The superannuation industry has innovated. Complex product and sophisticated investment offerings, systems, platforms and certainly in tools to assist advisers in helping their clients.
But it’s arguable whether many super members would describe their super fund as innovative. Indeed, many may not even know who their super fund is.
It’s not for lack of trying, on the part of super funds. Virgin Money’s attempt to disrupt the market and present themselves as edgy and cool didn’t last long. Richard Branson sold out of the super business in 2013, three years post launch – to a bank*.
It may be a lack of focus.
The simple fact is running a super fund doesn’t come cheaply and with ever increasing regulatory or legislative change, super gets more complex and monies are often diverted to ensure the fund complies with the law rather than on addressing the members’ engagement needs.
It’s easy to see how this environment may be fertile grounds for disruptors to crack the ‘daggy therefore disengaged’ equation.
More likely however, the disruptor will be a peer. An existing provider who has the right strategy, deep pockets and the desire to not simply turn their focus to the retirement phase but also focus on the needs of accumulators and the advice and engagement needs of all their members.
Research KPMG conducts with super clients’ members usually highlights that regardless of age or demographic (to make it sexier) – all members want the same. HELP. Help with their super, appropriate to their circumstance, at an affordable price. Importantly, all members regardless of age rate digital help second to face to face help, which does not mean having to physically sit in front of an adviser. Video conferences seem to work just as well.
Super funds certainly need to ensure they:
- Help their older members by offering innovative and affordable retirement solutions; and
- Help accumulators to make informed decisions to help them save for retirement.
This is their everyday business.
But innovative super funds are working on:
- Implementing proactive compliance and risk management systems – leveraging regtech solutions
- Engaging in Treasury’s CIPR** Framework debate to help frame the retirement income products of the future
- Investing in Data Analytics to help them better understand members and their needs; so they are better placed to meet expectations. Such as designing new retirement products and/or to assist in the development of targeted information/education to be able to provide to the member at the right time.
- Investing in agile fintech solutions to reduce administration costs and/or provide digital help to members. For example, providing education which enables a member to self –guide, making informed decisions about relevant topics such as contributing to super, forecasting what a super balance means as a weekly income stream in retirement and enabling a member to connect to an adviser online for face to face discussions.
- Reviewing advice models to ensure they are designed to be cost effective and to meet their member’s needs
The smart super fund will be focusing on these to shift the perception and the reality from ‘daggy’ to ‘desirable’. Time to get engaged.
* Mercer took over the super fund in December 2016
**CIRP stands for Comprehensive Income Product for Retirement