Wasserdicht’s Dutch pension fund is looking to improve the way it communicates with members. Or as Rolf, our chairman of trustees, puts it, the way we talk about bad news. Our friends Lars and Paul, from our sponsor’s favoured management consultancy, have been seconded to us to help.
Lars and Paul have found that 18% of our members don’t read the communication they receive from the pension fund and that 27% of them don’t understand it. Overall, 88% spend less than 15 minutes a month thinking about their pension and long-term savings requirements. We need to help them to do better.
Lars and Paul have brought Arie-Jan to present to the trustees on behavioural psychology: we need to understand how people think before we can work out what we want to tell them.
Arie-Jan has looked into the quantity of shampoo Dutch citizens use. In fact, as it becomes clear, he has studied this subject extensively. Apparently we Dutch use too much, precisely 12% too much on average, and this is polluting rivers and waterways.
Arie-Jan is very passionate about this topic, gesticulating as he paces around the room. ‘The problem is how you convince people to use less shampoo but also maintain confidence that their hair will be clean,’ he says. He writes the words ‘convince’ and ‘confidence’ on the whiteboard, before showing us a video about shampoo.
It’s not clear how shampoo relates to pensions. But this question is waved aside for the time being. ‘Humour and fear are powerful weapons,’ Arie-Jan says, before embarking on a discourse on social media and the length of time the average Dutch person spends in the shower.
Finally, he brings the discussion back to pensions: ‘It’s all about getting people to engage with the over-familiar. You use money every day but you don’t think about the long term. Likewise, you use shampoo all the time but you don’t think about the long-term consequences of using too much.
‘In fact, my research has proved that Dutch citizens will use 8% less shampoo if a trusted figure connects the issues of shampoo, hair and water pollution on social media.’
‘Isn’t that still too much shampoo?’ asks one of the trustees. ‘It’s a start!’ declares Arie-Jan. ‘This is a long-term journey and you can’t expect a revolution over night.’
It’s not entirely clear how we are going to relate all this to the investment department butLars and Paul helpfully summarise the presentation in a handout shaped like a shampoo bottle.
‘Personally I’m not sure it is going to be profitable for our members to spend more time each month thinking about our interest rate hedge ratio,’ I tell Geert, our investment strategy head.
‘No,’ Geert replies. ‘And it’s not clear how this will help them think more about their long-term interests. But I am certain Lars and Paul are going to tell us at our next meeting.’
Pieter Mullen is investment director at Wasserdicht Pension Funds