Well it’s been quite a month or so, hasn’t it? First, Mark Latham goes missing and is subsequently found alive and unwell in Terrigal, then Charles decides to make it legitimate with Camilla — to mixed reviews, and just recently and sadly, there is the death of Arthur Miller, one of the world’s great playwrights.
None of these people had to worry too much about the evolution of superannuation in 2005 — in particular fund choice. Mr Latham will be well looked after on the Government pension that he successfully sought to downgrade for newer MPs. Charles is travelling very nicely, thanks to the British taxpayer, and Arthur Miller was a pretty rich guy prior to his death, although I’m not sure how much he paid out to Marilyn Monroe in alimony all those years ago.
Of more pressing concern is the bulk of the Australian workforce who are going to be confronted with an important decision in this and future years — “with which manager should I put my super?”
While Condoleeza Rice might be on a ‘charm offensive’ in Europe, be assured the majority of the corporate and industry funds are on an ‘information offensive’ throughout Australia to employers and particularly to employees to convince them of the virtues of their respective offerings.
It’s interesting to look back 15 or 20 years ago and consider the type of superannuation communication that members received in that era. Generally it was a one-page summary of moneys in, investment growth (if any), less fees and insurance costs. To be honest, a lot of people were lucky to receive anything and I suppose, one of the real benefits that has emerged from the plethora of superannuation legislation in the 1980s and ‘90s was that members were obliged to be fully informed of what was actually going on with their superannuation benefits.
The impact of the ongoing regulatory requirements, allied to old fashioned competition and market forces, has led to a huge increase in super awareness throughout the community. This has got to be a good thing, although I’m not sure how many of us read thoroughly through the masses of small print that increasingly surround every member statement.
More importantly, the member statement is no longer the sole provider of information to super members. With advances in technology, many members have virtually instantaneous access to information about their own situation and also general market intelligence across the whole industry.
The range of communication extends through:
n internet services, similar to banking arrangements;
n direct phone access via a variety of call centres;
n regular literature and updates distributed by mail.
And, in many funds, now the opportunity exists to attend ongoing seminars, information sessions and one on one meetings with financial advisers.
Just as significant is the development of relationships between the super providers and employer management. Many organisations now appoint client service managers to ensure a strong, continuing relationship at senior levels. Service plans are now becoming the order of the day where there are scheduled employer briefings, policy committee meetings (where member numbers dictate), investment updates, introduction to allied financial services such as banking, personal investment advice, mortgages and so on. And, of course, in special cases there is the odd convivial lunch and corporate entertainment. All this is part of cementing a relationship with an employer and with a commensurate flow-on of increased and better services for, and communication with, their employees.
The advent of fund choice adds a new dimension to the communication program.
While advice, updates and seminars will continue on apace, there will now be perhaps a greater element of fund self-promotion as new or different players come into the market and represent strong competition to the incumbent provider.
The aim of the exercise is very much to protect the existing client base from attack and at the very least have the provider declared as the appointed default fund. While it is thought there will be some leakage of the odd individual member account, it is seen as imperative to retain the confidence and support of the employer so the bulk of funds will remain secure.
To that end, the industry, through the multitude of providers, is adopting a huge information program to employers so they are fully informed of the ongoing machinations with the proposed regulations and how well they, as the provider, will be able to meet the variety of problems and issues that come to the surface in the new world.
Typically, a major cause of concern to employers is where they may be obliged to make multiple payments to an ever-widening group of funds. So the ‘clearing house’ provisions and the associated costs are being very closely scrutinised. The jury is still deliberating on the practicality of such arrangements.
In the meantime, Mark, Charles and the late Arthur can be thankful that they’re not going to be subject to ‘super communications’ — 2005 style, as they may not have the time to absorb it all.
— Lee Frankish is a superannuation industry consultant with long experience in customer relationship management.
