We wrote last week about “national derivatives misconceptions week” – a period that started with something scary and ended with an explosion. This reminds me a little of my first experience at the PLSA. It started with doing something scary: going to the PLSA itself (my first industry event). It fortunately ended without an explosion, though given how late I was for work the next day I think it came dangerously close.
I wrote this blog a few weeks ago on the train back from the PLSA in Manchester, after having missed the optimistically early train I planned to take by an embarrassingly wide margin. On waking up a good hour after my intended train was scheduled to leave, I went through several stages of emotion: confusion, disbelief, horror, before finally settling on a sort of mortified trepidation. I was going to be very, very late for work.
Then I received a phone call from a colleague. He had missed the train too. Suddenly I felt a lot better; I was still in the same predicament but I was no longer alone. It is amazing how much comfort and strength can be drawn from sharing a problem with someone else.
This is, I believe, why the PLSA Annual Conference and Exhibition is potentially such a powerful event.
As this annual event hosts the largest gathering of pensions related individuals in the country, it provides the perfect opportunity for trustees, pensions managers and other pensions and investment professionals to come together and discuss issues that affect many in the industry. It also helps foster a sense of togetherness which, whilst not solving the industry’s underlying problems directly, encourages collaboration to try and find the best solutions for everyone. Problems such as the younger generation not saving enough into pensions cannot be solved by any one company or provider. If there is a solution at all, it needs to come from all of us. This was something that came up at the Small Schemes’ Summit in September.
It is also important to remember that sometimes collective behaviour isn’t a good thing. Common misconceptions can become very difficult to overcome due to a general reluctance to stray from widely held views. Working in LDI we have seen this problem with derivatives. Trustees have very good reasons to be “risk averse” (often confused with sticking to the status quo), and it can be challenging to convince them that financial instruments they have seen demonised in the press can actually help reduce risk. Events such as the PLSA annual conference provide a great opportunity to build trust. We have found overwhelmingly that once people are comfortable enough with us to listen with an open mind, it is much easier to help them see derivatives as we do.
I saw indications of the same at the PLSA exhibition.
In the exhibition hall, we wanted to create an open and welcoming space for people to chat and relax. Our stand – a lantern-strung garden pergola, complete with tables and chairs – stuck out like a sore thumb in the sea of cool white corporate stands, but that was kind of the point.
I honestly had no idea what to expect from the conference and exhibition. I thought I’d have to drag people to our stand kicking and screaming. I certainly had my doubts about how willing the delegates and other exhibitors would be to chat, even just casually.
I needn’t have worried.
Although there were a minority who were desperately avoiding eye contact as if I were Medusa herself (don’t worry – I let them pass unscathed), I found that the majority of people would pause (being risk averse) at our stand to look in, interested in what we were doing.
When we invited them to join us, even if just to sample some of the wine, cheese and nibbles, they soon realised that we weren’t so scary after all. And hopefully the conversations we all enjoyed together helped them some way to realise that derivatives aren’t so scary either…