Super Smart

Industry funds have pooled their resources to produce the TV advertisement campaign entitled, “Compare the Pair”. These ads feature individual workers talking about their super with one worker in an industry fund and the other in a retail superannuation fund. Inevitably, the industry fund member rises, either on an escalator or a lift, in a symbolic representation of a higher account balance at retirement.

Marketing research has shown these ads to be very successful in achieving the goals of building awareness of industry super funds, building loyalty to participating industry funds and retaining membership in industry funds.

As all employees now have a choice of which super fund to contribute to, it is important that super funds provide education so that member investment choices are informed, rather than haphazard. The “Compare the Pair” ads stress the importance of fees on retirement savings over a period of time. Assuming the investment returns are the same, it is obvious that the lower fee fund will provide a greater retirement benefit.

In the changing landscape of investment markets, however, superannuation fund members need both education and reassurance that their retirement benefit will not erode with declining markets. The industry fund campaign will take a leadership role in this direction by using former Reserve Bank Governor, Bernie Fraser, to present its message on TV in an “Address to the Nation”. This brief talk will be run in mid-October on Channel 7, 9 and 10 and will take approximately three minutes. The campaign will continue from that time.

The key point will be that superannuation is a long term investment and that market volatility should be expected from time to time. Another obvious message will be that in times of market decline Australians are better off in an industry fund because of their lower fee structure, no commission ethos and not-for-profit philosophy. Research has shown that industry funds are the fastest growing sector of the super industry and the “Compare the Pair” ads have no doubt contributed to this growth.

The industry fund logo will be the focus of the media campaign and the question will be posed as to whether “your” fund bears this logo. The symbol represents the benefits, such as lower fees, a larger retirement balance and no commissions, available to the individual via participation in an industry fund. It will be used increasingly to reinforce this important message.

As account balances grow over time due to the introduction of compulsory super, member interest in their fund will increase. It is the legal and moral responsibility of super funds to provide education, leadership and, most importantly, the maximum account balance at retirement.

It will be interesting to hear what the Sandman has to say about industry super!

Disclaimer: the information in the above article is of a general nature only. It does not constitute personal financial planning advice as your personal circumstances are unknown to the author. If you require personal financial planning advice, you should consult a licensed financial planner.