This article is taken from the August-September 2025 issue of The Critic. To get the full magazine why not subscribe? Right now we’re offering five issues for just £25.
I had always regarded the City livery companies as a harmless way for public school boys who went to red brick universities to share in the pleasure of medieval dining cosplay. In my experience, most chaps who pass through Oxbridge or the Inns of Court grow weary of Latin graces and loyal toasts by the time they reach their mid-twenties. But perhaps these fusty clubs with their silly relics and overcooked beef are not so innocent after all.
I am not a natural conspiracy theorist, but lately I have sensed a sinister plot being hatched by the second-tier finance types who prop up the guilds. And their victims are the honest and thrifty savers of our benighted land.
Let me explain. Broadly, City workers divide into two camps: those who see technology as an opportunity for profit and those who regard it as a threat to their livelihoods. Many a South Bank penthouse has been purchased off the back of some socially useless innovation. (Think spread-betting markets on the likelihood of an alien invasion or Nigel Farage memecoins.) But technology has also improved the lives of ordinary investors.
US fund giants such as Vanguard and BlackRock have become the Amazons of finance who use their global scale to improve transparency and cut charges. Some reports suggest the average fees paid on investment funds has halved in the past decade. It is an unalloyed good thing that more of the wealth created by businesses goes directly into people’s pensions and rainy-day savings pots.
But this fee compression has been a grave threat to the City middlemen — the financial advisers, sell-side analysts and active fund managers — who traditionally relied on a cut of those dividends and capital gains. And over the past few years, the double-breasted double-chin brigade has been mounting a vigorous counterattack.
ESG funds were their first wheeze (though to be fair the US giants were at it, too). Virtue signalling commands higher fees, creates an industry of analysts and salespeople and — it turns out — delivers sub-par returns.
As the world has turned darker and more autarchic, the City’s fee farmers hit on a new wheeze — buying British.
Last year lobbyists persuaded the then Chancellor, Jeremy Hunt, to introduce a UK ISA — an extra £5,000 tax-free allowance for investments in London-listed stocks. It was never clear how the biotech entrepreneurs of Cambridge or the precision engineers of Birmingham would have benefitted.
The only certainty was the big winners would have been the “Old City” who hoped to see money siphoned from the low-fee global platforms into their own expensive and underperforming products focused on British mid-cap stocks. It was a financial services version of Rishi Sunak’s wasteful “Eat out to save Pret” initiative. In her first Budget, Rachel Reeves wisely pressed pause on the scheme.
But now the livery guys are back, and this time they are coming after our pensions. One of my boards recently received a missive from the Lord Mayor of London, The Right Honourable Alastair King (Oundle, University of Kent and the former Prime Warden of the Worshipful Company of Blacksmiths).
Livery companies began as trade monopolies designed to protect the City’s vested interests
He was urging us to sign up to a pledge to get our pension fund to invest in more British infrastructure and micro-stocks on the AIM junior market.
I still remember my father talking fondly of the pride he felt investing in war bonds. And for a moment, I was about to urge my fellow directors to make the patriotic choice. Then I spotted this line in the Lord Mayor’s letter which gave the game away: “The pensions industry has for a long time focused on reduction of cost when selecting a pension provider; this is not an optimal approach to maximise retirement outcomes.”
It was a throwaway line, but it looked very like a plea for us to commit more of our workers’ hard-earned savings to the middlemen and opaque consultancy services. What’s more worrying is that this time the City establishment seems to have the support of the Labour government.
In an uncertain world, the only duty of corporate pension fund trustees is this: to do their level best to ensure the employees of their business can enjoy the most comfortable retirement possible.
If that means buying Las Vegas casinos or Caspian Sea gas fields, then so be it. Pension funds do not exist to be the chaff of round-robin letters of berobed aldermen.
Ornate rituals and hammer-beamed dining halls disguise the hard-edged origins of livery companies as trade monopolies designed to protect the City’s vested interests.
My pals who like to slurp from the loving cup will disagree, but I believe these instincts remain — and the rest of us need to be vigilant.
