By Rachel Alembakis
MELBOURNE Australia — Institutional superannuation funds are changing and adopting more retail characteristics, including providing ancillary services such as insurance and financial advice.
The 2005 introduction of fund choice, which gave workers the right to choose their superannuation funds and forced those funds to market to new and existing members, has changed the way in which members and their institutional superannuation provider — be it a corporate provider, an industrywide fund or a public sector fund — view each other.
While their investment strategies haven't changed, institutional funds have had to raise their communication efforts.
"We advertised for the first time in 2005," noted Teifi Whatley, general manager of marketing at the A$10 billion (US$7.9 billion) Sunsuper Pty. Ltd., a multisector industry superannuation fund based in Brisbane.
"Because we have over 900,000 members, it's difficult to reach them all. So the way we approached this was to say to our members, ‘You've made a good decision, you're in a good fund and we're looking after it for you.' Our slogan was, ‘You look after your life, we'll look after your super.' It was not an acquisition campaign by any stretch — it was designed for our Queensland members to tell them they're in the right place."
The idea that an institutional superannuation fund would have to advertise and play up its brand awareness is a recent but widespread phenomenon.
"If you look back historically, apart from the obviously commercial-type retail funds, most funds had a very close connection with their members — either the public sector funds or the industry funds in their particular sector, or if you had a corporate superannuation fund," said Andrew Boal, managing director of Watson Wyatt Australia Pty. Ltd. in Melbourne. "What we are seeing is that in the environment of choice, and with the financial consolidation of large industry superannuation funds, you are creating financial behemoths such as AustralianSuper," he said, referring to the A$20 billion Melbourne-based AustralianSuper Pty. Ltd. "With that, industry superannuation funds in particular are at risk of losing the brand connection with their members and so must become more like a retail fund to continue to succeed."
As part of this push, funds have either established or augmented financial planning services, areas once seen as the domain of the retail side. Sunsuper has recently delved into redesigning its financial planning services to offer advice through call centers.