A year ago I applied to join Mike Harris, founder and CEO of FirstDirect, CEO of Mercury Communications and founder and CEO of Egg plc, on his mentoring programme IconicShift. On the programme Mike teaches entrepreneurs how to turn a dream into a purpose by declaring that we will be accountable for bringing something different into existence. Below I share my application letter to Mike and my 100 year dream – “What if all people feel confident about their financial future?”
“Dear Mike –
Thank you for your time last week. I am co-Chief Executive of Redington (www.redington.co.uk), we advise large final salary pension funds around the world and are known for leaving our clients feeling in control of their assets and liabilities.
I wanted to share my vision for Redington by sending you an article written in the future, in the Financial Times on 16th May 2106 recording the growth, success and key milestones of Redington over the previous 100 years.
I look forward to hearing from you and becoming part of your Game Changers 2013.
Financial Times – 16th May 2106
Redington, the UK’s largest company by market capitalisation and the third largest company in the world, today celebrates its centenary after transforming first the pensions industry and then the fortunes of countless charities, insurance companies, family offices and sovereign wealth funds. But perhaps its biggest contribution to society has been RedStart, a groundbreaking programme that offered free financial education to young people all across the world.
It seems impossible to contemplate now, but before Redington’s inception in 2006, the pensions industry was in crisis. A combination of low interest rates, high inflation, increasing life expectancy and the most challenging economic climate for a century had devastated final salary funds. Most schemes were closed to new entrants; many were facing a scenario where they would no longer be able to pay their pensioners. Some were even threatened with insolvency. The industry was dominated by staid thinking and out-of-date assumptions. But Redington’s founders, Robert Gardner and Dawid Konotey-Ahulu, saw a smarter way to do things, a simple yet radical approach to putting pension funds in control of their future.
Gardner and Konotey-Ahulu used capital markets approaches they’d learned in investment banking, first to manage pension funds’ risk, and then to deliver stable, sustainable investment returns. This was something they’d done every day in investment banking, but it was brand new to pension funds. Gardner and Konotey-Ahulu were told their methods were untested and too complex for lay trustees to understand. But with a mixture of discipline, rigour and a healthy dose of pragmatism, they got results quickly. Within a few years, their first clients were better off – in one notable case, by several hundred million pounds.
The company consolidated its thinking into a Seven Step Framework that became world famous. People that had doubted Redington began to listen. Before long, they were applying the same ideas to other sectors, including charities, family offices and sovereign wealth funds. Redington had turned conventional thinking on its head. They had done for pensions what Apple did for consumer electronics: change the game.
In 2012, the business shifted gears again. The catalyst was a meeting between Robert Gardner and Mike Harris, an iconic entrepreneur who at the time was helping Prime Minister David Cameron build an entrepreneurial legacy. Harris and Cameron wanted to inspire a generation of entrepreneurs, building on the success of the London 2012 Olympics. Rob joined Mike, Alistair Lukies, Clive Woodward, and Lord Young as part of Business Team GB.
Rob’s vision was to provide free financial education to people under 25, starting in the UK before moving on to the rest of the world. At the time, 43% of people in the UK had never received any financial education. The prevailing savings ratio was at a 50-year low of 1%. The least engaged community was ‘Generation Y’, those people born between 1980 and 1995. They only made up 10% of the working population in 2012, but Redington knew that by 2025, this would be 75%. American economist Alan Greenspan called this a “demographic abyss for which there [was] no precedent.” With a structural shift towards defined contribution pensions via the Government’s automatic enrolment initiative, something had to change.
Inspired by former NFL player Alan Autry, who said that “leadership requires the courage to make decisions that will benefit the next generation”, Rob and his latest graduate hires, Freddie Ewer and Jonathan Letham, conceived RedStart, a programme to engage young people at grassroots level. It started with a core belief: that when people are knowledgeable and confident about their personal financial decisions, their personal wealth will grow, and the economy will prosper as a result.
RedStart started in one school in the London Borough of Newham. But like every great idea, it spread like wildfire. Boris Johnson’s support was critical. The then Mayor of London believed that equal access to financial education made the whole community stronger. He asked Redington to scale their idea, first to Islington, then to the rest of London, and before long to the whole of the UK. Redington did this by wrapping RedStart into their Corporate Social Responsibility and personal development programmes. They encouraged partners such as Axa Wealth, BlackRock, and PensionsFirst to do the same.
They quickly reached critical mass. Teachers and businesses began working together to make sure that every school could offer RedStart to students and young people in their communities. By 2020, over 5 million people had been engaged and educated on the core pillars of financial education, the discipline of saving and the power of investing. RedStart has had a far-reaching and long lasting impact on our society’s financial wellbeing. It’s something we take for granted now: that individuals and institutions should feel in control of their financial future. It’s easy to forget that it wasn’t always the case. The seeds of change were planted one hundred years ago. A business that had already transformed one industry saw an opportunity to change the game again – and seized it.