Until yesterday, most people had never even heard of Richard Thaler, and those who had, possibly knew little of the impact he’s had on our daily lives.
This year’s winner of the Nobel Prize for Economics and author of ‘Nudge’, along with other academics and behavioural economists, have spent decades researching how to overcome our own psychology and achieve better financial outcomes. Nowhere is this more important than when saving for retirement.
As both my ‘Millennial’ daughters will testify, ‘nudging is more important than nagging’ – in all things! They know they need to save but they need help to do it. They want to be motivated, find that it’s simple to take some action to improve their position and then feel positive about it.
And when it came to the Government’s five-a-day campaign to get us all eating more fruit and vegetables, few of us changed our behaviour for the better. Again, we felt nagged. Yet supermarkets’ positioning of healthy fruit at our eyeline has proved more successful, gently nudging us towards healthier food choices and away from those chocolate bars.
Over the years of Thaler’s work, there have been many more financial products and more decisions to be made. But more choices are not better choices for most people. When faced with so much choice, our over-worked brains often make no choice or an irrational choice.
So, through the contributions of Kahneman, Thaler and Benartzi, we know a lot more than we did before about helping people in financial decision-making. But, it’s the tip of the iceberg when it comes to long-term savings and helping people make the right decisions, particularly around retirement.
Like Richard Thaler, we’ve been around a long time and we’ve been using these insights at Ferrier Pearce to create successful communication and engagement strategies for our clients. Your members are consumers in everyday life – they don’t change when they receive pension communications and this approach, sets us, and the communications we develop for our clients, apart.
We’ll be at the PLSA Annual Conference next week, so why not stop off at our stand and find out more about our approach?