This week I attended a course on the ‘tone of voice' we should use when communicating with customers. The grumpy old man in me tends to feel that today's younger generation would benefit more from learning grammar and punctuation, but tone of voice refreshers do remind us that we need to write to non-specialists in a way they can understand and relate to.
Our approach is to be like a trusted friend: authoritative but approachable, warm but not over-familiar, conversational but not chatty, and explaining often complex financial matters in a way that is clear, simple and brief.
It strikes me that we’ve moved on a long way from the days when insurance companies almost prided themselves on writing in a way most consumers had little hope of understanding. The tone of older communications was “trust me, I’m an actuary”. Unfortunately, these days many people don’t trust actuaries, insurance companies or indeed anyone else involved in financial services. They want to be very clear about what they’re getting.
While there’s definitely still room for improvement, I think we’ve moved forward a long way in our communications and treating customers fairly (Tcf) has prodded us further in the right direction. Any company that relies on obscuring reality with confusing jargon will receive little sympathy from the FSA or the Ombudsman if things go wrong. That should keep us on our toes.
There’s also been a marked improvement in the way the government communicates with us. The pensions ‘simplification’ measures in Finance Act 2004 are horribly complicated, but individual paragraphs are much easier to understand than in the past. I also think the new online manual (www.hmrc.gov.uk/pensionschemes/rpsm) is a significant improvement on IR12 and IR76.
The problem areas now are those not covered in enough detail by the manual, meaning we don’t know what will happen in practice. The biggest by far is the ‘wholly and exclusively’ rule for directors’ pensions. We thought the maximum funding rules had simply been replaced by the annual allowance (£215,000 this year), but local inspectors of taxes are challenging much lower levels of employer contribution on the basis that they’re not wholly and exclusively for the purposes of the business.
This leaves advisers in an impossible position because they don’t know what best advice for their clients is. We’re pressing hard for a quick resolution of this.
I suppose the lesson is that it’s not just how you communicate but what you communicate that counts.
The tone of voice can be perfect, but if the information is deficient we’re no better off.
Ian Naismith is head of pensions market development at Scottish Widows.
The views expressed are those of the author and not those of the company he represents.IFAonline
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