Sometimes we know something is wrong, but we need bright sparks like the behavioural economist, Shlomo Bernartzi to explain why in an authoritative and compelling way.

Back in November he started his highly impressive presentation to the ASFA Annual Conference by telling us that “it does not help anyone to say that ‘everyone is saving too little’.” And similarly I have always suspected that warnings given by financial services firms, about our general lack of saving, were ineffectual.

These warnings start with a public survey that finds around 73 per cent of us are not saving enough to generate the income we expect to receive in retirement. While I would not question the way stark actuarial facts clash with our fuzzy headed financial projections, I have always objected to the wagging finger comments that follow such findings. These surveys are usually the product of organisations that employ both actuaries and sales people; the actuaries do the sums and the sales team tells the public how profligate they are.

Bernartzi’s Save More Tomorrow plan brought the average level of annual saving for four million Americans up from 3.5 per cent to 13.6 per cent in 15 years, through the use  of an automatic prompt to save more, which recognised, in Bernartzi’s words that people are “cognitively lazy” when it comes to changing their saving patterns.

Similarly, he advised super funds will have much more success with behavioural finance solutions than through telling people off. He suggested designing a different website for different types of members in accordance with their risk tolerances. He saw a big future for financial health Apps and impressed how getting the online proposition right could be as important as success in investments. He left us with a fact as stark as the ones actuaries have been giving us for years about our saving rates, that super fund trustees and executives are now as much digital fiduciaries as fiduciary investors.

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