From the blog: Financial services is the least trusted industry of all. Those responsible for running pensions should think about what this means – and what it explains.
Research on trust in different industries around the world found a correlation between distrust of financial services and the issues the pensions industry is facing, such as:
frustratingly low levels of engagement, despite expenditure on communication and education;
individuals persistently refusing to join pension schemes, despite tax concessions and employers’ willingness to contribute;
the need to auto-enrol millions of people into pensions, despite saving for old age being a sound idea.
3 actions to build trust
Evaluate the management of your scheme against the attributes mentioned here.
Assume those who have been auto-enrolled will opt out sooner or later, for one reason or another, unless their hearts and minds are won.
Do your best to highlight the importance of transparency and trust through the professional bodies, institutes and associations in the pensions and investments space.
PR company Edelman researches the levels of trust in different industries around the world.
It found a correlation between the low levels of trust in financial services and the issues the pensions industry is facing, such as:
frustratingly low levels of engagement, despite expenditure on communication and education;
individuals persistently refusing to join pension schemes, despite tax concessions and employers’ willingness to contribute;
the need to auto-enrol millions of people into pensions, despite saving for old age being a sound idea.
Financial services the least trusted industry globally…
Source: Edelman
I believe in auto-enrolment, but only because we are where we are – the situation would have been far better if the millions being auto-enrolled into pensions had instead weighed up their options and chosen to join a scheme.
But lack of trust in financial services prevented this from happening.
Also, let’s not kid ourselves: we have not won the hearts and minds of those who have been auto-enrolled, so we should expect opt-out rates to rise with contribution levels. People are dancing to our tune because we are pulling the strings, but they can break free of those strings whenever they want.
Our industry’s predisposition to self-harm has caused reputational damage that it will take a generation to recover from
The pensions minister is absolutely right in asserting that we must not get complacent.
Our industry’s predisposition to self-harm has caused reputational damage that it will take a generation to recover from.
To have any chance of regaining the public’s confidence we must first earn their trust, so it’s worth considering what behaviours can enhance trust.
Andy Agathangelou is founding chair of the Chartered Institute of Payroll Professionals' Friends of Automatic Enrolment and founding chair of Friends of the Association of Member Nominated Trustees
