and climbing, like a lot of people I’m mindful of the environmental issues. I saw an electric scooter and I was blown away by this. I loved being able to arrive at work not all sweaty,” he says.
One of Mr McPhail’s main skills has been to combine his PR skills, developing his relationship with journalists, with his lobbying skills.
He recently obtained a diploma in public affairs, but really got the lobbying bug when he was asked to join the campaign for the Open Market Option – the push to make it easier for people to shop around for an annuity.
He says: “It introduced me to the world of changing the rules – discovering that you can make a difference, you can change the rules if you find the right buttons to press.
“That has been really enjoyable for me, and the relationship between politicians and media has been interesting. We see politicians – Boris Johnson and Michael Gove – that have been in politics and the media, and the relationship between the two is very powerful.”
I think pension freedoms was one of the boldest and most reckless policy decisions ever made – with no consultation or discussionFor many operating in the media, he has also been a useful commentator about government policy, especially in pensions, offering insights to policy interventions with varying degrees of controversy.
Perhaps the most controversial topic has been the initiative to release people from the necessity of buying an annuity when they come to retire, known to everyone in financial services as pension freedoms.
While this was radical in its approach, and entirely unexpected, many have argued that the rush to push it through – it was given 13 months for launch – and the absence of any consultation, is likely to have caused many of the problems that have since arisen, such as vulnerable people losing valuable pensions to scam artists.
Mr McPhail is in agreement with this. He says: “I think pension freedoms was one of the boldest and most reckless policy decisions ever made – with no consultation or discussion, [George Osborne] just lobbed a grenade.
“I still can’t say it was a bad thing because the annuity market was in a bad place.
“People are in a defined contribution world, they do need to take control of their own retirement savings. The big problem is that people are ill-equipped to do that and that’s why the Financial Conduct Authority has stepped in and said, ‘We need more consumer protection’.”
Policy timing
For many Hargreaves Lansdown clients, pension freedoms was a good thing, but they are not necessarily representative.
We have to remember, he says, the time when it was launched. “It was 2014, we were coming out of a period of really difficult public spending discussions, we had an election looming, and the Conservative party had low confidence about winning the election. This was a masterstroke of low politics.”
“People in the FCA were pretty irked about this at the time and were not happy about having to deal with this in a short period of time.”
In fact, Mr McPhail, despite this and the criticisms politicians get in the press, is fairly admiring of politicians, especially those that were involved with auto-enrolment, and thinks there are many unsung heroes: Richard Harrington and Stephen Timms both did good work, as well as the well-known Steve Webb. Ros Altmann, he felt, made a “mis-step” going into government as she never felt comfortable there.
“There have been some really good people working in pensions, and it’s always difficult because of the tension between the Department for Work and Pensions and the Treasury, because of the demands and priorities of these departments.”
Auto-enrolment
One of the biggest success stories he has seen is auto-enrolment, from start to finish – from the groundbreaking Turner Commission (started in 2002) to the officials and politicians who brought it over the line in 2012.
It has increased people’s engagement with their pensions, and the arrival of the pensions dashboard will further help, says Mr McPhail, but the system does not go far enough.
He says: “There’s a fundamental disconnect between ownership of the pension pot and the way the system works: if you want your employers’ pension contributions, you have to join your employers’ pension scheme.”
He would rather see a system whereby individuals completely owned their own pension, and have employer contributions paid into it.
“I’m sad I haven’t been able to make more progress with that; I’ve had politicians say, ‘We would like to do that’.”
Looking ahead
Mr McPhail has been with Hargreaves Lansdown for 18 years, starting as head of research, before being made head of retirement policy then head of policy. Will it be a wrench for him to leave?
“I’m actually quite relaxed. I’ve been working in financial services for 35 years; all the people I’ve met and the knowledge I’ve built up, it does feel weird walking away from that.”
He is already working on preparing information for a Department of Transport consultation, as there are various deadlines looming. His last day at Hargreaves Lansdown is June 1, and he starts at Pure the next day.
He says: “I’m really enjoying exploring this world I’m going into, talking to people about cycling policy; I’m quite excited about the future, rather than looking back.”
Melanie Tringham is features editor of Financial Adviser and FTAdviser
