If recent advertising campaigns are any indication, the Australian superannuation market is hotting up. Fund returns and benefits are squarely in the spotlight and members are increasingly interested in what additional services their fund can offer.
However, employees still see super funds as providing for their retirement first and foremost according to Bruce Stafford, marketing and business development manager for industry fund HESTA, while ancillary services are a bonus.
“Since choice was introduced, more and more people are thinking about their super,” Stafford said. “It is now at the front of their minds. However, they are still coming to terms with fees and returns, and do not necessarily see their fund as providing more than super.”
Wayne Sullivan, marketing manager at Sunsuper, echoed Stafford’s sentiment. He said that there had been no quantifiable evidence of increased focus specific to professional services and member benefits.
“I think people are now more interested in finding lost super, merging accounts and simply asking the question: ‘Where is my super?’” he said. “At Sunsuper, we feel that rather than looking to services and benefits, our members are looking to brands and positioning. That is where the real opportunities lie for funds to differentiate themselves.”
Doubts over the importance placed by members on additional services appear to be common amongst industry experts. For most funds, choice has encouraged a solid package of fees and returns, without having them rushing to offer their members more than this basic service. Nevertheless, it is clear that ‘must-have’ services do exist across the board.
Paul Murphy, executive manager of marketing and business development for UniSuper, suggests that those must-have services should have a slant towards member communication.
“All the printed material that we use to communicate with members is important,” he said. “It has to convey useful information tailored to help our members.”
“Then there is web technology. Recently there has been a marked increase in interest in the website. It needs to have readily accessible information for members, providing them with ‘self-help’ facilities. The call centre is just as important.”
Sullivan added that the major insurances should also be placed on the list of ‘must-haves’.
“I consider death insurance a ‘must-have’ service for funds. Having it is a requirement to become a default fund. Add to that total permanent disability, member education and financial planning,” Sullivan said.
“Call centres will always play a vital role. Our call centre fields more than 400,000 calls per year, and every one of those calls is a moment of truth. If we do a good job consistently, then our call centre is a fantastic branding centre for the fund,” he continued.
“For HESTA, the website services and email facilities we provide our members with are equally important. Many members are shift workers who simply cannot access the call centre for their enquiries, so quite often the web is their only port of call.”
Of all the ‘must-haves’ identified by experts, the most requested was member education and financial planning services.
“Members simply want help with the decision making process,” said Murphy.
Damien Hill, acting chief executive officer for REST while Neil Cochrane is on annual leave, said that REST had formed a member education alliance with the Superannuation Trust of Australia and Sunsuper, as well as a partnership with Sydney planning firm Money Solutions for precisely this reason.
“Our collaborations in this area provide members with the financial planning guidance that they need,” he said.
However, when it comes to the non-core or value-adding services that lie increasingly within a superannuation fund’s domain, Hill said that there were two approaches a fund might take.
“A fund should first ask what the core services that it provides its membership with are. How broad could we go in our offerings? And, should we stick to the basics or look to broaden our service range?” he said. “There is little doubt that member services are becoming more important as competition in the market increases.”
According to Murphy, deciding what services path to take is all about fund circumstances and fund industry.
“UniSuper is definitely looking at non-core services, but the focus is firmly fixed on the mission. That is, helping people in their retirement,” he said. “We have looked at other financial services such as insurance and banking in the past, and we are already involved with Members Equity, but we simply don’t see ourselves as a portal to these services.”
Murphy stated that it was important for a fund to decide what its specialist market was.
“The reality for UniSuper is that we are in a lucrative sector of the market. We will keep an open mind about additional services in the future and we realise that the superannuation industry is currently a very fluid environment. We will be looking to adapt as the market evolves,” he said.
Alternatively, Stafford suggested that there was merit in a fund providing additional products and services, provided those services were firmly within the financial services domain.
“If a fund offers financial services in particular, they can better position themselves as a one-stop-shop,” he said. “However, quite often there is a timing issue involved. For instance, if one of our members needs a credit card, and they have just recently received their HESTA statement, then at that time they would think of their super fund as providing that service.”
Stafford also stated that over the longer term, choice of fund might increase the number of additional value-adding services offered by superannuation funds. He said that the increased competition brought about by choice would mean increased consolidation.
“There will be larger players in the market,” he said. “And more homogeneity in the products and services offered by those players. Funds can end up looking the same. At that time, non-core products have more relevance and can be used as differentiation.”
Interestingly, when asked about the future of professional service offerings, funds seem to have their sights set on bringing existing services back to the fold and limiting those that are outsourced.
“Funds are increasingly looking to take ownership of member touch-points,” Sullivan said. “And that means moving away from outsourcing and looking to insource services such as education and call centres.”
Hill’s view is that funds should look to integrate their service delivery.
“You can’t simply outsource all the time,” he said. “However, you need scale to be able to viably insource.
In a newly wrought superannuation environment, funds are looking to the future with interest. The consensus is that professional services and their offering has merit, but that it is more important to get the basics right.
Hill’s voice is the one echoed most.
“Looking ahead, we will be maintaining the strongest focus on our core services. But we are looking at those value-adding services as well. We won’t be out there with every service under the sun because we don’t feel that is what our members want. Any additional services will have to be consistent with what our core product is — superannuation.”
