Frank Gullone explains the reinvention of Professional Associations Super as Kinetic Super, and its omnipresent online brand awareness campaign.
The promotion of Kinetic Super as the new name for Professional Associations Super – along with its distinctive light blue, light red and white branding – has been hard to ignore over the past nine months. Towards the end of 2013, there was a promotional event aimed at engaging members about finding lost super held in Martin Place, Sydney (another was held in Melbourne), involving a large container of blue, red and white balls, and a cheery presenter with a microphone. But it is the online remarketing strategy to those that have visited the fund’s website, which has been the most ubiquitous, appearing on both domestic and international news websites, in emails and in unlikely places, such as websites featuring the best places to drink and eat. For Frank Gullone, chair of Kinetic Super, this has all made perfect sense as a way of telling 350,000 members about the new identity of their fund and its purpose, in a world where many funds are deciding whether they have the scale or customer longevity to continue.
“The core of survival is relevance. As soon as you lose relevance with your membership base you do not survive,” Gullone says. “We were determined to not only retain relevance, but to extend the relationship with our members, increase the engagement, to improve on the experience even further.” The new name, Kinetic Super, he notes, embodies the ethos of moving forward.
“The brand basically gives the story in two words, being fairly energetic and keeping up with a transient mobile workforce,” he says.
One of the key threats to Kinetic Super were the separate identities it used, including Professional Associations Super, RecruitmentSuper, Accountants Super, Australian Enterprise Super and SMARTpension. As well, there were 16 different PDSs, a mix of custody arrangements and fees, plus a membership base who were not really sure if they could stay in their superannuation fund if they changed jobs.
All this change and planning comes naturally to Gullone, who was previously chief executive of Superpartners from 2002-2007; who currently sits on the board of Indue, a provider of credit and debit cards, electronic payment and financial systems; and who runs a strategic management consultancy business, Gullone Group.
“My lifeblood is driving strategy going forward and being as efficient as possible in not only the design but the implementation of strategy,” he says.
Low fees
For Gullone, the fund is worth fighting for, due to the economies of scale that 350,000 members bring; its top-quartile investment returns – its growth fund achieved 10.59 per cent for its growth option over five years; and a recent three-year insurance deal that compares well to other funds.
“In terms of the fees they pay, it is less than a cup of coffee every week,” he points out. And the investment MER is one of the lowest in the industry at 0.43 per cent.
The advertising campaign is currently under review and may evolve, but its online identity will live on. Gullone talks of a not-too-distant time when smartphones become like wallets and when social networks are even more powerful.
“We have to be relevant to that market, for a generation of people who want to take their super with them,” he says. He promises an initiative that will accelerate this engagement even more.
Mergers
Now that the brand has been created and the fund positioned for the future, it is on the lookout for growth. Gullone chairs the mergers and acquisitions committee at Kinetic Super, but admits it is getting harder to find suitable partners. The drive is not to lower fees, but to gain scale – its investment team of three is high-performing but lean. Its strategy has a high passive weighting directed by Towers Watson, but there could be change ahead.
Gullone says: “There is a lot of passive, but there is a discussion on whether that is the correct focus for the fund going forward given the demographics of the member base.”
The average age of a fund member is 35, and the fund could take more illiquid or high-growth investment in theory, but it is difficult to change a successful strategy.
“Our investment returns have been in the top quartile for the last five years, so we do not want to throw that out. We do not want to incur more cost for the same outcome,” he says.
One area of definite change will be in post-retirement choices. The fund has a single pension product, which has not been pushed that much because of the low average age in the fund. Here, Gullone is open to the currently popular model of offering annuities alongside more advanced income drawdown and investment mixes for members in retirement.
Kinetic Super board
Frank Gullone became the first independent chair of the fund in November 2012. This increased the board’s size from six (three employer and three employee representatives) to seven.
The fund then identified the need for an investment professional and in November 2013, Nancy Fox was appointed as an employer representative, after being headhunted. This has created something very close to the one-third, one-third, one-third structure that the government would like to see.
This year, the term of an employee representative will come to an end and the vacancy will be advertised, with a specific skill laid out. The new person in this case is decided by election, but trustees can serve two six-year terms if reappointed.
Chant West statistics for Kinetic Super
| Growth (MySuper) option (% pa) As at 30 June 2013 |
|
| 1 year | 14.6 |
| 3 years | 9.5 |
| 5 years | 4.8 |
| 10 years | 6.5 |
| Net contribution flows ($m)2012-2013FY | 152 |
| MembershipAs at 31 December 2013 | 346,000 |
| Assets under management ($m) as at 31 December 2013 |
2,595 |
| Proportion of assets – Growth (MySuper) default (%) as at 31 December 2013 |
85 |
