Why super funds need to rethink member engagement

For the first time since compulsory superannuation was introduced in 1992, the country has had a real conversation about super.  

To the industry’s dismay, as part of its COVID-19 response, in March 2020 the Government decided to allow Australians access to their superannuation accounts – to the tune of $20,000 per person. As a result, $38 billion was suddenly withdrawn from the system. Overnight, super became a hot topic during Friday night Zoom drinks and on talk-back radio. But one critical stakeholder group was strangely silent.

At the time, Google searches for “super draw down” jumped to their highest ever level of interest. But when people Googled “Should I draw down my super?” not a single super fund made it above the first-page fold. Instead, comparison sites and the ATO topped the list. This highlights an important point: many individuals simply do not realise they can talk to their super fund about their super.

The early release of super was the biggest single member engagement event in the last 12 months – an opportunity largely missed by an industry focussed on fulfilling the flood of drawdown requests. But now, as a result of the Government’s Your Super Your Future reforms and the findings of the Retirement Income Review, the fund/member relationship is changing – and the industry needs to rethink how it will engage with members in the future.

Now is the time for superannuation funds to step into the breach.

Future reforms changes the game

Future superannuation reforms will introduce new moments when members will be prompted to consider whether they are with the right fund. At the same time, the Government is making it easier for members to choose who manages their superannuation and retirement savings through a new, interactive, online YourSuper comparison tool. By law, funds that fail the new performance test will have to tell their members and refer them to the comparison tool.

Arguably, members’ best interests are not solely served by financial best interests. Just as an increasing number of consumers are willing to pay a premium for products with a sustainable supply chain; as demonstrated by research; would some members choose to trade a small reduction in returns for the comfort of knowing their beliefs are being supported?

So there’s never been a more important time to get fund brands engaging with members.

Super funds have long debated whether a hands-off or hands-on approach produces better outcomes for members and the fund. Now the industry is facing a possible ban on advertising, funds need to consider what else they can do to differentiate themselves and raise brand awareness to stand out from the crowd, retain and attract members.

How can funds engage with members?

Do they need to:

Listen: Super funds may be listening to their members because they know what people are telling their contact centres and complaints channels. But how do funds know what people are saying about their retirement concerns, their super, their strong feelings about responsible investment or a super fund’s brand?

Funds can get a far more accurate idea of member sentiment, pain points and needs using a low-cost brand tracker to trawl through social media, blogs and niche web forums. It’s worth bearing in mind, social media is just the canary in the coal mine. If 100 people on Twitter are moaning about your clunky web site, another 35,000 are probably thinking the same thing.

This is not to suggest super funds need to hire large social media teams to actively listen and respond to community feedback 24/7. Super is a long-term product and members won’t want to engage every day.

But, to better understand what is in their members’ best interests, funds should take the time to keep up with member expectations. When new member concerns or sentiments surface, funds can then conduct focus groups or surveys, or overlay other publicly available datasets, to understand the issue and decide whether the fund needs to adapt to meet its best interests responsibilities.

This is what successful brands do all the time. When a UK bank’s brand tracker picked up complaints from multiple social media platforms that people couldn’t get through to the contact centre on Friday night, they put on more agents during peak calling hours.

For example, by matching different datasets, in this case consumer sales and weather data, a global ice cream brand discovered that – contrary to all the assumptions in its marketing playbook – more people buy ice cream when it’s raining than when it’s sunny. The brand has now aligned its media spend to coincide with bad weather, leading to an uptick in sales.

Search trends (free, public information) are also an important listening channel for super funds. We now know that share of search is a predictive measure of share of voice – and eventually of market share. About six months after brands top share of search, this translates into share of market.

Be available: The fact that funds don’t pop up when members ask Google for super-related answers is a big deal. The (erroneous) impression this creates for members is that they can’t go to their super funds with super questions. As a first step to becoming visible in their members’ lives, funds need to correct this misconception.

Do the current communication mechanisms allow for proactive communication and make it easy for members to ask questions or talk to a fund?

We know many Australians either don’t understand super or don’t care about it until they near retirement. Younger people in particular are not keen to engage with an organisation that looks after their money until they stop work. As well as educating members and bridging what ASIC calls the “unmet advice gap”, funds will need to find a way to support their needs.

The answer may be to transition from an organisation that looks after your money to one that partners with you to support your financial wellbeing. That means showing up in the moments that matter – both good (first job, marriage, kids) and bad (redundancy, bankruptcy). This is not about offering financial advice, but rather ensuring members understand how super works and what their options relating to it are in key life moments.

Be trusted: Do members believe their funds are there to help them achieve a better retirement income? Would members turn to funds to assist them in solving higher order problems?

Around 80 per cent of people experiencing financial difficulty aren’t comfortable asking for help. But super funds – who unlike banks aren’t owed money by members – could position themselves as non-judgemental, trusted advisors Australians could turn to when they’re not sure of their financial options. Yet, right now, only 6 in 10 Australians trust super funds to act in their best interest. What can the industry do to build trust?

Consumers are drawn to brands that make them a better version of themselves – organisations that help their customers grow, thrive and prosper. Could funds build member engagement around that type of value proposition? 

For super funds, 2021 should be the year of the pivot. The year funds join the public conversation, get to know their members and decide how best to support them. We need Australians to become more informed about and involved with their retirement savings. Super funds should be leading this conversation.