Blame it on laziness
But the vast majority of dormant members put it down to their own laziness. It is instructive to consider Sigmund Freud’s ‘pleasure principle’ when attempting to understand why so many Australians are disengaged from what will inevitably be a key determinant of their quality of life in retirement. The concept is pretty simple: people seek pleasure and avoid pain. This helps explain why most of us eat fatty foods, drink alcohol and exercise too little. So what can super funds do to counter the pleasure principle? It’s no surprise that the most popular method of member retention, as voted by the members themselves, was to reduce fees and charges.
Reduce and retain
This option was selected by almost two in five respondents (38.2 per cent). However interestingly, showing keenness for their business (25.7 per cent) and more frequent contact (24.1 per cent) also rated highly. Information seminars were highly valued by those whose funds offered them – and those whose didn’t expressed a strong desire for information and guidance, contact (beyond receiving an annual statement) and a more personal relationship with their fund. While HostPlus’ recent opening of a “super banking” branch in cooperation with Members Equity Bank might seem strange in light of the move by many banks and institutions away from face-to-face banking in favour of online services, it is exactly these types of services that super members are looking for.
More than 85 per cent of respondents said they would like their super fund to provide them with advice and guidance; a figure that is arguably, in part at least, an outworking of the GFC. The hunger for information comes with a growing level of awareness of and attention paid to superannuation that may or may not last. Super funds have a limited opportunity to expand their relationships with inactive members and in doing so, must take some responsibility for member inertia.
But it won’t be easy. Today’s consumers are looking for utility in their financial services relationships, and unless they can clearly see the benefits of reactivation, they are unlikely to do so. Funds that are successful in re-engaging their inactive members will be those that focus on articulating value, clearly outline the member benefits and reach out to dormant members in a personalised way.
