• / Free eNewsletters & Magazine
  • / My Account
Home>Research & Insights>Investment Insights>Prince Charles Gets Pensions All Wrong

Related Content

  1. Videos
  2. Articles
  1. Fidelity: Retirement Savers Need More Stocks

    Fidelity's target-date fund series shifts more into equities. Plus, the persistent gender gap in investing, and why wealthier retirees feel poorer.

  2. Bogle: Target-Date Funds Have a Flaw

    The Vanguard founder says many target-date vehicles are underallocated to equities, and investors need to consider combinations of dividends and other retirement income when setting a specific target date.

  3. Key Variables in Your Retirement Withdrawal Plan

    Withdrawal percentage, success rate, asset allocation, and time horizon are important levers in formulating your retirement drawdown plan, says Vanguard's Colleen Jaconetti.

  4. How to Make the Most of Your 401(k)

    In this special presentation, get the answers to key questions about the quality of your plan, whether your savings are on track with your goals, how to allocate assets, and what to do with assets when you leave your job.

Prince Charles Gets Pensions All Wrong

What the prince left out: Save more, work longer. 

John Rekenthaler, 10/18/2013

Out of His Element
On Wednesday, Prince Charles shared his views of investment management. This speech came as something of a surprise, because for the past 65 years the prince has been silent on the subject. Perhaps the occasion of reaching his retirement age has spurred his thinking on the matter. Or perhaps it was a recent report that the average British retiree is on track to have an annual income of GBP 11,400, as opposed to the GBP 25,200 that the public (per a survey) states as its desired amount.

I approached his talk with an open mind. After all, Prince Charles was widely mocked as a reactionary three decades ago when he ventured into architectural criticism, calling this proposed art-gallery expansion a "monstrous carbuncle" on the face of London. Today, however, his architectural views seem far from laughable. One might even call them farsighted.

For example, the prince in 1984 said, "Why can't we have those curves and arches that express feeling in design? What is wrong with them? Why has everything got to be vertical, straight, unbending, only at right angles--and functional?" Thirty years later, that seems spot on. In Chicago, pretty much all the office buildings constructed in the past quarter century incorporate curves and yes, sometimes even arches, as opposed to the boxes built from the 1950s through the 1980s.

The prince's comments on fiduciary duty will not stand a similar test of time. They are, in fact, loopy. Stated Charles, "We live in an increasingly uncertain time. We are facing what could be described as a perfect storm: the combination of pollution and overconsumption of finite natural resources, the very real and accumulating risk of catastrophic climate change, unprecedented levels of financial indebtedness, and a population of 7 billion that is rising fast."

Uh-oh.

He continues, "With an aging population and pension fund liabilities that are therefore stretching out for many decades, surely the current focus on quarterly capitalism is becoming increasingly unfit for purpose.

"There is mounting evidence from the likes of Harvard and London business schools that those companies that improve the way they tackle environmental and social challenges prove to be the ones better able to deliver long-term returns--so you canhave your cake and eat it."

He continued, "I know that old habits die hard and that it is difficult to make the first move, but is there not a case for ensuring your portfolios are resilient in the long term? Could you do so by incorporating sustainability into your mainstream strategy ... ?"

is vice president of research for Morningstar.

blog comments powered by Disqus
Upcoming Events
Conferences
Webinars

©2014 Morningstar Advisor. All right reserved.