Numbers favour digital advice for retention and beyond


The benefits to superannuation funds of implementing digital financial advice extend well beyond engagement, offering direct financial gains for providers as well, says Decimal Software Chief Executive Officer NIC POLLOCK.

DECIMAL has long espoused the virtues of enterprise digital financial advice as a way for superannuation providers to engage members, provide better retirement outcomes and thus retain their membership.

Today our experience shows most superannuation executives instinctively accept that digital advice will increase in importance as one means of delivering better service to all members. However, like any business investment, it needs a business case.

As digital advice is relatively new, to date it’s been difficult to pinpoint precisely what gains could be realised from that additional engagement other than just retention.

But as digital advice evolves and more funds embrace the technology, Decimal has collated insights and data from a range of institutions with which we work to put some dollar values against that engagement – and the good news is there’s far more benefit for superannuation providers than just providing better service to members.

While some of the data used in this modelling relates to specific member groups, the clear message is that there is significant potential financial upside for superannuation providers offering digital advice.

Specifically we looked at three key areas for potential gains:

  • Member retention: Reducing the number of ‘at risk’ members leaving the fund each year
  • Passive members: Engaging members who no longer have employer contributions going into their accounts or those that have the minimal amount of contributions going in without any additional personal contributions
  • Inactive members: Re-engaging those who have had some level of prior engagement but have not made any additional financial commitment or taken action with financial advice

Member retention

Retention of members is the number one priority for many superannuation providers. Decimal’s research shows it is also the area in which the greatest financial gains can be made.

The criteria for determining exactly what constitutes retention risk differs greatly between individual funds. Nevertheless, our data indicates that funds implementing digital advice that includes contribution related advice topics can reduce retention risk by approximately 15 per cent.

What is more, those funds realise an average financial gain of $560 per annum for each retained member. To put that into realistic financial terms, that’s over half a million dollars a year for every 1,000 members retained.


Passive members

The bulk of members in every fund have no level of engagement with their provider. A large number of employed people moving jobs will often accept the default superannuation product when starting a new job which means that at any given time, employers deposit the guaranteed contribution amount into the member’s account at regular intervals. But until the member approaches retirement age and the prospect of drawing on their savings, the lack of interaction continues.

Such members also pose the greatest retention risk. The challenge is to better engage them or the reality is that they’ll soon be some other fund’s member.

In the cases analysed, it was found 40 per cent of these passive members could be engaged with digital advice. Of that 40 per cent, 25 per cent moved through to actioning a Statement of Advice (SOA). That equates to 10 in every 100 passive members making some level of additional financial contribution.

One case in which engagement of passive members is particularly successful is where employers offer to match member contributions over the Superannuation Guarantee amount. In such circumstances, the average additional contribution was found to be $3,900 per member per year. That’s an additional $3.9 million in FUM for every 1,000 members in such circumstances.

Inactive members

In cases where members have had some level of engagement in the past but have never taken a real course of action, digital advice was found to be successful in re-engaging approximately 30 per cent.

When you consider the potential financial gain of the re-engagement for an average person contributing around $560 in additional revenue each year, that’s more than half a million dollars for every 1,000 re-engaged members.


The evolution of digital financial advice is quickly bringing greater levels of superannuation engagement within the reach of everyday Australians. And while individuals will appreciate their own personal financial gains from this experience, it’s at an enterprise level that significant benefits will also be realised.

It’s a viable investment for even the smallest superannuation provider given the low cost of a few dollars per SOA, while compliance overheads are flattened as the numbers scale.

As Decimal’s research shows, if you simply multiply the individual gains across the entire memberships of superannuation funds, the increase in FUA compounds significantly, accounting for many millions of dollars a year to the bottom line of the those providing the service.  


Nic Pollock

Decimal Software Ltd (DSX)


M +61 (0) 419 280 700

W +61 (0) 8 6151 1501  

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