The regulator says an industry roundtable found advisers and super funds need to up their game when it comes to talking about super with Millennials.
On Monday, the Australian Securities and Investments Commission (ASIC) released a summary report of a Moneysmart roundtable on the need for greater services, transparency, and improved access to information within superannuation to better engage Millennial members.
The roundtable, which was hosted by finance journalist Effie Zahos, included:
- Simone Constant – ASIC commissioner
- Victoria Devine – host of the ‘She’s on the money’ podcast
- Andrew Dunbar – senior financial planner and director at APT Wealth
- Queenie Tan – financial content creator
- Dr Angel Zhong – associate professor of finance at RMIT University
ASIC said the panellists noted that “as the largest generation in the workforce, the current language and approach to superannuation is outdated and disengaging for Millennials”.
“Superannuation is one of the largest investments many Australians have or will have in the future. The way many super funds and advisers talk about super is a barrier to Millennials understanding or engaging with it, according to panellists,” ASIC said in the summary.
“The panellists agreed that language and terms such as ‘retirement planning’ and ‘pensions’ were not engaging for Millennials.”
Devine said: “The language of ‘retirement planning’ is inherently unengaging for Millennials. Millennials need to think of super as a tool that helps create financial freedom or creating the life you want to live, or the life that you deserve.”
The broader superannuation industry needs to do a better job of making super “tangible”, according to Dunbar.
“We need to show people where their money is invested. Make it less about ‘superannuation’, more about tangible investments,” he said.
ASIC said that recent Moneysmart research found that 48 per cent of Millennials surveyed are not knowledgeable about maximising their super.
“Despite being the first generation to enter the workforce with compulsory superannuation from day one of their working lives, Millennials are less engaged with their super compared to previous generations,” the regulator said.
“The roundtable convened by ASIC identified a significant transparency gap, with panellists suggesting super funds are failing to meet the expectations of their Millennial members.”
The panellists also said that Millennials are a diverse group in how they access information around super and their level of engagement.
“Financial literacy is a cornerstone for how many Millennials approach their super. Many are taking active steps because they understand the importance of financial literacy and they want to be informed, but not in the traditional ways of obtaining financial advice,” Zhong said.
Devine said: “What I’m seeing in my community is that Millennials sometimes have a head-in-the-sand mentality that comes from a disconnect between themselves and what they’re seeing their parents go through.”
ASIC said that following the roundtable, Moneysmart would launch a consumer awareness campaign aimed at Millennials.
“Millennials are willing to plan and engage with data for their long-term physical wellbeing and health,” Constant said.
“Now is the time to see Millennials engage in the same way with their long-term financial health through their super. The tools and information on ASIC’s Moneysmart website are a great place to start for anyone who is keen to take small steps that compound over time and achieve their future goals.”
