Changes to annuities and ISAs mean businesses have an obligation to communicate them clearly to customers.
It’s the day after the Budget and I’m up in town seeing two of our City clients. After the chancellor’s changes to annuities and ISAs, there’s plenty of talk about how we explain it all to customers. But as a a bit of a financial services old timer, I’m getting a sense of déjà vu.
Sure, the changes are likely to make a big difference to pensioners and savers – a lot more of them. But the industry hasn’t been great at explaining pensions, annuities or ISAs – which are a hell of a lot simpler than most consumers think – in the past. In the bad old days, it was all about maximising income from pension charges, hidden in nefarious things like “capital units”. Who cared if the client didn’t understand? What were they going to do about it? After all, it was only those of us on the inside who had access to the real figures in the Money Marketing tables.
Financial service customers need clear, simple communication
Things are very different now. Consumers have access to tools that, even ten years ago, fund managers would have killed for. They can get information, interpretation and apparently independent advice at the tip of a mouse. Meanwhile, the industry has moved on a little, but really needs to start spinning up its communication turbines and begin educating financial consumers with every single communication they send out. That means three things:
1. Start producing communication that starts where the consumer is, not where the industry is. Ask what the consumer wants to know and tell them clearly and simply. You’re the specialists; use that specialism to guide the consumer.
2. Don’t just give people the basics they need for a transaction, give them context as well as content and they’ll start to see the relevance of products as part of a comprehensive portfolio. Realise that educated consumers are likely to favour the business that educates them.
3. Consumers are interested in money. Very interested indeed; because it’s their security for the future. That means there’s an emotional aspect to financial communication. So if you’re changing rates or Ts and Cs, realise the emotional impact that will have and reflect it in your comms.
Help consumers find the right information, and make it clear when they do.
Consumers will be looking for information, guidance and help with the new products that will inevitably spin out of yesterday’s Budget changes. That’s good news – because it means you’ve got the opportunity to use every communication you produce, from statements to fund updates to administrative material – to really educate and inform. And they’ll love you for it.