How well do master trusts know their members?

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Master trusts are the future for many UK pension savers. Assets held by master trusts are expected to grow from £12 billion in 2016 to £306 billion in 2026, accounting for 61% of the trust-based market [1]. The pressure is on master trusts to get it right by providing support and encouragement to members by helping them to save and make active informed decisions. This means continual investment and for trustees and providers to get to know their members’ better, understand their needs and drive better outcomes. 

The Pensions Regulator has raised the bar for master trusts – and it’s not just about authorisation. Code 13 (Governance and administration of occupational trust-based schemes providing money purchase benefits) makes it absolutely clear that the regulator expects trustees to not only get to know their members, but to actively engage and get their views, then act on these. Trustees need to report how they are doing this in the annual Chair’s statement. As Chair’s statements now have to be published on a publicly available website, all eyes will be on master trust’s member engagement strategies.

At an industry level it’s probably fair to say that master trusts don’t know their members well enough. But some master trusts are making great strides to change this. Aegon is a great believer in using member insights to understand and get closer to members. Using member insights can identify concerns, trends and be useful to put together workplace campaigns at employer level.  They can also help the development of personalised communications and generally improving the member experience. Combining insights with behavioural finance techniques can create a stronger member experience and lead to a conversation between trustees and members.

Simple techniques such as the trustees listening in to members’ telephone conversation will give valuable insight, much more than simply monitoring email open rates or how long members stay on a web page. Enabling the Trustees to hear first-hand about members’ concerns and how they want to be communicated with is a powerful tool. 

We are passionate about giving members a voice. We have a customer online panel of 9,000 customers and are about to set up a panel specifically for master trust members. Insights gained will be used to develop the master trust proposition and engagement strategy, for example, by testing communication material with members. Panels are run by our insight team lead by Dr Tom Mather, an expert in behavioural economics / science.

Dr Tom comments:

“We use online panels to get a rich understanding of who our customers are, what they need and value. Feedback gathered through our customer panels informs decision making at all levels of strategy, proposition and communications development.”

Online panels and focus groups are powerful ways to get to know members and give them the opportunity to be involved in the development of the master trust.  The message we are hearing loud and clear is that members want communications to be simple, personalised and relevant and they want to speak to someone for reassurance when making decisions. Above all, members want a rewarding experience.

This is an exciting time for master trusts and they have to prove their worth. Members are relying on them to provide support and help them achieve their desired income in retirement.

Combining member insights and behavioural finance has the potential to not only recognise members’ needs and views better but ultimately win the prized goal of better engagement and member outcomes.  

[1] UK defined contribution and retirement income, Broadridge Market intelligence report 2017