Superannuation funds scramble to improve member communication

The superannuation industry has rarely faced a period of greater change, and as Damon Taylor writes, there has never been a greater need for effective member communications.

Between investment market volatility and the reforms inherent in Stronger Super, change has become a constant for Australia’s super industry.

Indeed, for Michael Dwyer, chief executive officer of First State Super, member communications have never been more vital.

So while individual funds may have quite different focuses within their communications strategies, all are intent on reassuring members that they are in safe and trusted hands.

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“For us, having joined with Health Super and transitioned to around $34 billion in funds under management and 750,000 members, there’s obviously been a lot of communication in relation to that merger,” said Dwyer.

“And I think that’s one of the areas our members have found particularly reassuring, the fact that we’ve kept them abreast of changes and anticipated changes all the way through.”

Demonstrating a more common member communications focus, Peter Lambert, chief executive officer of Local Government Super, said that with continuing turmoil in global markets, volatility continued to be a key theme.

“Clearly, the markets have been extremely volatile in the last couple of years so we’ve been trying to emphasise the benefits of a long-term strategy,” he said.

“We want our members to ensure they have a strategy that they’re comfortable with, and that they can maintain that strategy through periods of volatility.

“So if they’re finding that volatility difficult to live with, then perhaps it’s time to revisit their chosen strategy and see whether they might need something a bit more conservative.”

For Dwyer, irrespective of what a super fund might be communicating with its members about, it is never appropriate to rest on one’s laurels.

“So by any measure, the merger of First State Super with Health Super was a success,” he said.

“It was a success in terms of profile and media coverage, it was a success in terms of feedback from members and it was a success from the CEO’s perspective in terms of satisfactorily and successfully merging the administration, merging the product offering and merging the assets.

“All of those boxes have been ticked, but is it something we can rest on our laurels with, particularly with all the changes going on in superannuation?” asked Dwyer.

“No, it’s not. I think we have an obligation in the current environment, where there’s a huge wave of change coming via Federal legislation, to communicate with our members as effectively as possible.

“We have to distil that legislation and communicate it in a way that reassures members that they, and more particularly their retirement savings, are in safe and trusted hands.”

Of course, the wave of change Dwyer refers to is without doubt one of the biggest communications challenges this industry has faced in recent years.

It seems certain that the majority of superannuants will find themselves in MySuper investment options and yet for Lambert, communicating such changes does not have to be complex.

“In the first place, the recent legislative change set to come through with MySuper will allow lifecycle options and we think such a move is welcome,” he said.

“We have a lifecycle option which we believe is perfectly suited to the so-called disengaged member, and that effectively tries to profile the option they should be in – based on their age – and moves them to less risky options as they get older.

“We’ll be simply putting those lifecycle options up as a really good solution to members who don’t have the time to manage these things actively.”

According to Lambert, Local Government Super’s MySuper communications strategy was so simple by virtue of the fact that all of its products would be MySuper-type offerings.

“Members are in the strategies because they’re in a lifecycle or they’ve chosen to be there,” he said.

“So we’re really just marketing the fact that we’re a value-for-money proposition and promoting the brand to our members.

“We’re very much a niche player in that we effectively service local government. Our messages don’t need to be complicated.”

Advocating a similar approach, Libby Roy, director, corporate superannuation for AMP, said that good communications strategies had always focused on members and that wouldn’t change with the advent of MySuper.

“Over the last couple of years, AMP has invested in both increasing our communication and ensuring we are more accessible to our members,” she said.

“An example of this is our Member Benefits Report which we’ve redesigned.

“We’ve customised the communication to each member’s personal situation, which allows them to understand whether their super will be adequate and take appropriate action relevant to their personal circumstances,” Roy continued.

“All of AMP’s communication is focused on assisting members make the right decisions for their circumstances.

“And that won’t change in a MySuper world.”

While admitting that there was certainly a need to explain MySuper funds and how they differed, even minutely, from First State’s previous default funds, Dwyer again emphasised the need to simply reassure members.

“We’ll certainly tell members that, but at the end of the day we’ll be reassuring them,” he said.

“We have a very chatty, informative six-monthly newsletter and we’ve got a very active website and certainly more and more as time goes on, we’re engaging in social media.

“So we’ll be getting the message out there,” Dwyer added.

“But from our members’ perspective, there won’t be major changes.

“The product offering will be largely the same, our costs will still be close to those of the lowest cost provider in the country, and we will still be the same place; the same telephone numbers, the same friendly advice they get on the phone.”

In fact for Dwyer, Stronger Super, MySuper, SuperStream – any of the Government’s current wave of legislative reform – would not change the industry’s fundamental communication and engagement challenge.

“The challenge of education for members these days is that it’s always hard to get people to engage when they’re not going to actually benefit from the product until they get into their mid-50s, late-50s, 60s, whatever it might be,” he said.

“Our job is to be there and give them the answers when they need it, help them sort through what, to them, may be a maze.”

Yet the superannuation industry’s difficulty with engaging members is nothing new.

After all, the disengaged member is what much of MySuper is built around.

The question before all fund executives is how to encourage their members to read their statements, to think about what options they are invested in, and to look to voluntary contributions – but for Roy, the answer lies in making superannuation meaningful.

“I agree that this is a challenge,” she said.

“However, I also believe that given superannuation’s importance to people’s futures, it is possible to make it meaningful for them, which is what we’ve tried to do with our Member Benefit Report.

“The opportunity is to ensure that the communication is relevant to individual needs and not just built around the industry compliance requirements,” Roy continued.

“New technology and communication mediums present an opportunity to provide individuals information when and how they are most likely to read it.

“Mobile communication devices play a key role here and we need to leverage this channel.”

Agreeing with Roy, Lambert said that engagement was about tailoring funds’ messages to members’ specific circumstances.

“We’re not sure that there really is a disengaged member, as such,” he said.

“I think there are members who have little time for super and therefore rely on the trustee to make some fundamental decisions for them, but I’m not sure that we specifically hold that people have absolutely no interest in super.

“What we believe is that their interest is very much aligned to the stage they are at in their lives,” Lambert continued.

“So when they’re younger, their interest is more aligned to insurance-type options and the fact that it’s portable and it’s no fuss as they move jobs.

“But clearly, their interest changes as they get older and their balances build.”

And given that changing interest, Lambert advocated segmenting memberships in order to get the greatest traction from outgoing communications.

“We believe we just need to use single, simple messages to people,” he said.

“And we very much segment our communications wherever possible and also utilise a number of different channels because certain channels are more relevant to different people.

“You also need to make sure your communications are relevant and timely,” Lambert continued.

“For younger people, to make it relevant to them, you don’t want to bog them down with investment stories, what’s happening in the markets over the long term and trying to get them to look long term.

“They’re just not interested in those sorts of messages; they accept them but they don’t want to read them.”

Asked whether the key lay in providing superannuation with some sort of immediacy, Roy said that it was vital to deliver messages that were both meaningful and timely.

“It’s dual: both tailoring the communication channel and length to present information when members are more likely to be interested or have the time to engage,” she said.

“There is a good case study in the UK where supermarket chains digitally displayed in bus shelters how customers could order groceries on their mobile phone and have them home delivered.

“This was hugely successful as customers had time to kill while waiting for the bus and were thinking about what they wanted for dinner,” Roy continued.

“In superannuation we need to increase our sophistication of how and when we communicate to our customers.”

Interestingly, it is that level of sophistication in terms of digital communications and social media that must be considered so carefully now.

Twitter, Facebook, smartphones, apps, all of these things have become commonplace in recent years, and yet how are funds to integrate them into a communications and engagement campaign?

For Lambert, the answer is not yet obvious.

“I don’t think you can ignore these things but I certainly think you need to make an informed decision about where to invest resources,” he said.

“So I think we’re a little bit in the camp of watching developments and seeing what types of applications or communications seem to be taking hold.

“I think the main thing is to have a strategy around social media and mobile marketing, based on the needs of your member rather than jumping on bandwagons,” Lambert added.

“A lot of time and resources can be inefficiently used, and all too easily, if you take the wrong approach.”

Sharing some of Lambert’s concerns, Dwyer said that the question lay in how many members would see legitimacy in communicating with their fund via these mediums.

“You don’t want to be using something that people become disparaging about,” he said.

“It’s all very well to have a group of friends on Twitter but if it’s not appreciated that your financial institution has it, then perhaps that’s not a path for us to go down.

“We want to hear what our members are saying about us, and that’s what these channels of communication do so well,” Dwyer continued.

“Often they’re like the canary in the mines; if you’re doing something that’s not particularly useful or effective and you’re monitoring the Twitter conversations, you can pick up quite a lot.

“But again, it’s really about talking to our members, talking to the different age groups and finding out what they want from us.”

Alternatively, Roy said that provided there was consistency in the links and labels between communication mediums, there was no reason why social media could not be well integrated into an overarching campaign.

“I think it’s important to have a multi-channel approach to communicating with our members, and social media is part of the mix,” she said.

“People increasingly want to communicate at a time that is convenient to them and through a medium that is accessible while they are on the move.

“Smartphones and social media provide these vehicles and it is important that we embrace these within our communication strategy,” Roy continued.

“But consistency of message is the key, and ensuring that we link and label between the different mediums.

“Typically, social media is an effective mechanism to point customers to the right source of information, so complementary channels, be they phone, web or mail, are still important.”

Yet irrespective of what a super fund’s communications strategy may involve or what it may be, the bottom line is whether that strategy is working. Yardsticks here are difficult to come by but for Lambert, funds must look to the basics.

“We do an extensive member satisfaction survey and part of that is communication,” he said. “So there’s a bit of feedback we can get from that.

“We also measure the number of members who are making investment choices as a proxy for a higher level of engagement,” Lambert continued.

“We measure the number of members and the dollar value of the voluntary contributions that come in to see whether members are getting the message about co-contributions, maximising their entitlements and the tax benefits involved.

“The amount of rollovers we see, the number of members that attend worksite visits and ask to see one of our financial planners and so on – they all give us some idea as to how well our messages are being received.”

Citing similar examples, Roy points out that the simplest measure is member retention.

“There are numerous measures of customer loyalty, satisfaction and engagement that give us an indication as to how successful our communications are with our members,” she said.

“But at the end of the day, members will stay with a provider that makes the complex world simpler and is easy to do business with.”