Can you tell us about some of the key concerns for DC investors today?
I think the critical issue for DC investors today is the amount that they are actually saving. With low interest rates available around the world, it’s important to save early and often in order to benefit from compounding as they go through life. So if I could give one message to DC investors now, it’s save more and save early.
What can be done to improve engagement with these investors?
To engage with investors you need to be able to address their needs and make it real for them. A lot of people think pensions are pretty boring and dull, but they don’t have to be.
Making it real for them means taking a thousand pounds now and translating that to them when they’re older, when they’re nearing retirement. One thousand pounds now can be seven or eight thousand pounds when they retire. Another way of engaging with them is to really identify with their values. Investors, especially younger ones, really care about what their money is doing, whether it’s impacting the environment, how it’s impacting society, etc.
Being able to bring these points to life allows pensions to become more real, and as a vital part of their future, become more tangible for them today.
Is there an area that DC schemes and asset managers can address today that would increase engagement across both cohorts?
One element of this is how you deliver that information. Increasingly investors don’t want to receive big thick prospectuses in the mail; they want it delivered to their phone, they want a digital experience, and making it live for them in that environment will increase engagement massively.
Really, when we report on our pensions, it’s important to be able to identify with the values of the investor, and increasingly if you take a look at surveys of millennials, the two things that concern the most are student loans and the amount of student debt that they have, and the second thing is the environment. Having your investments be able to report on these important things like the impact on climate change, like the impact on interest rates etc., I think is critical.
Chief investment officer Curt Custard offers straightforward advice for getting investors to engage with their pensions
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