I’ve been struck over the past few days by just how little help with pensions people seem to be getting.
I don’t mean by this the traditional financial planning messages (save hard, save early) but help with working out what they’ve got coming to them and how best to manage their post-retirement affairs.
If the members of BSPS, USS and NHS have to turn to social media to get their questions answered then what are the expensive helplines provided by administrators, consultants and in-house team actually doing?
TPAS used to work to an acronym “Assist, guide and equip” (AGE). The idea was to be helpful without telling people what to do. People would generally come to their conclusions but need assistance , guidance and the equipment to make decisions.
In practice, AGE is precisely the sales process that I was first taught at Hambro Life. BAck in the day, a salesman who bullied his clients into actions soon saw the business come off the books, the people who succeeded had low lapse ratios because clients found the top salespeople helpful.
Today, an organisation’s effectiveness is measured by Net Promoter Scores and other customer satisfaction metrics (like Trustpilot). The theory and practice are aligned, positive results follow helpfulness.
The opposite is also true. The BSPS disaster was largely a result of BSPS members not being able to get the help they needed to understand the value of their scheme – a sales failure on behalf of the trustees.
Similarly, USS Trustees lost the plot when they weren’t transparent with their members about the sustainability of the USS scheme. Members felt bullied by their trustees and employers and they couldn’t get the help they needed.
The noise on twitter and elsewhere among NHS pension scheme members, especially those with tax and contribution problems is a protest at the unhelpfulness of the tax authorities and a lack of appreciation for the benefits of their scheme.
The trustees of large occupational schemes have a duty to help people to understand the choices that the scheme offers so they can decide on “the hokey”, cash commutation and organised their affairs to minimise tax and maximise the utility of the pension for them,
How many pension schemes or pension providers target helpfulness as a key metric?
Financial education and wellbeing?
I am concerned that the words “education” and “well-being” are being used as a substitute to giving straight answers to straight questions While helping staff to understand debt and to work out how to read a payslip are valuable in their own right, they do not assist , guide and equip people to take smart decisions on pensions.
All too often , financial wellbeing courses are being commissioned to provide people with a platform with which to take complicated pension decisions. But people often don’t have time to be re-educated – they want to know the questions they should ask and then they want specific answers to those questions.
Agility is key.
The importance of closing
The simple business of managing an inquiry through to customer satisfaction is of course a sales process. Timely reminders nudging people to take affirmative action is also a sales process. Possibly the most important question in a meeting is the closing question “was that helpful?”, “does that give you what you need to take a decision?” and so on.
This is where much financial education/wellness stuff hits the rocks. There is no one answering the closing question!
If we are agreed that AGE is the sales process, then we have to find a way to measure helpfulness in the same way that we measured commission or fee income. There has to be a way to measure how helpful trustees are being and it’s got to be a measure based on member understanding.
That means asking the closing question and recording the answer with integrity.
A new resource is emerging
Whether through blogs, through the ratiocination of twitter or through Q&A on Facebook, people are putting themselves forward as being able to help.
We have yet to find a way to convert this help into personal remuneration. But it seems inevitable that the informal mechanisms that are springing up to provide help will become formal mechanisms in the future.
So the work put in by advisers like Al Rush, Dave Penny and Al Cunningham (on the NHS thread) is not wasted.
The most influential people in getting people help are the mavens that bring people together from within the organisations. At BSPS it included Stefan Zait, Rich Caddy and David Neilly. At USS Mike Orzag, Sam Marsh and Dennis Leech. The NHS is getting its own mavens – Nitin Arora will be one of them.
And of course contrarians like John Ralfe are important to healthy debate.
The Unions have been slow to pick up on this new way of providing “help” as have trustees and employers. But that does not mean that they cannot embrace it.
Harnessing this resource
Al Rush’s work on Chive shows that a bottom up approach can work (it worked at BSPS), but it is harder to sustain this approach and extend it to a wider audience. Would USS members have benefited from Chive during its strike – probably not – the debate was about pension funding levels. Could Chive help the NHS members, very probably as the tax- work is clearly within IFA competence.
IFAs have a critical part to play in offering help, but we need other professionals with differing skill-sets, working to a common aim.
I have yet to fully figure how the goodwill of the disparate crowd of financial experts can be brought together for the good of all. There needs to be some commerciality in the project.
But I am quite sure that the concept of being helpful – which is the most positive aspect of social media, can become a way to alleviate the immutable hardness of pensions.