Emma Douglas from Legal & General Investment Management praises the power of clear communication and positivity when it comes to engaging members with their ‘future opportunity funds’.
Key points
• Focus on the benefit to the pension scheme member
• Use clear, positive and personable language
• Use rules of thumb and examples readers can relate to
As clear as it might be that this style of communication is not what investors want, it is what the financial industry often produces.
The language we use when writing to pension scheme members is important, and can make a significant difference to the degree to which members engage with their retirement savings.
With clear, personable and positive language focusing on the needs of the scheme member, barriers between them and their pension scheme provider can be overcome.
Describe the benefits
Perhaps the single most important point to remember is that any communication should focus on describing the benefits for the reader.
A spade is best called a spade. Not a subterranean excavation implement
This means not writing about what you want to say, but what your audience needs to know. Why? Because a reader who understands what is in it for them is more likely to engage with your business.
Call a spade a spade
Clear, simple language should be used at all times, as it helps make retirement planning accessible to the widest possible audience. We should remember that readers are busy and have other things they could be doing.
It follows that pension scheme managers should do everything they can to make content clear. This means avoiding industry jargon, explaining financial concepts and not using three words when one will do. After all, a spade is best called a spade. Not a subterranean excavation implement.
Use rules of thumb
While there is no ‘one size fits all’ solution for pension investors, talking in rule of thumb terms can be a simple way to relate to your readership and help improve engagement levels.
For example, one of the most frequently asked questions by individuals saving for their retirement is: “How much do I need to save into my pension?” A rule of thumb for this could be to make a percentage contribution equal to half the saver’s age. On this basis, a 30-year-old might decide to contribute 15 per cent of their salary to a pension, including company contributions.
Member communications: How much information is too much?
Many of us find pension information boring, if not overwhelming. The average person may well be stashing letters from their pension scheme away in a drawer for later reading. Read our feature on communication here.
Positive messaging
Writing in a positive tone is more likely to make communications stand out. Rather than always talking about a pension, for example, how about encouraging members to think of it as their ‘future opportunity fund’?
With last year’s introduction of new pension reforms, there is a great deal today’s pension investors have to be positive about. They are no longer restricted to buying a guaranteed regular income in the form of an annuity, and can opt to take retirement savings in cash, or leave them invested and withdraw income as needed.
Communicate with personality
Financial topics do not need to be a cure for insomnia. The key is to inject real personality into communications and talk in terms of concepts that everyone can relate to.
This can make a refreshing change from the traditional format.
By empathising in a personable way about the challenges of saving for retirement and the different calls on one’s time and money, the chances of members engaging positively with their ‘future opportunity fund’ should be far higher.
Emma Douglas is head of defined contribution at Legal & General Investment Management
