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.

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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.”

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Sam Monteath

The customer experience of Super fund members declined in all key measures, and retirement empowerment weakened, the latest results of the CSBA FEAL Superannuation CX Benchmarking report has found.

The report, comprising surveys of 5,426 individual fund members from 20 Superannuation funds conducted in July and August 2022, also found that only 59% of those aged 55 and over had a high degree of confidence they would have enough money for a comfortable retirement.

Net Promoter Score (NPS) for All Funds included in the study dropped 11 points from +26 to +15, compared with the same period in 2021.

Overall Satisfaction fell from 8.1 to 7.7; Ease of Dealing fell from 8.3 to 8.0; And the Likelihood to switch funds rose from 17% to 23%.

One in three members disagreed that their fund empowered them to plan and prepare for retirement, compared to one in four members in 2021.

And the confidence of having enough money for a comfortable retirement was low, scoring 6.6 out of 10. This dropped to 6.3 for females (6.9 for males) and 5.7 for members without recent fund contact (6.6 for members with recent fund contact).

CSBA CX Director of Finance, Sam Monteath said that while it was no surprise to see current market volatility negatively impact member sentiment, it was now crucial for funds to proactively offer members reassurance using timely and meaningful interactions.

“Acknowledging members’ specific concerns in the current climate; transparent communication around investments and fees; and age-appropriate communication using their channels of choice, are key to building trust and loyalty,” she said.

“Especially since ‘Trust’, ‘Excellent Financial Returns’ and ‘Making Members Feel Valued’ continue to be the top three key drivers of Overall Satisfaction and NPS.”

Intention to switch is on the rise

When asked about their past switching considerations and intentions to remain with the fund in the year ahead, 25% of members with recent fund contact said they had considered switching funds in the last 12 months. And of those who considered a switch, 63% said they were likely to complete the switch in the next 12 months. Compared to the same period last year, 18% of members considered a switch, and 49% of those intended to switch in the year ahead.

The 35-44 age group is at the highest risk of switching, with 30% indicating they were likely to switch in the next 12 months, compared to 22% in the same period last year. The 25-34 age group is also a high-risk group, with 26% indicating they were likely to switch in the next 12 months (unchanged from last year).

Trust featured heavily as both a key reason to stay with a fund long-term (24%) and as one of the most apt descriptors of one’s fund (29%) – “I trust them to act in my best interests.”

Retirement empowerment has weakened

In the area of retirement empowerment, 33% disagreed that “The fund empowers me to plan and prepare for my retirement” compared to 27% in the same period in 2021.

Across the demographic groups, under 55s, females, shorter term members and those in a default investment mix were more likely to disagree their fund empowered them.

The power of making meaningful interactions

Timely and meaningful interactions are critical in adding value, building trust and loyalty.

“Be proactive. Use the right customer insights, personalise your approach and create timely opportunities to engage each customer,” said Ms Monteath.

“Members want relevant information and reassurance that they are with the right fund for them.”

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Sam Monteath

The customer experience of Super fund members suffered a substantial fall, the latest results of the CSBA FEAL Superannuation CX Benchmarking report has found.

Customers were impacted in part by the announcement of the failures of the APRA performance test of MySuper products, and increased merger activity in the sector, said CSBA CX Director of Finance, Sam Monteath.

The report, comprising surveys conducted in February and March 2022, found that the Net Promoter Score (NPS) for All Funds in the study dropped 11 points to +15 from July 2021. Overall Satisfaction fell to 7.8 – its lowest since February 2020 (when the pandemic hit, and sentiment deteriorated). And Ease of Dealing saw a similar pattern.

The survey responses were collected from 5630 individual fund members from 20 superannuation funds. Online surveys of members of large funds were also completed to provide further benchmarks.

The impact of negative news and merger plans

Explaining that uncertainty among members and the use of the media and third-party sources impacted Sentiment, Monteath said it was more important than ever before, that funds communicated directly and clearly with members.

“With members continuing to rank Trust as the key driver of Overall Satisfaction, it was no surprise to see a decline in Sentiment across key metrics across the sector,” she said.

“Loyalty was also in decline. Switch consideration in the past 12 months, as well as likelihood to switch in the next year increased by five and six percentage points respectively.”

All demographic groups, except for longer tenure members, saw at least one in five being likely to switch funds in the next year, though for female members, and those under 55, this rose to one in four. 

Key drivers

Trust and Excellent Financial Returns remained the key drivers of Overall Satisfaction and NPS (advocacy). However, the average member rating for Trust fell sharply by 0.5 points, from 8.4 to 7.9, compared to July 2021.

The relative importance of Trust (15%) and Excellent Financial Returns (13%) as key drivers of Overall Satisfaction increased by one percentage point each; while the relative importance of Trust as a key driver of NPS (advocacy) increased by three points and is now equal to the main driver, Excellent Financial Returns (17%).

Making Members Feel Valued remains the third key driver (12%).

Retirement empowerment

In the area of retirement empowerment, female fund members had the lowest agreement across all the demographic cohorts, with over one-third (35%) disagreeing with the notion that their fund empowered them for retirement. This rose sharply from 27% in the previous survey (July-August 2021). Agreement among younger fund members also fell further; 34% disagreed their fund empowered them to plan and prepare for retirement (from 31%).

Younger members rated lower than their older counterparts, with the average satisfaction at 7.6 out of 10. Younger members are typically more difficult to engage as retirement is often considered too far in the future with action appearing less tangible due to the long-term nature of super and retirement investments. Younger members also often have competing priorities, cost of living pressures, and lack of knowledge regarding superannuation, which all contribute to less loyalty.

The importance of Reassurance

Effective communication is key to rebuilding trust and loyalty among members.

“Don’t shy away from discussing trust in a climate of volatility,” says Monteath. “Put a human lens on the topics that are important to members. Be specific – use relatable examples that engage with your different member cohorts.”

“Members want proactive information and reassurance that they are with the right fund for them.”

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