Council Opinion

As well as needing to understand options around members’ pension plan, people will need to think about a wide range of other lifestyle and financial planning decisions. The shift from working life into retirement or semi-retirement isn’t straightforward and can cause great
anxiety.

Retirement counselling services have existed for many years but haven’t necessarily been widely available. In order to reach the mass market it is probably necessary for providers to build a service into their DC proposition. The service will, of course, need to be paid for and this
could be on a fee basis, or factored in to the annual management charges taken during the lifetime of a plan. Recently, AXA reviewed its approach in this area through a series of focus groups. The feedback was helpful in reshaping the way we think about the content, style and length of retirement counselling sessions. The feedback focussed on six key areas:

1. Initial views on attending the course: some participants experienced difficulty with their manager in getting a day out of the office. Others were concerned that rather than offering guidance and reassurance, the course would be a sales pitch. Clearly the course needs to be positioned properly with all involved.

2. Pre and Post Course Perceptions: men were far more confident about retirement than women before the course but confidence scores were
almost equal immediately after. Confidence about making the transition moved from ‘not very confident’ to ‘very confident’ following the course. The value and reassurance all individuals got from the course was very clear to see.

3. Duration and timing of the course: the majority felt that one day is the optimal length and that around six months before retirement was an appropriate time to attend.

4. Group composition: the underlying theme here was that a mixed group allowed participants to share experiences and it was reassuring to see others had similar worries and concerns.

5. Economics of the course: although all attendees got great value from attending they were on the whole reluctant to pay for the session. The attendees saw this as a very clear employee benefit, with comments such as ‘I see it as a caring employer doing the right thing to help their employees.’

6. Who should host the course: not surprisingly there was a view that the course leader should be close to or in retirement with personal experiences to share. Equally, the group didn’t want anyone ‘too slick’ or making a sales pitch.

AXA will be applying the full findings from this research to further develop its proposition for both new and existing clients. I believe this is quickly becoming the most important area of DC planning and it is vital that, as an industry, we get it right. If anyone active in this field would like to discuss our findings and share their own experience, I would be happy to hear from them.

Alan Millward

Head of Workplace Distribution at AXA

alan.millward@axa-sunlife.co.uk