Real people. With stories that tell us far more about who they are as people than the figures in their statements or their age. The better we know these personal stories, the better our investment communication. And, I believe, the better the outcome for the investor.
Here are two very different investors facing a similar drop in their super balances...
Mary is a 65 year old professional who is a member of a not-for profit super fund. Mary planned to retire this year...until markets savaged her balanced portfolio. Despite the drop in value she's seen, she's actually pretty calm about it. She's saving more and planning to work part-time rather than retire. Mary trusts her planner, the fund and the advice she's been given and she's happy to sit tight until markets recover. Until then she'll keep working and focus more on her grandchildren than her travel plans.
Compare her with Peter, the 45 year old index fund member who avoided opening his statements for six months. Those statements sat in his home in tray under piles of other unopened mail (he's busy - he works in financial services!!!). When he did open his statements he discovered his high growth fund had been, well, smashed. And he got angry. Who with? Peter doesn't have a financial adviser. He choose the fund manager, the fund and the style of investing. But does he feel responsible for what markets have done to his retirement savings? Not exactly. He got angry with the fund manager. Furious. Wanted to switch to cash immediately to teach them a lesson. Which of course given the equities rally since January wouldn't really have penalised anyone except himself.
I recently had the honour of speaking to a group of super fund executives (Fund Executive Association members) around Australia about member communication. The presentation focussed on the usual - strategies, tactics and examples of superb investor communication both in Australia and overseas. We also talked as a group about those fund members and their stories...how understanding who these people are helps us as finance professionals deliver messages effectively.
The better these message are delivered the more able we are to serve investors best interests - to inform, to educate and to advise (where permitted).
So bring on the numerical, demographics, attitudinal and behavioural analysis that might help create viable investor segments for the purposes of communication...and in the meantime personify those people by taking the time to understand their stories.
Budget, time and technology are often against us when it comes to creating really useful (such as a combination of attitudinal and demographic info) segments of fund members.
A simple way to get an informal (and still useful) feel for who these people are and how to communicate effectively to them is simply to take calls or listen in to calls in the call centre...review recordings, read the FAQ. Switched on fund execs are taking any steps they can to get closer to investors in order to help them - with really good quality communication that enables members to make good decisions no matter how volatile markets are or how damaged their super may look.
Credit where it's due....There is this very talented communications professional I know (Andy Eklund) who collaborates with us on client projects, trains our clients in communication and trains our team of financial services communication consultants. He's far more informative than I will ever be on the subject of audience analysis.
This post about audience analysis is the first in a series of investor communication posts. Other topics will include how communication really does impact investor behaviour and how to create messages that work for investors. Post a comment to let me know of any other topics of interest, or to disagree with my posts!
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Thanks for reading. Constructive and relevant comments welcome!