Carol Young’s concept of “consumer grade” experience has immediately attracted the attention of those entrusted to assess VFM – the comments on this post include one from Fidelity’s IGC and Trustee Chair – Kim Nash.
This is the key insight. So much of pension communication is considered little more than marketing or compliance.
Comms for comms sake
A “statutory money purchase illustration” that provides projections based on a bunch of assumptions including the saver’s future work pattern, retirement and investment decision making is practically useless. It is an example of “comms”for comms sake, or rather to meet statutory minima.
Let’s not confuse this with “consumer grade experience”. The consumer grade experience is one where a saver wants information , gets it and acts on it. The skill here is to be in the right place at the right time so that the consumer’s inquiry is answered.
Not standing in the way of a legitimate request
Quietroom’s Mark Scantlebury gives as an example , their early work for Halifax during the banking crisis. They had been asked to devise a process that put an end to the hamaerroging of cash withdrawls that was threatening a run on the bank. The failing communication was an attempt to thwart the customer’s request for their money. Quietroom’s innovation was to make the “journey” to the money simple and easy. Paradoxically, when it became clear to savers that Halifax were not standing in the way, a trusted relationship was resumed. Withdrawals reduced as trust increased, the member experience became consumer grade and as this happened – trust was restored.
Speaking with Derek Mulholland about the abuse given to his administrative team who were unable to action the flood of transfer requests arriving throughout 2017, it was clear that it was not the problem had arisen because the statutory right to a transfer had not been communicated by the trustees. Here the user experience had broken down because no-one on the inside had considered that th9se on the outside had lost confidence. By not talking about transfers, they had opened the door for the transfer industry.
In both instances, the legitimate right of people to access their cash was denied. In both instances trust was lost for no good reason, The “end to end experience” must be seen by consumers to be “consumer grade”.
The counter- productive advert
I have written recently of IGC reports where the insights advertised (a VFM assessment) were supplemented by what I referred to as “counter productive adverts where the reader was encouraged to save more or to buy an annuity. These “calls to action”are simply inappropriate within a governance report. People want governance reports without “pop-ups”.
How it should be done
The workplace pensions industry is waking up to the advantages of the consumer quality end to end experience. Pension Bee is an example of an organisation where the member experience is currently running ahead of member outcomes.
Many of my peers consider that the higher charges on Pension Bee funds make their products unsuitable for transfers from workplace pensions. But what they miss is that the money flows to Pension Bee because their communications are backed by consistently happy net promoter scores.
Of course, good service cannot be at the expense of good outcomes, the SJP climbdown on fees and acceptance of a need to move to new funds is an example or that.
Currently, the industry’s reaction to Pension Bee’s success is to make it difficult for consumers to transfer money to it. Throwing red and amber flags at Pension Bee repeats the mistakes made by the Halifax and BPSS. Calls by workplace pensions to pay more to them and use them for decumulation will fall on deaf ears unless the customer’s wishes are satisfied.
But if we can provide the “consumer grade experience”. then many of our wishes will be granted , because consumers know they need to pay more, get value for money and turn their pots to pensions.