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Technology vs the Human touch in Fund Communication (print ready file) Back to Top
By Zeldeen Müller, Director: inSite Innovative Education Solution (Pty) Ltd - March 2009
Pension Circular 130 transformed the way in which Board of Trustees applied their minds to member communication. This encompassed formalising communication strategies, utilising a wider range of media, broadening the messages communicated and increasing the frequency of member communication.
Technology is playing a much larger role in assisting Funds to reach members; with e-mail and sms communication drastically improving the accessibility of information. Even though it offers cost and other advantages, the utilisation of electronic media has its own challenges. For one, it offers a solution to information distribution, but does not necessarily improve the transfer of knowledge.
E-mail communication is also limited to those Funds where the bulk of members have electronic access. The challenge here is to ensure these messages do not get swallowed up amongst the barrage of e-mail communication received by Fund members on a continuous basis. Research has shown for example that utilising e-mail as communication medium has a 10% success rate when it comes to distributing information, with the bulk of these messages ending up in the recipients' deleted items folder - unopened.
SMS communication has a much higher success rate, but the limited characters allowed restricts what can be conveyed via this channel. With the literacy levels prevalent in South Africa as well as the rest of Africa, Boards of Trustees also have to apply their minds when drafting SMS messages to attain a balance between keeping the messages simple and understandable but also conveying enough detailed information to achieve the required understanding.
With the increased employee turnover encountered in the current job-market as well as the ease with which members can obtain new cell phone numbers, updating databases with correct member contact information can also become quite a challenge.
Utilising technology can however create greater visibility for the Fund. This is due to the increased frequency of communication interventions that can be achieved, which were not always possible when communication was strictly done in hard copy format; mainly because of the effort necessary to get the printed material to members as well as the increased cost aspect of producing this material.
Electronic communication can therefore provide an effective conduit for information sharing, given the demographics of your specific target market. However requesting assistance in the here-and-now is somewhat lacking, as the more electronic the communication, the less the human-to-human contact. In evaluations done on Funds and members' preferred method of communication, one aspect that was not necessarily surprising was that members longed for face-to-face interactions. This is especially relevant when it concerns difficult decisions such as member investment choices. The use of Fund call centers, where possible, can also assist with bridging this gap, as well as an approachable and informed HR representative. But interestingly, quite a number of members expressed the need to have the opportunity to hear from the Board of Trustees of their respective Funds.
Funds are offering members the option to attend member sessions, at least once a year, where members are given the opportunity to ask questions and interact with the presenter. A large contingent of Funds however uses Fund consultants or other experts to deliver these presentations. From a practical perspective, this makes a lot of sense, as members get the information from specialists in these fields and these presenters are usually also very efficient in conveying difficult information. It does however ignore members' need to meet the people behind their Fund - i.e. the Board of Trustees.
We have to recognize that it is not feasible for the Board of Trustees to physically be present at all induction- and other member sessions. A possible solution though, is for the Board of Trustees to schedule one session per annum where members can confer with board members. This can be done where the bulk of members reside, with a video recording of the session viewed at other smaller branches. In certain instances members of the Board of Trustees are based in certain of the other regions and where possible, those Trustees can be present at those viewing sessions for a question and answer opportunity.
This does not mean that electronic communication cannot be adjusted to meet some of the human touch needs. Adding photos and personal biographies of your Trustees in a Fund newsletter or on a Fund website will go a long way in introducing members to the people who have their best interests at heart. This can be extended to informal messages published via these media on issues facing the Board which might concern members. The aim is to create transparency and approachability. A personal message by the chairperson of the Fund together with a photo can also be included in the annual Trustee report. Members will invariably feel more secure in the knowledge that members of the Board of Trustees are accessible and have the necessary competencies.
As technology becomes more sophisticated and pervasive, it's more important than ever to stay connected to your members.
Formalising Member Education - Make the Jump! (print ready file) Back to Top
By Zeldeen Müller, Director: inSite Innovative Education Solution (Pty) Ltd - September 2007 (courtesy IRFocus)
With the release of PF130, trustees are faced with the reality of formalising member education. This calls for often difficult decisions surrounding the topic, especially since not a lot of expertise readily exist on boards of trustees on launching an effective communication strategy.
PF130 promotes the appointment of a communication and education sub-committee, drafting of a detailed communication policy and assessing the risk surrounding poor communication. The aim of PF130 is to encourage trustees to apply their mind to this increasingly important issue and to identify the shortcomings in their current communication strategy. But, implementing PF130 will require serious deliberation by trustees.
Increasingly boards of trustees are realising that only complying with the prescribed minimum communication levels as per PF 86 and 90 may not be enough to properly educate their members. Awareness has shifted from distribution of information, to transfer of knowledge. When weighed against fund investments, actuarial valuations and general fund administration, member communication does not always enjoy the same level of attention.
Trustees spend a large portion of trustee meetings on the drafting, implementation and monitoring of the fund's investment strategy. And rightly so. But, the communication of those benchmarks and strategies to members does not always enjoy sufficient consideration. This is especially true for funds offering individual member choice. The investment strategy as intended by the board of trustees can only deliver its full benefit if members understand how to utilise the relevant strategy properly and make informed decisions on the portfolios on offer. Despite hours spent on providing the most appropriate range of portfolios and spending numerous hours on monitoring performances; if members do not utilize these portfolios knowledgably, the value of the investment strategy is eroded.
The dilemma boards of trustee face is to first discover how effective the fund's current member education has been to date and if deficiencies exist, in what areas and how to address them. An interesting estimate could be to test the fund's newly elected trustees, prior to having them undergo any training, on general fund issues such as portfolios on offer as well as the benefits on death and retirement. This is particularly applicable for individual member choice funds. Having been members of the fund for typically quite a period of time, if the communication strategy surrounding investments was truly sufficient, the newly elected trustees should be relatively well informed of at least the portfolios on offer, choice dates and frequency of options. But experience has shown, newly elected trustees very often have very little knowledge of important issues such as these.
It is clear from the above the knowledge levels of members on fund issues have to be determined prior to compiling a formal communication policy. The results of this survey will drive the communication process and guide the board of trustees in which media to use, the most effective distribution network to utilise, topics to focus on, languages to use, knowledge levels of different demographics of members and the level of complexity. This needn't be a costly exercise, as live questionnaire surveys can often prove to be. Technological advances can make this a cost effective and relatively easy process; even where employees are not computer literate.
Once the base knowledge level of members has been determined, the communication policy can be tailored to suit the fund's needs. The results of any strategy implemented should then be measured against this and the necessary adjustments made. It is clear the release of PF130 and its guidelines on member communication and education is yet another positive step in the journey towards up skilling fund members. The success however, will be determined by the efficiency with which these guidelines are applied to facilitate this growth.
How to communicate with your Retirement Fund members (print ready file) Back to Top
By Zeldeen Müller, Director: inSite Innovative Education Solution (Pty) Ltd - March 2007
Member education is one of the new buzzwords of the Retirement Fund Industry. The debate on member education is being fuelled by the increased need for member flexibility. The question is not whether to communicate, but how to communicate.
Trustees are channelling funds towards increased member education with differing levels of success. Success in this case is measured by the level of knowledge transfer, as apposed to the increased distribution of information, most of which will end up as part of the national paper recycling project.
A case in point is a medium to large organisation that spent a lot of money educating members in 2006. This included monthly newsletters, member sessions, internet access and e-mails. In a survey done at the end of the period, members still felt they were not properly communicated to. What are trustees to do in a case like this?
The natural reaction would be to lay the blame on the members' shoulders who quite clearly got the information, but for whatever reason, discarded it. But shouldn't trustees rather face this problem squarely, by focussing on the transfer of knowledge and finding creative solutions to motivate members to access and read the information.
The challenge for trustees today is therefore motivating members in innovative ways to self-educate. This should not be a laborious process for the employer, the trustees or members. A solution is to make the communication interactive and where possible fun to participate in. Aren't we all still young at heart? It is important to find a balance between the fun to be had by self-educating and the day-to-day work to be done by members. Educational games can add a lot of value here.
Implementing these new and creative ways of educating members also do not need to be a cost expensive exercise. The solution should be easy to access, cost effective and easy to update. Evaluation should be a seamless process.
We are living in an era of increased awareness and the demand for information is increasing daily. But, to add to this, members are no longer satisfied with the traditional methods of communication. It is the duty of trustees and providers to find innovative solutions to this problem.