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Super funds overhaul member communications
Superannuation funds are feeling the heat when it comes to how they communicate with members and will be spending more money to address the situation.
Frank Gullone, managing director of the Centre for Investor Education (CIE), said the past year’s market volatility is forcing super funds to “overhaul how they communicate with their members”.
He said “leading funds” are looking to implement strategies to achieve what members want from their funds, and will be spending more time, effort and money in order to do so.
“For many funds this will mean setting transparent return targets that consistently deliver real value and returns. If they can deliver that and, at the same time, keep costs low, then they believe they will be achieving what most members actually want,” he said.
Following on from a three-day CIE Major Market Players conference looking at investment trends and strategic asset allocation issues, Gullone said the issue of member communication was “a major theme” amongst delegates, trustees and fund managers from around the world.
“From what they were saying at the conference, peer pressure among funds sometimes can divert attention away from what really matters and that is the specific needs of their respective membership bases,” Gullone said. “The advent of rankings had led to many funds focusing on their short-term pecking order rather than the long-term objectives of their members.”
Gullone further suggested there was sentiment that fund members weren’t concerned about finishing in the top quartile with three-monthly performance measures.
“If those short-term performance ratings were really the issue, then we would have seen a lot more members switching funds since the advent of the choice of fund legislation,” Gullone noted.
“The fact that hasn’t happened suggests members are focused on the long ter and that should be reflected in the funds’ strategic directions. In fact, superannuation is a long-term proposition as it covers a working life of 30-plus years.”
AUTHOR
Amal Awad
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