There’s a great white elephant in the room that is our super industry.
That elephant is the fact that many of our customers don’t understand what we’re saying. The super industry has never talked more, but to many we’ve been spouting gobbledygook.
The effects of the global financial crisis on super balances has exacerbated this disconnect. As an industry we risk an increasingly disenfranchised customer, characterised by opt-out and apathy, if we can’t start speaking the same language.
The dialect of super
With the introduction of compulsory super contributions in 1992, masses of new customers were squeezed into an existing framework, a framework developed around the then average investor, who was a financially literate male with a financial adviser.
Even in 2009, industry interaction with customers has hardly adapted to a vastly different customer base.
Perhaps as a result of Australia’s strict regulatory environment, or because we’ve been unduly lax in the face of mandated contributions, to our customers we are an industry characterised by convoluted communications, an outdated distribution model, and a language that can best be described as the ‘dialect of super’.
Meet your new average customer
The new average customer has at least one super account. Many of them are direct customers with very little financial investing experience. They are time-poor and expect to interact with service providers when and where it’s convenient.
In the world of the new average customer, core financial decisions are often made by women, be they the stay-at-home mum who is responsible for running the household finances or the single working mother.
Yet, the framework we’ve inherited is derived from the paradigm of the average customer who is a financially literate male, and the way the industry continues to interact reflects this: a disproportionate amount of effort goes into communicating with financial planners and dealer groups, and even the vernacular we use is outmoded and irrelevant.
Consider terms like ‘old-age’ and ‘retiree’; increasingly the new average customer will never think of themselves in these terms, no matter how old they are.
For the new average customer, now more than ever, super is literally their future, their family’s future. The impact of the financial crisis on their balances is frightening. The feeling of not being in control while they watch their balances dwindle has the potential to disengage a whole segment of super investors.
The current economic environment has made it even more imperative that we as an industry modernise every point of interaction and start speaking in a meaningful way with this lost generation of super customer.
Applying a ‘simplicity principle’
The era of dire warnings is over. A concept I will call the ‘simplicity principle’ is an approach we can take to demystify super and re-position it for the customer as an aspirational goal, rather than something you have to rely on when you get old.
To demystify super will take a fundamental shift in the attitudes of our organisations towards customers. The inherent presumption that our customers understand even basic investment concepts should be replaced with the presumption that they’re starting from scratch.
Applying the ‘simplicity principal’ means simplifying the language we use, reducing the size and complexity of communications, providing people with the information they really need in a form that doesn’t overwhelm or deter, and giving it in a way that’s accessible to the average family.
I’m known to use the analogy of my mother. Would she understand this? What about this is important to her? What will engage her in what, for most Australians, will be the second biggest investment of their lives (after their house)?
However, communicating plainly and simply is only half the battle. The rest is making super aspirational. We can achieve this by talking about super in terms of what matters to our customers, making it relevant to them and their families. This will be all that we need to do to engage them and motivate them to educate themselves.
Education is a word bandied around a lot in this industry, but I see a brilliant opportunity here to change the current model of ‘pushing’ information onto customers (and hoping someone’s listening) to a ‘pull’ model, one where customers look to us for guidance and advice.
We’ve been lax for too long. As an industry we have a duty of care to make sure our customers understand the product and our commitment to them, and in the most basic interpretation of that duty we could be considered to have failed. It’s time to change the conversations we’re having and start speaking the same language.
Vicki Doyle is the executive general manager of super and investments at Suncorp Wealth Management.
