Peter Nicholas explains how communication is like investment; if it stops working, change it.
This is more of a "rant" than a "blog". When are we going to stop wasting money on communicating to people about their retirement savings? Millions of workers in this country are not saving enough to provide for the retirement lifestyle they want.
Yet millions of pounds are being wasted every year, without measurement, on communication that is simply ineffective.
Don't get me wrong, great communication is essential to drive good member outcomes, but as Lewis Carol famously wrote, "If you don't know where you're going, any road will get you there".
This is equally true of member communication. It is inconceivable that a pension scheme would not have well-articulated investment philosophy, policy and objectives. Why, then, is the same not mandatory for member communication?
Put simply, investment performance delivers scheme performance, member communication delivers member outcomes.
It is unthinkable to not measure investment performance so why would you not measure communications performance?
If it is working, congratulations, your members will be better prepared for their retirement.
If it's not working, make sure you understand why and, just like investment, if necessary make changes.
Without measurement millions of pounds can be wasted on a whim.
Communication is a fundamental scheme governance activity. Yet how many trustee boards have their communications advisor sitting at the table?
Typically the legal adviser, the administrator, the actuary and the investment advisor are included in the governance team, but who's responsible for managing the messaging to members?
Of course each scheme has a choice on where it stands on communication. This ranges from simple regulatory compliance, which ensures that the trustees are ok, to best practice - supporting the member in making informed decisions so they are better off.
Today members have greater control of their own private pension savings than ever before and yet few fully understand the consequences of these freedoms.
In some ways it's like leaving babies with razor blades.
The importance of good communication to connect with members and support their retirement choices has never been greater.
Communication that doesn't do this is a waste!
Rant over.
Peter Nicholas,Managing Director/CEO, AHC.
