Sam Monteath

The latest CSBA FEAL Superannuation Experience & Engagement Benchmark with fresh attitudinal insights garnered from additional survey questions, has found that Running out of money was the top concern for 18% of members, increasing to 25% for those aged under 35.

Following close behind, Inflation and the rising cost of living, concerned 17% of members. However, for older members aged over 55, it was the top concern (22%).

For retired fund members, Inflation and the rising cost of living was their top retirement concern (24%), followed by Running out of money (16%), and Cost of health and aged care (14%).

The six monthly CSBA FEAL research surveyed 5,932 individual fund members from more than 100 Superannuation funds. Conducted in March 2024, the latest program included a range of new questions that expanded our exploration into member attitudes and behaviours around retirement.

Measuring member attitudes and behaviours

“Attitudinal and behavioural insights are critical if trustees are to make inroads into targeted member engagement, said CSBA CX Director of Finance, Sam Monteath.

“Demographic analysis is not enough. Funds must continue to innovate, to effectively engage with at-risk segments. And it starts with sound insights.”

Explaining the importance of introducing additional layers of understanding, Monteath said: “This latest research provides a more holistic view of member sentiment than ever before, across all member cohorts regardless of their level of fund contact.”

Retirement sentiment

New research found that while overall sentiment was evenly spread between positive and negative feelings, there were startling variations among cohorts.

Younger members aged under 55 were more negative about retirement (57%) than their older counterparts (36%). In fact, ‘Uncertain’ was the most common feeling selected by those under 55 (26%) compared to 22% of All members.

Female members were over three times more likely (7%) to feel ‘Overwhelmed’ than males (2%). Similarly, younger members aged below 55 (6%) compared to older members aged over 55 (2%).

On a positive note, ‘Hopeful’ was selected by 20% of members and ‘Secure’ was selected by 15% of members. However, ‘Hopeful’ was expressed by only 17% of older members over 55 and 16% of retired members, while ‘Secure’ was expressed by only 8% of younger members below 55. (24% for those aged over 55 and 35% among those retired).

Retirement confidence

The weakest cohorts were those in the middle age and pre-retirement groups, with 35 to 44-year-olds at 5.9 out of 10 and 45 to 54-year-olds at 5.8 out of 10; compared to 6.3 for All members.

The study also found significant differences between females (6.2) and males (6.6) and members with Default (6.1) and Custom investment mix (6.9).

Retirement priorities

The top three retirement priorities were Financial security, followed by Health and wellbeing, and Lifestyle goals.

Behavioural statements

Agreement with behavioural statements in the study was low. The statement ‘I am actively engaged with my super including investment mix, fees and insurance’ received the lowest score, with agreement at 3.3 out of 5. There was also no indication that older members aged over 55 were more actively engaged.

Start deep-diving now

As revealed in the APRA ASIC report on trustees which found alarming gaps in analysing, tracking and integrating strategies to meet members’ income needs in retirement, Monteath says much more needs to be done to empower members.

“Trustees must develop attitudinal and behavioural understanding at a granular level, to truly support members for the best possible retirement,” she said.

In this latest study, members indicated that the top three areas where they wanted improvement were: Better proactive communication; Pre-retirement plans; and Personalised information and advice.

Meanwhile, members named Clear guidance and advice; Retirement planning seminars; and Handy projection and modelling tools as the most helpful services to prepare for retirement.

“These new insights reveal how much more opportunity exists to better engage with members and support them earlier on the retirement journey,” said Monteath.

The post Running out of money, rising cost of living are top retirement concerns: new CSBA research appeared first on AdviserVoice.

Sam Monteath

Results from the latest CSBA FEAL Superannuation CX Benchmarking report showed a significant rise in member loyalty over a six-month period.

The report, comprising surveys of 7,202 individual fund members from more than 100 Superannuation funds conducted in July and August 2023, found that Intention to Switch improved from 25% in February and March 2023 to 18% overall (down seven points). Intention to switch was at 23% in both the February/March and July/August 2022 reports.

“The tide has finally turned with loyalty at its strongest in three years,” said CSBA CX Director of Finance, Sam Monteath, explaining that improved financial performance was a key factor.

“Those at the highest risk of switching, referring to members who gave a rating of 9 and 10 out of 10, fell from 9% to just 5% – the lowest level we’ve seen since 2018,” she said.

In terms of demographics, Intention to Switch fell across all member segments, although members with a Default Investment Mix improved the most – falling 14 points from 31% to 17%. Shorter tenure members (in their funds for less than five years) fell 10 points from 32% to 22%, and younger members (aged below 55 years) fell nine points from 32% to 23%.

“Outside of performance and returns, Trust (26%) and Competitive Fees and Charges (23%) were the single most important factors driving loyalty, with both factors at their highest levels in the four years since measurement started,” said Monteath.

Underestimate the middle-aged segment at your peril

Overall results were on an upward trend in the last six months, with Overall Satisfaction moving from 7.7 to 7.9; Ease of Dealing from 8.0 to 8.1; and NPS from +15 to +17.

However, those aged 45 to 54 years, approaching retirement, remained the weakest when it came to Member sentiment, rating lowest on almost every Customer Experience (CX) metric and attribute. Namely:

• Overall Satisfaction at 7.4 (compared to 7.9 overall)
• NPS +4 (compared to +17 overall)
• Feel Valued 6.9 (compared to 7.3 overall)
• Retirement Empowerment 64% (compared to 71% overall)
• Retirement Confidence is 6.1 (compared to 6.5 overall).

Monteath said there was a large untapped opportunity for funds to sharpen their focus on members who were approaching retirement.

“The Retirement Income Strategy is an obvious starting point,” said Monteath. “However, the critical question that trustees must ask themselves is: how much do I know and understand the members in this segment?”

A recent review by the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) found that 12 out of 15 trustees acknowledged gaps in critical member data and only four were found to have concrete plans in place to address these data gaps.

“The effectiveness of any program will depend on the depth of your understanding into the behaviour and attitudes of your members” she said. “Good engagement can only be built on a sound knowledge base.”

Quality of service attributes get the lowest scores

‘Making me feel like a valued member’; ‘They proactively help me understand everything I need to know about my super’; and ‘When I contact the fund, they go the extra mile’ scored the lowest among all measured attributes at 7.3, 7.3 and 7.4 out of 10 respectively.

Putting the results into context, Monteath explained they were weaker than financial attributes which usually scored the lowest.

“Comments from members who regarded their fund highly on going the extra mile cited clear service-related themes such as personalised service, knowledgeable staff, and efficient response times,” she said.

Meet members where they’re at

As Monteath explains, the CSBA FEAL report has clearly shown a gap in engaging with at-risk segments including those nearing retirement. Similarly, the APRA ASIC report found that most trustees in their study had not conducted an in-depth analysis of their members’ income needs in retirement; not used any metrics to track effectiveness; and not integrated retirement strategies into overall strategic and business plans.

“Now’s the time for funds to act. They need to dig deep using independent qualitative research. This will allow them to understand the attitudes of all their member cohorts, to deliver exceptional experiences that add value and support,” said Monteath.

“The Retirement Income Strategy is a huge opportunity for purposeful engagement with those in or nearing retirement. Schedule information sessions; offer personalised attention; give them access to subject matter experts – meet them where they are.”

The post Loyalty among Super fund members at its strongest in three years appeared first on AdviserVoice.