Is Super too daggy to engage with?

Cecilia Storniolo, Director, Advisory
Cecilia Storniolo, Director, Advisory

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:

  • Comply;
  • 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.

@Cecilia_St

Mercer took over the super fund in December 2016 

**CIRP stands for Comprehensive Income Product for Retirement

4 thoughts on “Is Super too daggy to engage with?

  1. You’ve answered your own question: “The superannuation industry has innovated. Complex product and sophisticated investment offerings, systems, platforms and certainly in tools to assist advisers in helping their clients.” Too many funds have built themselves for advisers and the minority of people who want complexity (or sophistication depending on your point of view). This reinforces the conjecture that a few too many product developers confused ‘engagement’ with investment choice and switching. Ironically this points to how MySuper and FOFA might have saved many funds from themselves as it’s given them permission to refocus on their members who want robust but simple (not simplistic) superannuation. These forces will step up a gear when more funds launch default pension products and the distinction between ‘advice’ and advisers gains momentum.

    1. Thanks Alex. I’m intrigued by your comment re the distinction between ‘advice’ and advisers – love to chat further. Engagement has been a buzz word for decades – I like that tech solutions are evolving to assist and prompting action and I like that there is competition in the product market/super fund world that should hopefully deliver benefits to us the consumers.

  2. Great article Celicia! Help is such a critical aspect of managing your super – well, even understanding it! As a millennial, I have only just recently invested time in understanding my super further and it’s not easy. I have no idea where to start and end up parking any further time. I would love a innovative super fund who is clear and concise and who is proactively engaging me to manage and understand my super.

    1. Hi Natasha – thank you for sharing your perspective. Those of us in the super business are well reminded that for many super is new and it is very complex. Your super fund should have a website and offer basic information to assist you re where to start. If not – give me a call/email me and I’ll provide you with further help or where to find information. Sadly – whilst the information will be clear and concise and help demystify super somewhat.

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