Keep things simple to quickly engage consumers with their personal finances
Jul 1, 2022 11:11:26 AM
EVDirect is powering ahead in the drive to help pensions and workplace benefits providers inspire and support employees’ financial wellness. This blog looks at how you can deploy an array of easy-to-understand Quick Tools that quickly engage consumers with their investment and pension provisions.
It can be as simple as presenting them with some pertinent questions that tick their curiosity button, kick-starting engagement and allowing individuals to take more control of the financial decisions on which their future financial prospects depend.
Study the attitudes towards personal finances among any representative group of the general population, and you’re likely to discover a stark spectrum of interest in the topic – ranging from high financial awareness and commitment to plan for the future right across to not bothered/switched-off/in denial that this matters at present. Tools that quickly engage the audience on both the importance of the topic and the quick steps they can take to start making a real impact on their future finances will appeal to both groups.
In the workplace, such variations in individuals’ approaches to life undoubtedly proliferate too. This poses a problem for those providers keen to nudge people to take a more active role in building their future financial security as a key aspect of promoting financial wellness among employees.
What motivates people to see beyond today’s needs and desires?
Sociologists define “deferred gratification” as resisting the impulse to take an immediately available reward in the hope of obtaining a more valuable reward in the future. Saving for the future rather than splurging on holidays, a larger TV, or new additions to the wardrobe is a simple expression of this concept.
Motivating unadvised people to put sufficient money aside for a comfortable retirement is harder to achieve. There’s an element of irony, as younger folk may be more likely to put off investing when confronted by competing and pressing demands on their purchasing power. They would benefit most long-term from investing as early as possible for later years’ security.
Finally, it doesn’t help when there’s a notable lack of guidance on these matters aimed specifically at unadvised people. The general absence of encouragement to act more strategically with money pops up often in the media, sometimes by somewhat exasperated sages.
In answer to this puzzle, pensions and benefits providers – to promote financial wellness – will sensibly be thinking along the lines of giving strong nudges to their end customers to wake up and smell the cappuccino, taking control of their future before it’s too late. The natural impulse might be to plug all cash flow planning and other financial projection tools to spur positive action. However, if we put ourselves in these employees’ shoes, another concept rears its head: counterproductiveness. Being presented with such data-driven tools with little preamble can be overwhelming and put people off, especially if they’re not in the right mindset to deal with ‘the future’.
Starter questions whet the appetite before the main course
A smarter approach is to start the process with a taster, triggering an appetite to engage with the issues. Simple tools are available from EVDirect to pose a number of basic questions designed to get people interested in taking control of their financial futures. Just as schooling doesn’t start with A-Levels, financial education for many is best started with a gentle incline, not a deluge of complexity
EVDirect QuickTools can be set up to pose deliberately simplistic yet leading questions, such as:
What lifestyle could I afford when I retire?
What expenses will I need to cover in retirement?
What small changes can I make to increase my pension contributions?
What’s the impact on my comfort in retirement if I invest just 1% more?
What a difference a percentage point makes
With their curiosity piqued, the user is then led to enter a few bits of information that the tool quickly crunches to provide a straightforward, personalised answer founded on realistic expectations. The goal is to inspire people to opt into making positive retirement decisions. And this can be quite easy to digest, such as learning that just reallocating some part of non-essential everyday spending towards pension contributions can significantly improve the quality of life when entering retirement.
With engaging front ends, QuickTools asks for minimal data from the user, which is easily found. This entrée into the financial wellness journey would be as complex as many without a gentle curiosity-invoking introduction. The QuickTools are educational and add value to users. They can support providers’ targeted campaigns with a call to action provoked by messages focusing on the benefits of contributing more to pensions.