The intangible prospect of retirement – particularly for younger customers – is one of the major challenges to cultivating engagement when it comes to superannuation fund performance.
Although communication is critical, telling a customer their fund outperformed 50% of superannuation funds in the industry during the last three years provides no meaningful information about whether that customer is closer to a comfortable retirement. Instead, the focus should be on whether the fund is on track to meeting its objective.
Taking a lifecycle fund approach such as AMP MySuper– where customers are grouped according to their age – gives us the ability to design and deliver communication around customers’ retirement needs at any particular life stage. The key success metric – embedded into customer communications – should emphasise these needs.
Communications can directly reflect how each age-based group is managed. While communications are likely to initially speak to the average member in one of these groups, we envisage that future iterations will focus on individual customers’ circumstances (and potentially also include assets outside of super). An expected income in retirement (in today's dollars) is far more relevant to customers than a current lump sum dollar value. This might also serve to dissipate investor concerns about short-term volatility, as it helps to remind customers that superannuation is a long-term investment.
We aim to talk directly to customers about the action they can take to ensure they meet their goals in retirement, whether that’s increasing their contributions or planning to work a little longer.
Important note: While every care has been taken in the preparation of this article, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided.