These are the unregulated thoughts of seven guys and one gal, having a chat over a Pension Play Pen pint and a pie. Please, don’t construe any of this as any sort of advice. We take no responsibility for what happens if you do.
1. Our fees are opaque
Consumers don’t know how we take our cut. And people don’t trust what they can’t see, or don’t understand. We need a charging structure that is transparent and consistent across the industry. Everyone understands how you pay for plumbers, estate agents and lawyers. But not us.
A universal fee structure. At first there’ll be uproar, as people realise what we cost. But it would allow us to talk honestly about what we do for our money. A lot would come out of the woodwork – but it has to at some point. After the initial shock, relationships would be healthier, adult-to-adult, and more trusting.
2. Our conversations are led by FCA regulation
By following the rules, we end up with communication that has no meaning for consumers. As with fees, it’s a problem of opacity. Consumers already feel we have an unfair advantage, which is compounded by the way we talk about their money. In all areas of life, we’re more inclined to trust people who talk our language.
Put aside all our brand ambitions to be different on this. Together, produce a single set of definitions and ways of talking about products, written in the language of the people we need to explain ourselves to. Take this to the FCA and get it signed off. This would be much more efficient and consumers would be in a better position to make good decisions.
3. Consumers don’t know what questions to ask
With the new at-retirement guidance, we’ll be asking consumers to talk to us a lot more. But there is too much of a gap in people’s knowledge for a good conversation to take place. In the short period of time we have, we can do little more than equip them with a list of questions. This isn’t efficient. It’s frustrating for everyone. They’d get more out of us if they did some homework.
A two-pronged investment in financial education. First, employers should be incentivised and perhaps funded to deliver first class financial education. This is the shortest route from A to B because employees generally trust their employer, and employers know a lot about their employees and have lots of opportunity to talk to them.
Note: we all agreed that auto enrolment was a beacon of success and we should be looking for lessons there.
Second, ignite conversations in pubs, clubs, canteens and front rooms. We need to ‘gamify’ pensions information: pub quizzes, game shows, board games, computer games. This is a good route because people trust their workmates, family and friends. There are some risks of bad advice from self-appointed experts but the upside out weights these.
4. We don’t know what consumers want
We don’t listen hard or smart enough. Mountains of data but not enough insight – or if we do, we don’t follow through on it. Other sectors are skillful at creating a sense of empathy and understanding with customers. Financial brands seem remote by comparison.
Invest in customer research with a determination to really understand the context of finance in consumers’ lives and how they think. This would help us understand the complex reasons why consumers don’t trust us and what we need to do to can change that. Behavioural economics tells us that some of these reasons can seem irrational – they may be qualitative or emotional. But they can be identified, understood and measured. Once we see what needs doing we need to be bold and work together to do things differently.
5. It’s difficult to articulate the value of what we do
People may know the price of advice or of a financial product, but the value can only be measured over time. With almost everything else people buy, the product tangible and understoos and there are guarantees. Financial advice can be good at the time but not deliver value over the long term. It’s a difficult sell and requires trust and some faith. A bit like religion – our pitch is: make sacrifices and your reward (though not guaranteed) will come sometime in the future (often after you’re dead).
We didn’t have one.
Warning: The writer has relied on his memory and may have inadvertently taken a few liberties with what was said.