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What if you made some great financial reforms and nobody knew? Or cared? Or understood? Making sure customers, clients and members know what recent changes in superannuation and financial advice regulation mean to them in practice is an important first step to boosting financial engagement among Australian consumers.
Depending on how prepared you are for the new Stronger Super and Future of Financial Advice (FoFA) reforms, you will have greeted D-Day, 1 July 2013, with confidence or trepidation. Or perhaps a mixture of both.
Much has been written about the aim of the reforms, namely to improve clarity around superannuation and financial advice for consumers. However, there is no doubt that success will ultimately be judged by whether the reforms foster increased engagement with financial matters among everyday Australians.
Those of us working in financial services have been reading and writing about the reforms more or less constantly for the past two years, so they feel quite familiar. However, whenever I happen to mention ‘Stronger Super’ or ‘FoFA’ in conversations with friends not closely connected with the financial services industry, it never ceases to amaze me how little awareness there is of the biggest reforms to ever hit the industry – and which affect ordinary people every bit as much as the ‘big end of town’.
This really begs the big question: has enough been done to communicate with consumers about the reforms and what they mean in practice? Because anyone working with consumer customers has a responsibility to make sure that they’re in the loop.
There is certainly no shortage of media articles, opinion pieces and commentary on the topic. Perhaps the message isn’t getting across because it can seem difficult to understand and its relevance to ordinary people is not made clear enough, so they disengage?
It’s true that many in financial services and wealth management find it difficult to convey information in an easily digestible form. Too often the real import – the ‘what does it mean to me’ aspects of the information concerned – is lost in translation.
If our ultimate aim is to increase engagement by all Australians in their super and financial futures, better and clearer communication is the vital first step. If, through clear communication, we can improve understanding of investment fundamentals, then engagement will follow, as investors start to understand the effect of the financial decisions they make on their lives – and thus that all-important ‘what does it mean to me’.
However, getting consumers to actively engage is no easy task, especially when the messages are complex.
So it’s important to go back to basics and remember the five fundamentals of effective communication. Keep it:
- Clear and transparent. Your point should be obvious.
- Short and sweet. Appeal to short attention spans. Don’t make it hard work.
- Relevant. Remember who you’re speaking to, what’s important to them and what they need and/or want to know. In general, this means your message is not about you.
- Frequent and consistent. Most people need to hear a message several times before it starts to sink in. So tell them once. Then tell them again. And again. And again.
- Open. The aim is to engage consumers, so be open to two-way communication. Provide opportunities for feedback or questions. And remember, different people have different preferences for consuming information so try different channels: online, in print, in social media and so on. And don’t forget the power of good old-fashioned face-to-face.
In the end, the fact that financial or investment information can be more complex than other kinds shouldn’t mean that you either fear giving it, or give up trying to make your communication clear.
It is entirely possible to make investment fundamentals understandable and accessible. If you focus on the above fundamentals, you’re off to a good start.
