Those funds who have put in the hard yards educating members are likely to be rewarded in the current climate. Not only can ongoing education acclimatise members to negative returns, engendering loyalty and containing call centre costs, but it can also prompt more risk averse members to consider their objectives, and move to a more conservative investment option.
One strategy is to raise members awareness of the impending negative prior to the member statements hitting their mailboxes. Market commentary is other people’s money; the member statement is their own!
So what can trustees do? There is consensus on the basics:
• Warn your members about what’s coming, don’t leave it till they see the impact on their account, and don’t assume they don’t care;
• Focus on the long term, stress the cycle;
• Provide good quality information, without jargon or technical language;
• The more your members understand the reasons for your returns, the more loyalty they will exhibit. Conversely, if you don’t help them understand, they are likely to make a poor switching decision, or leave your fund altogether.
Many trustees and communications executives are looking for the silver lining in the negative returns cloud: that it may be a great opportunity to engage with your disengaged members. Rather than just smoothing members’ ruffled feathers, fostering genuine understanding of the drivers of fund returns might engender loyalty from members and make it an easier message next time markets turn down.
ACSI and AIST to co-host international corporate governance conference in Sydney next year
The International Corporate Governance Network will hold its annual conference for the first time in Australia next year with the Australian Council of Super Investors (ACSI) and the Australian Institute of Superannuation Trustees (AIST) to be co-hosts of the event.
The conference – to take place from 13-15 July 2009 at Sydney’s Hilton Hotel – is expected to attract more than 500 international delegates, drawn from ICGN’s 40-country membership, responsible for an estimated US$15 trillion in assets.
Michael O’Sullivan, president of the Australian Council of Superannuation Investors and one of about 30 Australian delegates who recently attended this years’ June ICGN conference in Seoul, South Korea said the Sydney conference should attract some of the world’s leading speakers across globalised investment markets and corporate governance. “Australia’s own record will be exposed to world-wide scrutiny,” he added.
The ICGN is based in London and brings together institutional and other investors, advisors, lawyers, academics and researchers from developed and emerging markets. Background, policies and interventions are available on the website www.icgn.org