Super funds must evolve: CoreData


By Elizabeth Somerville

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Superannuation funds were at risk of being viewed as homogenous by their members and needed to tailor their offerings to remain relevant and engaging, according to new research from CoreData.

The research firm’s “2015 Post-retirement Report” found members were unclear about the points of difference between funds, which had led to one-quarter of respondents being uncertain about which retirement income provider they would choose.

“One of the things which is really interesting is the whole industry is struggling with engagement and struggling with trying to get their narrative across,” CoreData principal Andrew Inwood told financialobserver.

That had led to funds being viewed as generic as there was no point of difference in how they attempted to engage members and what their offerings were, he said.

“Everyone is trying to do their best, but this is leading to a homogenous offer,” he said.

“They’re trying to be all things to all people and they can’t do it.”

As a result, 40.6 per cent of pre-retirees and 32.4 per cent of post-retirees were unsure which fund would afford them the best overall offer in retirement, the report found.

That represented a $480 billion opportunity for super funds that were able to diversify their offerings and communicate them effectively, Inwood said.

“What I expect is going to happen is funds losing share are going to have to learn how to compete and make a compelling offer,” he said.

“They have got to find a way to add value.”

The premise that superannuation funds solely offered superannuation products and services would be challenged as funds revisited and revised their offerings to remain competitive, he said.

“The idea of being just super has gone,” he said.

“I would expect within the next five years the bigger super funds, which are super only, [would] have to do something to compete.”

The report said that was reflected through an increase in demand for scaled advice, with 60.2 per cent of respondents saying they were likely to use a scaled advice service if it was offered by their main fund, up from 56.2 per cent in 2014.

“As the returns start to become very hard to separate, [funds] are starting to go for small advantages by reaching out to scaled advice,” Inwood said.

“Advice is a great way [for funds] to separate themselves and outperform by offering advice services.”

That would also go some way in preventing members from leaking out of funds, he added.

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