Equip’s MyPension product was designed specifically to reduce risks – including behavioural biases – for the vast majority of its members who would never see a financial planner, delegates heard at an Investment Management Consultants Association seminar.

As Australians generally have very little financial literacy it was important to design a product that could be clearly communicated to help them through that retirement phase, said Danielle Press, chief executive of Equip Super.

“We spend an awful lot of time talking about ourselves, to ourselves, and pretend we are communicating with our members. We actually need to change the language so our members understand. We need to make complex things much more simple,” Press said.

“We’d like to claim this is the first robo-advice model in the country because it is an automated approach. It does try to mitigate some of the common behavioural issues we see in members, which happen all the time.”

She added the product was not a replacement for financial advice, rather it was a way to service the 80 per cent of Australians who would never see a financial planner.

“Our financial planners have been doing this [three bucket approach] for 15 years in this space, so we asked the question ‘how can we automate that and keep it simple?’” she said.

MyPension has now been taken up by 27 members, up from 20 in February, with a further 300 members registering an interest. The average account balance in retirement for Equip’s members is $480,000.

“If I did nothing about keeping my members in retirement I would lose a third of my assets over the next seven years. That terrifies me as I run a business. How do I make sure those people stay with me and we’ve still got a sustainable business model going forward?” Press said.

Press said Equip had a retention rate of 93 per cent across the whole fund, and probably closer to 97 per cent in retirement.

She added MyPension is fairly modular and the fund is looking at whether a longevity bucket should be included to “create an even more sustainable answer”.

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