The second session of Pension Insight's Pensions Communications Forum looks at how members are approaching their decision-making
Profiling members’ needs and desires: how do different demographics view finance?
Andrew Curry, director, Futures Company
Andrew Curry, director, Futures Company, took a consumer view of member decisions in his address to the audience – examining the demographics in today’s workplace.
“People have a greater need to control and manage risks today, as debt and financial concerns are now a stress to many,” he commented.
“The new workplace generations have new needs and concerns, new financial values, and different ideals in terms of how they want communications to be delivered.”
Curry looked at how the communications game has changed for employers and providers, as they are dealing with a workforce who are “suspicious, angry, financially squeezed and harder to reach – as well as being sceptical of branding.”
He urged the industry to help members re-engage with and believe in their brand: “The pensions industry needs to distinguish itself and have less homogenised vales. This is a shared problem – the industry can work together to get people engaged.”
Creating solutions under the new pension freedoms: what do members want?
Matthew Blakstad, head of member proposition, NEST Corporation
Pre-automatic enrolment, the pensions industry had a somewhat optimistic view of employees’ savings journey, according to Matthew Blakstad, head of member proposition, NEST Corporation.
The reality, he told us, was not active engagement and decision-making – hence the introduction of auto-enrolment.
“Auto-enrolment was designed to start the engagement journey, with defaults that worked for members, phased contributions, minimised volatility and meeting members’ needs through a limited number of choices.”
Of course, the spectrum of choice now much greater – however, members may not have the financial capability, knowledge or advice, to make active decisions.
Blakstad asked what this means for what people want in their income: the regularity and certainty of income traditionally provided by an annuity, but also elements such as potential for pot growth, potential to access some cash – and nothing overly risky in terms of investment choices.
“This is the challenge we now face in helping members. People value short-term flexibility – but they also want long-term certainty.”
Robo-advice: plugging the advice gap for employees
Pete Connell, managing director, Wealth Wizards
Can robo advice work? Pete Connell, managing director, Wealth Wizards today championed the concept, saying it can provide the ‘joined-up’ approach that employers and pension consultants need.
“It is just as robust and controlled as regulated advice, and can give both pre-retirement and at-retirement advice – but is cheaper!” he commented.
From the employee benefits point of view, robo advice can provide a cross-UK, consistent benefit for companies with offices in many locations – as well as giving employers the peace of mind that that some advice has been put in place for employees.
When it comes to the predicted advice capacity crunch, it could also be viewed as a consistent solution to the advice gap.
“Empirical evidence says that advice delivers a better outcome,” said Connell. “But does it have to be face-to-face?”