ENGAGING MILLENNIALS ARE THEY REALLY THAT DIFFERENT? - Edition 21 - January 2018 - Australian Institute of Superannuation ...
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AIST Member Newsletter Edition 21 – January 2018 ENGAGING MILLENNIALS ARE THEY REALLY THAT DIFFERENT? Untapped opportunity AIST Award Interest soars for in contact centres winners responsible investing 13 18 20
AIST Advocacy
– helping shape
super and retirement
outcomes
AIST’s advocacy aims to improve the retirement outcomes of the millions of
working Australians who belong to profit-to-member funds. Our recent and
ongoing advocacy and policy work includes:
`` Effective engagement with members `` Engaging with regulators and other
of Parliament on the value of the equal stakeholders on ways to ensure
representation system Indigenous communities get a better
deal from super
`` Ensuring that members of profit-
to-member funds get a fair deal on `` Strong media coverage across TV, radio,
insurance print and online on retirement trends,
unpaid super and other key consumer
`` Appearing before Parliamentary issues
inquiries on insurance and other key
policy matters `` Active participation in the super gender
gap debate, including highlighting
`` Ongoing engagement with regulators the need to remove the $450 monthly
about the need for effective fee and
income threshold
cost disclosure
`` Thought leadership on housing `` Support for the Women in Super policy
of a $1000 super boost for low income
affordability and its impact on
earners
retirement
`` Strong support for the existing default `` Ongoing consultation with the ATO on
the development of an online choice
fund selection system which we believe
form for consumers
serves working Australians best
`` Research that highlights the superior
performance of profit-to-member funds
and why they are different
`` Launch of a new AIST Governance
Code to promote best practice in the
profit-to-member industry
AIST Member Newsletter
CONTENTS
Edition 21 – January 2018
From the CEO
02
Super news
03
Cover story – Are millennials all that different?
10
Untapped opportunity in contact centres
13
10 Investment Rising Star Award winner
14
The big data challenge
15
Strong super gains boost confidence
17
AIST Awards 2017
18
Interest soars for responsible investing
20
20 HESTA taps into demand for dementia care
22
ASI 2017
24
Young Super Network continues to thrive
27
Reflections from resigning REST CEO
28
Loyalty the key – Maritime Super turns 50
29
22 Member news
30
EDITORIAL: COPYRIGHT:
Editorial Team: Janet de Silva No part of this publication may be reproduced, stored in a retrieval
Further info 03 8677 3800, jdesilva@aist.asn.au system or transmitted in any form or by any means, electronic,
Graphic Design: Renae Tindill mechanical, photocopied, recorded or otherwise without the permission
of the publisher.
@aistbuzz DISCLAIMER:
Australian Institute of Superannuation Trustees AIST does not necessarily recommend the products and services
advertised in SuperTalk. All details were correct at the time of printing.
SUPERTALK – January 2018 01
From the
CEO Eva Scheerlinck
Chief Executive Officer, AIST
AIST has long been concerned about it is to achieve and maintain gender chief executive Ian Silk is WGEA Pay
the gender retirement gap. While the balance within highly paid, and male- Equity Ambassador, is one fund that
problem is complex and difficult to dominated, investment management has been proactive in trying to tackle
solve, AIST and others in the profit- and information technology teams. the gender pay gap. As reported in our
to-member super family continue to story on page 4, the fund is committed
advocate for super policy reforms to "Gender diversity brings to eradicating the gap in its investment
improve the retirement outcomes for team, but admits it is difficult to attract
women. numerous benefits" women into investment roles. Cbus is
Part of the problem, of course, another fund that has taken action on
is the gender pay gap. The less you Many trace the problem right gender equality. The fund has reported
are paid, the less super you generally back to the low take-up of maths slashing its gender pay gap by 68 per
receive from your employer. and science subjects among female cent over the past five years. Cbus CEO
While many people are aware that students in schools and universities. David Atkin is also a WGEA Pay Equity
Australia has a national gender pay gap We see evidence of this in the AIST’s Ambassador, as is HESTA CEO Debby
of about 15 per cent, it may come as long-running super graduate program, Blakey.
a surprise to many in our industry that where male applicants for graduate Australia-wide, financial services is
the pay gap across the financial sector investment roles far outnumber the third best-paid sector for women.
is the widest of all – almost double the females – typically by a ratio of at least Other top-paying industries, like
national average. 10 to 1. mining and technology, are also male-
Using Australian Bureau of But there are also problems at dominated, while female-dominated
Statistics data for 2016, the Workplace the top. WGEA research showed industries, like teaching or nursing,
Gender Equality Agency (WGEA) that organisations with balanced pay less.
recently calculated the gender pay gap representation of women in executive But relatively well paid or not,
in the financial sector at a staggering leadership roles typically have half the there is simply no excuse for like-for-
29.6 per cent. pay gap of organisations with minimal like gender pay gaps in our sector.
Why this is the case despite the female leadership. On average, the Gender diversity brings numerous
prevalence of so many talented and managerial gender pay gap is about 15 benefits to an organisation. We must
confident women working in our per cent at firms where 20 per cent of not lose momentum in fighting the
financial and insurance services sector managers are female, and falls steadily grossly unfair systemic discrimination
is as perplexing as it is complex. So, to 8 per cent at companies where 80 against women, through which not
what can be done about it? per cent of managers are female. only women – but society and the
In instances where women AIST recently completed research economy as a whole – suffer.
are being paid less for performing into gender diversity among our
work of the same value, the case member funds. While the research
for immediate action is clear. Where was not designed to examine pay
direct discrimination is not to blame, levels, an analysis of the talent pipeline
determining the right course of action across the 16 profit-to-member funds
is less obvious. Within the super involved revealed funds are still hiring
industry, human resources managers more men than women for senior
routinely point out how challenging positions. AustralianSuper, whose Eva Scheerlinck
02 SUPERTALK – January 2018
BUMPER YEAR FOR PROFIT-TO-MEMBER FUNDS
SUPER NEWS
Super funds posted double-digit gains in 2017 for the first
time in five years, with profit-to-member funds once again
the top performers.
The average balanced super fund recorded a rise of
10.5 per cent in the 12 months to December, according
to SuperRatings research, with top-performing profit-to-
member funds recording returns nearer to 15 per cent. Key
drivers were a strong local market and a falling Australian
dollar in the latter part of the year which helped boost
returns for funds’ international share exposures.
Notwithstanding the stellar returns, experts are
cautioning fund members about becoming complacent in
saving for retirement.
Many commentators are forecasting lower returns in
Returns were well above most fund’s objective.
coming years and advising fund members to consider making
voluntary contributions where possible.
2017 returns were well above most fund’s investment decade of 5.1 per cent remains relatively low in historical
objectives of CPI plus 3.5 per cent target. However, the terms, due to a large negative return from 2008.
average annual return across all super funds for the past
WIS ON THE CAMPAIGN TRAIL TO TACKLE RETIREMENT
SAVINGS GAP
Networking and advocacy group,
Women in Super (WIS) has launched
a new campaign to tackle the gender
retirement savings gap.
At various events around the
country, WIS has outlined its ‘Make
Super Fair’ policy that includes
removing the $450 monthly income SG
threshold and providing an additional
$1,000 annual contribution of super to
low income earners.
"The policy could mean
as much as $30,000
extra in retirement"
Shining a light on the gender retirement gap with 3D imagery at the WIS Melbourne launch.
The campaign, supported by AIST
and many industry funds, includes
engaging with politicians and women’s
organisations as well as unions and provided by ISPT-owned Foys Arcade with supporting funds to highlight
community groups. to highlight the data and statistics the challenges faced by women
Speaking at the Melbourne launch underpinning the policy. and the provision of materials for
of the campaign, WIS chair Cate Wood, Since then WIS has met with a dissemination.
said if the government adopted WIS’s wide range of politicians, women’s Funds who are actively supporting
policy the difference could mean as organisations, unions and community the campaign include AustralianSuper,
much as $30,000 extra in retirement groups to discuss the policy and CareSuper, Cbus, HESTA, Hostplus,
savings for a low income earner. broaden support beyond the LUCRF Super, Media Super, MTAA
The Melbourne launch took full superannuation industry. 2018 will see Super, REST Industry Super, UniSuper,
advantage of the 3D space and imagery WIS participate in a number of events and Vision Super.
SUPERTALK – January 2018 03
TREKKING FOR MATES
SUPER NEWS
Cbus coordinator Steve Gaske recently tackled the Kokoda
Trek to raise money for suicide prevention programs run by
MATES in Construction.
The trek took walkers down the Kokoda Track – the
location of the 1942 World War II battle between Japanese
and allied forces in Papua New Guinea. Over 500 Australian
soldiers are believed to have been killed in battle and more
than 1,000 wounded in action.
The gruelling nine-day trek raised more than $130,000
for MATES in Construction – a charity established in 2008
to reduce the high level of suicide among Australian
construction workers.
Mr Gaske said that it was a truly incredible experience
for a great cause. The nine-day trek raised more than $130,000.
“I discovered pretty early on that this trek was going
to be more than a light stroll – it was tough going from partnership is reflective of the fund’s commitment to
start to finish,” said Mr Gaske. “I definitely have a lot more members’ wellbeing.
understanding and respect for what the diggers went “Cbus is proud to partner with MATES in Construction,
through to defend our patch.” to support their work in reducing suicide rates, and
Cbus has long been a supporter of MATES in improving mental health and wellbeing within the Australian
Construction, regularly fundraising and promoting their construction industry,” said Mr Atkin. “MATES offer an
programs to members. important industry led approach to an industry problem,
Cbus CEO David Atkin said that the longstanding where it’s all about MATES helping mates.”
AUSTRALIANSUPER TACKLES GENDER PAY GAP
AustralianSuper has joined more than boardrooms, executive suites and the
100 businesses to publicly commit to factory floor. People must be paid
closing any gender pay gap in like-for- equally whatever their gender.”
like roles within their organisations. Mr Silk believes that reducing the
The Male Champions of Change pay gap will have a number of benefits
initiative runs alongside the release – including increasing workforce
of their Closing the Gender Pay Gap participation.
report that offers a step-by-step guide “If women are paid the same as
to ensuring equal pay for equal work. men then that will encourage them
Member of Male Champions of to join the workforce, re-join the
Change and AustralianSuper CEO Ian workforce after a break and stay in
Silk said that the 15.3 per cent pay gap the workforce. It is vital this occurs
identified in the report is staggering, to maintain Australia’s economic
as is the fact that the gap has stayed competitive advantage,” he said.
around that level for 20 years. This “There is no excuse and we need to AustralianSuper CEO
figure is the difference between move beyond rhetoric and into action.” Ian Silk says it’s time to
women’s and men’s average weekly full- Based on like-for-like roles the
time equivalent earnings, expressed as a gender pay gap at AustralianSuper move beyond rhetoric on
percentage of men’s earnings. is zero, but the fund has identified a the gender pay gap.
“Closing the gender pay gap pay gap in their front line investment
requires action from all levels of the team due to large numbers of male “While, excluding the investment
community – whether it is access to employees. It has worked actively to department the gender pay gap
penalty rates and overtime for lower bring this down from 30 per cent to 20 at AustralianSuper sits below the
paid female workers or promoting per cent. The fund expects to see this national level at 10.7 per cent, we are
more women into senior executive reduce even further in the next few actively working to eradicate the gap
ranks,” he said. years. altogether,” said Mr Silk.
“It is now time for a change in
04 SUPERTALK – January 2018
AGEING POPULATION MAY NOT BE SUCH
SUPER NEWS
A THREAT: RESERVE BANK
Australia’s ageing population could be by these groups can continue to
less of a threat to the labour market counterbalance some of the substantial
than previously thought, according to effects of ageing on aggregate
a new paper from the Reserve Bank of (workforce) participation," the RBA
Australia. report says.
While noting that the most likely “As health outcomes improve, the
implication of ageing is a tighter elderly may work full time for longer,
labour market in the longer term, the but it is also plausible that many elderly
paper – Ageing and Labour Supply workers will choose partial retirement
in Advanced Economies by RBA at some point,” the paper says. Increased female workforce participation is
economists Alexandra Brown and The paper notes that ageing is helping to offset the impact of our
Rochelle Guttmann – suggests that most evident in parts of high-income ageing population.
rising workforce participation among east Asia and Western Europe, such
certain population cohorts could offset as Japan, Italy and Germany. By older people and those of prime-age
this impact. contrast, Australia has one of the workers is gradually narrowing. This
“Increased female and elderly youngest populations among advanced is particularly the case for the 55-
workforce participation has partially economies, helped by a relatively high 64 year old cohort, which now has
offset the downward pressure net migration rate. a participation rate of less than 20
from ageing. Projections show that Across advanced economies, the percentage points below the prime-age
continued growth in participation gap between participation rates of cohort in most advanced economies.
NEW JOB INDEX MEASURES INCREASE OF NON-PERMANENT
EMPLOYMENT
Kinetic Super has launched a Contingent Job Index report
which aims to inform Australian employers on developments
in the take-up of temporary, contract and casual employment
solutions on a national and state level.
The Contingent Job Index measures and tracks
advertised vacancies across 4,000 sources in Australia,
which include digital advertisements on job boards,
employer career portals and recruitment company websites.
Measurement of vacancies is used as a lead indicator of any
future employment movements.
The Index also measures the proportion of contingent
employment opportunities (temporary, contract and casual)
as a percentage of all job advertisements (e.g. contingent
Employers in the financial and insurance services industry are the fastest
plus permanent).
growing users of the contingent workforce.
Kinetic Super CEO Katherine Kaspar said that the Index is
a valuable engagement tool with members.
“We recognise that Australia’s modern workers are entirety of their intermittent careers,” Ms Kaspar said.
on the move in their lives and careers. With over 25 years The inaugural report from the Index highlighted a
of expertise and experience in servicing the recruitment growing trend towards contingent employment models in
industry, Kinetic Super understands contingent workers Australia’s job market – including a 43 per cent increase in
– who make up the majority of our members – and their the number of advertised temporary, contract and casual job
unique requirements,” she said. vacancies since November 2013. The fasted growth has been
“This has allowed us to offer invaluable insights into the seen in the Victoria/Tasmania and South Australian/Northern
trends and issues impacting part-time, flexible and transient Territory groupings.
workers across all industries and occupations. It also Employers in the financial and insurance services industry
underscores the importance of our ongoing commitment are the fastest growing users of the contingent workforce. The
to educating the contingent workforce on how crucial it is use of temporary and contract talent solutions in this sector is
to stay connected to their superannuation throughout the up by 50 per cent over the past six months.
SUPERTALK – January 2018 05
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Along with our owners – 27 industry super
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we believe in the power of long-term,
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We invest on behalf of like-minded
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To find out more visit ifminvestors.com
DEBT INVESTMENTS | INFRASTRUCTURE | LISTED EQUITIES | PRIVATE EQUITY One purpose. Shared prosperity.
Past performance is no indicator of future performance. This information has been prepared without taking into account the investment objectives, financial
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for further SUPERTALK
IFM Investors Pty Ltd ABN
– January 67 107 247 727, AFS Licence No. 284404, CRD No. 162754, SEC File No. 802-75701.
2018
SUPER FUND CIO RECOGNISED
SUPER NEWS
FOR RETIREMENT INNOVATION
Mine Wealth + Wellbeing CIO, David Bell, has been awarded
the BT Investment Management (BTIM) Retirement
Innovation Award for his role in developing the Member’s
Default Utility Function (MDUF V1).
The Member’s Default Utility Function is an open-
architecture metric developed by a panel of academics and
industry professionals to assist the industry in providing
retirement outcome modelling.
Mr Bell said that the Award – which he received at
the SuperRatings’ Awards dinner in Melbourne – reflects
Mine’s significant focus and support in developing superior
retirement outcome solutions.
“It was made possible through the hard work and
Michael Bargholz CEO BTIM presents Mine’s CIO David Bell
collaboration of the entire Member’s Default Utility Function with his award.
working group and their role in developing this powerful
metric has been invaluable,” he said. “I am truly humbled Papers, presentations, models and FAQs in relation
and it demonstrates the genuine need in the industry for a to MDUF v1 are available at the AIST website and at
retirement outcome solution.” membersdefaultutilityfunction.com.au.
HESTA CELEBRATES THREE DECADES OF GROWTH
In a super industry gathering that
included the fund’s past and present
CEOs, HESTA has celebrated its 30th
birthday and three decades of steady
growth.
HESTA – which stands for Health
Employees Superannuation Trust of
Australia – was set up on 30th July,
1987 to provide superannuation
to employees in the health and
community sector.
Today, HESTA is a $40 billion fund
with 820,000 members and 70,000
employers and is one of industry
superannuation’s success stories.
Speaking at the 30th birthday
celebrations, HESTA CEO Debby Blakey
said HESTA had accomplished a lot
over the past three decades and,
importantly, was well positioned to
lead into the future with a strong team HESTA’s past and present CEOs : Anne-Marie Corboy, Debby Blakey (current) and John Lloyd.
and an unwavering focus on delivering
positive outcomes for every member.
Ms Blakey also said the fund would “There is still much unfinished inequalities. And we will continue to
continue to support and advocate business,” Ms Blakey said. “In 2017, speak out to change that,” she said.
for policies that improve retirement an Australian woman’s story is one
outcomes for women. still plagued by imbalances and
SUPERTALK – January 2018 07
FIRST SUPER APPOINTS INDIGENOUS LEADER TO THE BOARD
SUPER NEWS
First Super has appointed Djab of successful organisations he has
Wurrung elder and Indigenous leader, started and nurtured points to his
Tim Chatfield as an independent initiative and problem solving capacity,”
director. he said.
Mr Chatfield is CEO of an Mr Chatfield has served with
Aboriginal-controlled health clinic with distinction on a myriad of boards and
a unique model, serving Indigenous similar bodies, including as the current
and non Indigenous people in regional Chair of Aboriginal Housing Victoria,
Victoria. He was centrally involved in current Chair of Martang Pty Ltd, a
establishing this community resource member of the Victorian Aboriginal
in 1999. Heritage Council and the Aboriginal
First Super CEO Bill Watson said Stakeholder Group of the Victorian
Mr Chatfield – who joined the board Premier and Aboriginal Affairs Minister.
in late September – had a tremendous “As a fund which has a significant Indigenous leader Tim Chatfield.
track record of serving the community proportion of its members living and
and working to stimulate economic working in rural and regional Australia,
development in a regional context. we welcome the highly relevant broadening the skills and experience
“Tim Chatfield is an inspiring perspectives and diversity Mr Chatfield of our Board. It continues First Super’s
community leader who contributes brings to First Super,” Mr Watson said. board renewal program with half of its
across an extraordinary number of “Tim’s appointment brings an directors being appointed in the last
public policy areas. The sheer number outlook outside of our own industry four years,” he said.
WA FUND MERGER TO BUILD SCALE AND EFFICIENCY
Perth-based superannuation funds, opportunity for our members as well
Concept One and WA Super, have as our State, with jobs remaining in
announced their intention to merge. Western Australia and not going east
The agreement will see Concept like they have with recent successor
One members being merged into WA fund transfers for other WA corporate
Super, building the scale and efficiency super funds,” he said.
of the only Western Australian- WA Super CEO Fabian Ross is
based profit-to-member, public offer at the helm of the transition project
super fund. and acknowledges the changing
Dr Ken Evans, Chair of Concept superannuation landscape that is driving
One and Mr Tim Shanahan, Chair of many of these mergers.
WA Super said in a joint statement: “In the last 10 years, the
“This is great news for West Australian superannuation landscape has been Concept One and WA Super, have announced
their intention to merge.
workers and businesses who will ever-changing, making it increasingly
continue to have access to a locally- difficult for some funds to maintain
based, member-focused, low fee low fees and provide quality member possible, for all involved.”
super fund.” services. As a result, we have seen a WA Super has its origins in
Talks between the two Western rise in the number of mergers between looking after local government and
Australian-based funds commenced in funds,” he said. Western Australian employers. It now
December 2016, with implementation “At the end of the day, WA receives contributions from over 4,000
of the merger expected to occur in Super is here to protect and grow our employers for over 40,000 members
early 2018. members’ retirement money, and to and has grown steadily over the last
Dr Evans said that Concept One help them achieve their retirement 35 years. The combined entity will
members will experience lower dreams. And this is exactly what we’ll manage over $3.2 billion on behalf of
administration and investment fees, do for all our new members and 60,000 members.
enhanced investment options and employers. We’re excited to welcome “Both trustee boards are delighted
access to a wider range of personal everyone from Concept One on-board about the prospect of a merger
financial advice options. in the New Year, and to implement this between two Western Australian super
“This is an exciting merger merger as efficiently and seamlessly as funds,” Mr Shanahan said.
08 SUPERTALK – January 2018AIST’S KAREN VOLPATO WINS 2017
SUPER NEWS
WOMAN OF THE YEAR AWARD
AIST senior policy advisor Karen “Anyone who knows Karen
Volpato has been named the 2017 well knows that her passion for her
Woman of the Year at the 5th annual work is driven by an unwavering
Money Management & Super Review commitment to protecting members’
Women in Financial Services Awards. best interests across every aspect of
AIST CEO Eva Scheerlinck said the superannuation,” Ms Scheerlinck said.
Award – which celebrates women’s Throughout her career Karen
achievements across the financial has championed gender equality,
services sector – was a fitting tribute particularly through her work with
to Karen’s tireless and passionate work Women in Super, where she was chair
in superannuation policy and research of policy for four years, and also as
and a long career in championing marketing manager of First State Super
better retirement outcomes for where she developed Australia’s first
members. women and super website. As part of AIST’s Karen Volpato receives her award.
Ms Scheerlinck said Karen’s recent her work with the AIST-Mercer Super
work on the AIST-Mercer Super Tracker Tracker, Karen introduced a gender lens first female lawyer in a Tasmanian law
and her very active involvement in the to the Tracker to provide an evidence- firm established in the 1880s. Karen
long and complex industry negotiations based assessment on how policy began her career working at the Trust
regarding Regulatory Guide 97 fee changes might impact on women’s Bank, also as the bank’s first female
and cost disclosure were just two retirement outcomes. lawyer. At the Retirement Benefits
highlights in an outstanding 37-year Another career highlight was Fund, she spent a year and a half
career in superannuation. During Karen’s role in overseeing the reviewing invalidity claim processes
RG97 negotiations, Karen emphasized marketing rollout of First State Super with all stakeholders, halving both
an objective and principles-based becoming a public offer fund as well as the claims and reviews. Karen also
approach, which is gaining consensus the merger with Health Super. personally managed the Port Arthur
across the industry. Karen did her legal articles as the massacre invalidity claims.
NESS SUPER CELEBRATES 30 YEARS
NESS Super has celebrated 30 years of homogenised franchise,” he said. “In
serving the electrical industry as well this environment, NESS Super will not
as the appointment of a new CEO. merely survive but thrive.”
Established in 1987 by electrical Tony Glossop, one of the original
industry representatives to service Board members in 1987 and who is
electrical contractors and their currently the Chair of the NESS Super
employees, the fund has evolved Board agreed.
to represent workers in all electro- “Regardless of the constantly
technology industries including cablers, changing superannuation landscape,
electrical, communications and NESS Super will be there for our
electronic technicians. industry, our employers and our
Interim CEO Peter Murphy said members. We look forward to the next
it is NESS Super’s focus on, and 30 years” said Mr Glossop. Newly appointed CEO Paul Cahill.
understanding of, its members that has Mr Glossop said the fund was
led to the fund’s success. looking forward to welcoming
“At the end of the day, NESS Super newly appointed CEO Paul Cahill. delighted to have such a capable
wants an environment where the Cahill replaces former CEO Angie person in Paul, with vast experience
member is allowed to decide what Mastrippolito who departed the fund in the superannuation sector and as a
they want. And like buying a coffee, last year. CEO, to lead the fund into the future,”
members will prefer the independent “Whilst we have been saddened he said.
café to an impersonalised and by the departure of Angie, we are
SUPERTALK – January 2018 09FEATURE
COVER STORY
Are millennials
all that
different?
SuperTalk spoke to three of the industry’s top marketing experts about their approach to
engaging millennials with their super.
High profile launches of several new
super funds aimed at a niche market
of mostly millennials have not gone
unnoticed by super’s traditional
players. With catchy brand names like
Spaceship, GROW and Human Super,
the so-called super start-ups’ are
sprouting a narrative that is all about
taking control of your super, investing
more ethically and having an edgy
customer experience.
These new funds typically have a
huge social media presence, they host
breakfast events, provide giveaways –
one even boasts a wait list. Their focus
is member-centric and their approach
is fresh.
Take Spaceship. Its mission is “to The millennials’ share of Australia’s super pool has more than doubled over the last decade.
help our generation build wealth” and
its three portfolios carry the tagline
“invest where the world is going.”
The emphasis is on connecting with landscape has raised questions as ups have shown the industry how
members on a level that resonates, to whether traditional players in the to connect differently with a whole
rather than simply promoting a new industry have been giving millennials generation of young people. This
app or service. Add in some edgy enough attention. includes leveraging social media
graphics to a smart, clean website, and Geoff Brooks, executive officer – channels and identifying that many
the effect is powerful. And so is the strategic marketing & communications young people have different concerns
fund’s reach, with research showing at Equip, says there is no doubt that and social values and financial realities
that the millennials’ share of Australia’s the start-ups have done a good job of than previous generations, including
super pool has more than doubled marketing super to millennials. housing affordability and the increased
over the last decade. “It’s not a lesson on how to run casualisation of the workforce.
While it will be some time before a super fund, it’s a lesson on how to Equip has also been focused on
the success of these new funds can connect,” he explains. connecting with young members by
be judged, their arrival on the super Mr Brooks says the super start- engaging on issues not necessarily
10 SUPERTALK – January 2018COVER STORY
directly related to super or retirement. be based on a group of consumers who
For some time now, the fund has think, behave or respond in a similar
hosted ‘non-super’ content on its fashion.
website. Articles about housing “There’s about five million
affordability, paying off education millennials and they all have different
debt and other topical subjects have views about the world and what they
attracted a strong readership base. value so you need to be really careful
But Equip stops short at marketing not to get caught up in the hype and
to members by their age or generation. stereotyping of this generation,” he
Instead, the fund groups member says. “The concept of a millennial
cohorts by shared values, experience generation tells us virtually nothing
and attitudes to money. about the consumers – the same
Mr Brooks says successful applies about descriptors like boomers
marketing to any age group is about and Gen X.” Hostplus chief marketing officer
getting beneath the surface and taking Umberto Mecchi
into account factors such as upbringing “There's about five
and personal experience.
“Dynamic content and tailored million millennials and to get a lot of diversity in a group if you
just base your segments on age and
communication is key – it’s about they all have different sex,” he says.
getting the right information to views" Like Mr Brooks, Mr Mecchi
members at the right time, regardless acknowledges that the start-ups have
of age,” says Mr Brooks. Mr Mecchi raises an interesting done a good job in talking to a younger
“It may surprise many people that point in comparing the characteristics generation about where the fund
a lot of the 50 plus age group are very that are written about millennials invests their money.
confident about transacting online,” he today to his own youth. As he sees it, As he points out, investing in
says. “Equally, some of our members themes like sport, social activism and tech companies or other start-ups
under the age of 35 are very engaged social connection have been prevalent is not new. Funds like Hostplus have
with their finances. They recognise that for decades, even amongst those who been investing in venture capital for
super is a very tax-efficient tool and are not typically defined as part of the years, with the fund having invested
they have the capacity to make extra millennial generation. hundreds of millions in various
contributions.” “Of the five million millennials companies around the globe. But it’s
Hostplus chief marketing officer, there will be those who like Justin clear these new funds are better at
Umberto Mecchi, agrees that good Bieber and those who like Slipknot, telling the story.
segmentation goes beyond just those who are fit and those who aren’t, Mr Mecchi believes that the likes
identifying a group of people with the those that will vote for Pauline Hanson of Spaceship have vindicated that
same demographics and should instead and those who won’t, so you’re going super is disruptable and unlike the case
SUPERTALK – January 2018 11with traditional organisations,
COVER STORY
MILLENNIAL
negative publicity only serves as
fuel for start-ups to go harder.
“Each ‘knock back’ they
receive is a learning opportunity
for them to adjust and fix and re-
MISCONCEPTIONS
boot,” he says.
Mr Mecchi is of the strong Here’s what millennials are really like:
belief that any fund would be
87%
NEARLY
foolish to bury their head in
the sand to these emerging work out more than once a week 60%
find love through friends or
competitors.
shared interests
“Technology is not the real 50%
disrupter, the real risk is not cook more than 5 times a week 80%
being member centric which don’t think they should be
is the focus of these emerging 70% expected to respond to emails on
value a purposeful career over the weekend or at night
competitors,” he says.
salary
Taking a more targeted
42%
approach to engaging millennials, 75% said that getting married was
First State Super developed a check multiple social media sites extremely important to them
blog and other social content for multiple times a day
younger members. First State’s Source: TODAY and Greatist 2017 survey
head of marketing, Carly O’Keefe,
says the fund’s ‘Student Club’ is a
By the numbers:
sub-brand of the fund designed
to help the fund connect • Millennials’ share of Australia’s super pool has MORE THAN
with millennials by providing DOUBLED over the last decade.
broader relevance beyond
superannuation. • Average balance currently held by Millennials is $59,500
Ms O’Keefe agrees with Mr compared to $17,300 a decade ago
Mecchi and Mr Brooks that the
value of ‘personalisation’ is key in • Money held in super by millennials has increased by $226
attracting and retaining millennial BILLION in last decade
members, which currently Source: Roy Morgan
account for about 15 per cent of
First State’s membership base.
While we don’t have a
crystal ball to predict the future,
one thing is certain: funds must
respond to changing consumer
expectations – among millennials
or other age groups – to stay on
top of the game.
MILLENNIALS LESS FOCUSED ON MAXIMISING FINANCIAL RETURNS
Compared to older age groups, millennials are more likely or super funds in the future or are already doing so. This
to prefer to invest in a responsible super fund than a fund compares to 66 per cent of Gen X and 68 per cent of Baby
that only considers maximising financial returns, according Boomers.
to new consumer research from the Responsible Investment Similarly, millennials are more likely to change super
Association Australasia (RIAA). providers or other investments to another provider if their
According to the research released late last year, an current fund engaged in activities not consistent with their
overwhelming majority (88 per cent) of millennials indicated values.
they would consider investing in ethical companies, funds See story on page 20 for more on the RIAA research.
12 SUPERTALK – January 2018Untapped opportunity
STUDY TOUR
in contact centres
AIST took 18 delegates from 11 superannuation funds on a five-day study tour to Austin,
Texas to find out how the customer experience is evolving through the contact centre.
AIST’s senior marketing manager, Theresa Hoogland reports.
First stop on the tour was global leader
in technology services and consulting,
InfoSys. The company’s head of digital
strategy and innovation, Dr Paul Bailo,
emphasized the need for shifting
the traditional call centre to a “value
centre” – providing as much assistance
to members as possible. This means
having the right infrastructure to be
a sale enabler, not just a centre to
reset passwords or provide account
balances.
“You need to create a new
measureable ecosystem and understand
the pain points for your members – Australian delegates visit the Austin Design Studio as part of AIST’s contact Study tour.
then address them,” said Dr Bailo.
Financial Literacy Toolbox – a
company aiming to change the when something breaks,” said Matt around the globe are working hard
conversation with US pension plan Tomlinson, EA’s global director of to rebalance the perception of the
members from one of retirement customer experience labs. contact centre.
to financial wellness – echoed the Next up on the tour was a close Justin Robbins, a contact centre
importance of identifying then look at the role of artificial intelligence ‘evangelist’ who works with companies
addressing issues. (AI). No longer just a phone-based across the US to help them develop
President and founder Mark Singer interaction, the rise of AI is powering their contact centre offering tells his
said the big challenge for pension the contact centre of the future. clients they need to build on a strategy
funds was solving the language issue. However delegates were told the role that overcomes the common myths
“We go out of our way to make things for humans will not be obsolete. held by executives and really help the
complex,” he said. While more calls get managed customer solve their problems.
A visit to Electronic Arts (EA) by AI and chatbots, the few calls that The key takeout from the study
provided delegates with a clear need to be managed will be high value, tour is that the contact centre is
example of how driving the call centre complex and require knowledgeable fast becoming the primary channel
can enhance the member experience. agents to provide detailed support and driving the member experience. As
The computer design company – well service. technology evolves, the contact centre
known for creating games like FiFA “I see the day when a call centre will continue to have a pivotal role in
World Cup – was voted the unenviable position is not entry level, but an customer experience.
award of “Worst Company in America” aspirational job,” said Bill Durr, contact
two years running. However a well- centre workforce management expert. "I see the day when a
designed customer satisfaction “Quicker answer time doesn’t always
framework, alongside the insourcing equate to happy customers – you also call centre position is
of the company’s call centre, saw a need to solve their problems once they not entry level, but an
prompt turnaround.
“The framework created an
call.”
It’s not just funds that are
aspirational job"
innovative way for us to enhance the grappling with the pace of change
entire player experience, not just in contact centres. Organisations
SUPERTALK – January 2018 13Rising Star Award winner
RISING STAR
Charles Wu from State Super (SAS Trustee Corporation) who won the 2017 Investment
Rising Star award spoke to SuperTalk about AI, machine-learning and information overload.
What is your background in super?
I joined the super industry by
coincidence about seven years ago.
My experience prior to working in
super had always included exposure to
institutional investment but not a role
specifically within superannuation. This
was a little more difficult to come by at
the time. I applied for a role with Media
Super as the Investment Analyst and
was appointed by Dr Jon Glass. This was
the start of my career in super.
We understand you have been
involved in a project at State Super
that uses machine learning. What is
machine learning and how has it been L to R: Ian Manton-Hall (Hermes), Charles Wu (State Super), Eva Scheerlinck (AIST).
embracing the model?
Machine learning is a sub-category
computational power and tap into the conventional wisdom is constantly being
of the broader data science field. At
broader alternative data structure. For challenged. The GFC and the period
State Super, we use machine learning
qualitative investment, I believe it will after distorted many things I learnt
to process large volumes of data to
become a very important tool. After all, earlier in my studies. For example, I did
support the decision-making process. In
we are in an era that is both blessed not know negative interest was possible
a small team, this has helped us to cover
and cursed by data. From an investment
a lot of ground and be able to process What are you looking to get out of
perspective, distilling insights from data
large volumes of information in a robust the study tour?*
is essential to successful investing.
manner. It has been a very interesting The study tour will be a great
journey because there are only a few What do you see as the biggest opportunity for me to understand the
organisations using these techniques challenge in investments at the BT Pension Scheme, its governance
in a similar manner so we had to build moment? structure and investment process. I am
it from scratch. While there are high A considerable challenge is looking forward to meeting a number of
degrees of similarity to traditional that we are in an environment of experienced investment professionals at
quantitative techniques, many more heightened uncertainty. This ranges Hermes and plan to visit the University
computer algorithms are involved. from geopolitical risk, such as the of Oxford, where they have launched
Preliminary results are encouraging and tension between the US and North Centre of Machine Learning.
we will continue to research, develop Korea, and the rise of populism to
and enhance the process. market risk where equity markets *As Rising Star Award Winner, Charles will
have elevated valuations. This has the attend a strategic leadership study tour in
"We are in an era that is potential to make risk assessment and the UK, valued at up to $10,000.
risk budgeting a very difficult task.
both blessed and cursed Personally, the daily challenge is Rising Star Award is proudly supported by:
by data” often the sheer volume of information
received. Processing the quality write-
How do you see the role of AI and ups, research reports and manager
tech in investments evolving? commentary to formulate a view
The role of AI and technology can be a time challenge – so using
in investments will continue to structured data, such as economic
evolve. For quantitative investment, data, can be extremely efficient.
it is a natural progression to increase Further, we are also in a time where
14 SUPERTALK – January 2018The big data
INVESTMENT
challenge
Big data can reveal much about super funds but, without a centralised data capture
process, it can also mislead. Nick Paparo, Head of Asset Owner Segment, Custody and
Fund Services at J.P. Morgan looks at the benefits and challenges.
Super funds are facing increasing
pressure to collate and analyse data
from multiple sources to deliver more
tailored investment products for
members.
With Australia’s ageing population
there is a greater need for more
complex post-retirement products
and tools, thus exacerbating the
requirement for better data to deliver
these.
Many funds are grappling with
multiple data sources, which are
delivered in varying standards. This
creates a data pool of mismatched and
inconsistent information which affects
how super funds develop and support
retirement products. Inconsistent data
also impacts investment decisions, risk Many funds are grappling with multiple data sources, says J.P. Morgan’s Nick Paparo.
management and the ability to meet
regulatory requirements.
A robust, centralised process to
capture and manage data will improve trades to the funds’ custodian, which fund managers or generated by super
both data quality and timeliness. could then act as a third-party check. funds’ internal asset management
For example, where funds employ While funds have greater teams.
dynamic asset allocation, a centralised visibility with their own internal asset For example, a super fund’s private
data capture process enables a management teams, this also increases equity manager may be reporting
quick response to changing market their responsibilities. This includes its portfolio assets and returns in US
conditions or manage risk. ensuring that their own front office, as dollars, but a deeper dive will reveal
This is because such investment well as their appointed external fund that many of its assets are held around
strategies require a near real-time view managers, do not trade an instrument the world. As investment strategies
of member investment options’ actual without fully understanding all of the become more sophisticated, funds
asset allocation before the fund can downstream ramifications. This may need to be fully aware of these
react with strategies, such as synthetic require the fund to create a pre- exposures and how they are being
exposure through an overlay. approved trade universe with static managed.
Where funds use an Exposure data that is then populated once the Big data can be a powerful tool
Book of Record (EBOR) solution to trade is completed. for super funds to utilise to better
hold investment data, there is a time Longer term, new global standards understand holistic return drivers and
lag between managers’ trading and focused on the format of data and sources of risk, but requires a robust
the reporting of exposures. This how it is exchanged could improve centralised process to do so.
information could be better managed efficiency and consistency of fund data,
by managers reporting unconfirmed whether being managed by external
SUPERTALK – January 2018 1514-16 MARCH 2018
CONFERENCE OF MAJOR SUPERANNUATION FUNDS
SPEAKERS
Adam Ferrier Sarah Williamson Nicholas Davis Elaine Herlihy
Founder, CEO, Head of Society Marketing Director,
THINKERBELL FCLTGlobal (UK) and Innovation, PayPal
World Economic Forum
(Switzerland)
Dr Charles Day Laura Kalomiris Willis Sparks Stacey Allinson
CEO, The Office of Operations Director, Director, Global Macro, Head of Contact Centre,
Innovation and Science Australia, Trov Eurasia Group (USA) Miele
Australia
FOR FULL PROGRAM AND TO SECURE
YOUR TICKET VISIT AIST.ASN.AU5.8
Strong super gains
Superannuation.
RESEARCH
Comfort with anticipated standard of living – have boosted super balances during 2016
in retirement increases. more generally over the past five years. Th
boost confidence
some tightening in both aged pension enti
As per Figure 37, confidence with households’
and superannuation concessions may hav
‘anticipated standard of living in retirement’
weighed on comfort with ‘anticipated sta
increased 5% to 5.18 in mid-2017 – almost reversing
of living in retirement’ during the past year
the falls reported in the previous two surveys and a
bit above (3%) the historical average of 5.03 out of ‘Single parents’ reported the lowest score
10 since the survey began. regards to their ‘anticipated standard of liv
retirement’ (4.63 out of 10) closely follow
Another strong gain in superannuation returns –
‘couples with young children’ (5.25 out of 10
largely due to a rise in both global and Australian
The latest ME research has shown that Australians are feeling increasingly confident
equity prices partly offset by falling bond prices
‘retirees’ recorded the highest (5.99 out of
about their retirement, despite lingering concerns about employment.
together with continued compulsory contributions
ME’s latest Household Financial
5.50 5.46
Comfort Report has shown a 5 per cent
increase to Australians’ confidence 5.30
5.23
around their anticipated standard of 5.18
5.08
living in retirement. 5.10 5.06
ME head of public relations 5.01 5.02
4.90 4.94
Matthew Read said that Australians 4.88 4.88 4.88
now rate their confidence at 5.18 out 4.70
4.78
of a score of 10. Oct 11 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Jun 17
“The new figure reverses the falls
Figure 37 – Expectations for comfort in household’s standard of living in retirement. Scores out of 10.
reported in the previous two reports Expectations for comfort in household’s standard of living in retirement. Scores out of 10.
and is slightly above the recorded
historical average of 5.03 out of 10
since the report began,” said Mr Read. lowest level of confidence followed by extra to their superannuation, with the
However, rising costs of couples with young children. proportion of households that ‘never’
necessities, low wage growth and According to the report, only a or ‘sometimes’ contribute extra to
future rate rises are still causing fifth of Australians expect to fund their super decreasing by 1 point to 83
Australian households financial stress. their retirement with their own per cent. The number of Australians
“While the report contains a superannuation, with self-reliance who ‘often’ or ‘always’ contribute extra
glimmer of hope when it comes in retirement appearing to be out of to their super increased by 1 point to
to Australians’ confidence in their reach for most Australians. However, 18 per cent.
ability to fund their retirement, there young singles were the most likely “The frequency of additional super
are still levels of financial stress and to think they’d be able to self-fund contributions being made is no doubt
casualisation of the workforce remains their retirement, with 26 per cent of affected by the increasing casualisation
as critical an issue as ever,” he said. them expecting to solely fund their of the workforce,” said Mr Read.
The increase in confidence in retirement with superannuation, According to the report,
retirement can be partially explained compared to 17 per cent of single underemployment is feeding into
Household financial comfort report
by the strong gain in superannuation parents and 12 per cent of middle- household concerns, with the
returns, largely due to a rise in both aged singles or couples with no underutilisation rate for unemployed
global and Australian equity prices children. and underemployed people at 14.5
during 2016-17 and over the past five per cent in May – significantly higher
years more broadly. Mr Read said that "Underemployment is than a year ago. Around 27 per cent of
government changes also had an effect casual and part-time workers want to
on confidence. feeding into household work an additional 18 hours on average
“Some tightening in both concerns" and 20 per cent said they would prefer
aged pension entitlements and to work full-time.
superannuation concessions may have “Slightly less than half of
weighed on Australians’ confidence all households expect to use a For more information contact
around their anticipated standard of combination of superannuation, ME Head of Public Relations,
living in retirement,” he said. private savings and the government Matthew Read at
Retirees recorded the highest level pension to fund their retirement,” said matthew.read@mebank.com.au
of confidence around their anticipated Mr Read.
standard of living in retirement, while, There were nominal changes in the
conversely, single parents recorded the number of Australians who contribute
SUPERTALK – January 2018 17AIST Awards 2017
AIST AWARDS
AIST’s 10th annual Awards for Excellence have recognised the achievements of the
profit-to-member super industry.
The calm before the awards storm. Emily Jackett from legalsuper accepted her
award for Leader Development Scholarship –
Outstanding Fund Staff Member.
Jacqui Bermingham from Sunsuper accepted HESTA were proud to accept the awards for Best B2B Campaign (campaign spend under $40K),
the award for Best Direct Mail Campaign Best Integrated Campaign (campaign spend under $40K) and Best Internal Communications
(campaign spend under $40K). Campaign (campaign spend under $40K).
UniSuper’s Staying Super Informed: Your Super, Your Money campaign took out the award for David Southwood from BUSSQ Building Super
Best Digital Campaign (campaign spend under $40K). accepted the award for Best Member Facing
Project (FUM under $10bn).
18 SUPERTALK – January 2018AIST AWARDS
Wendy Tancred and Craig Keath from Mercy Super accepted the award Kate Williams and Keryn Welch from Tasplan accepted the award for
Best Direct Mail Campaign (campaign spend over $40K). Best Internal Project (FUM under $10bn).
Jan Dekker from Equip accepted his award The Hostplus team’s Humans of Hostplus campaign took out the award for Best Digital Campaign
for Leader Development Scholarship – (campaign spend over $40K) and the prestigious Platinum Communications Award.
Outstanding Trustee Director.
The VicSuper team with their award for Best Member Facing Project (FUM over $10bn). Cbus was awarded the sought after
Best Corporate Reporting award.
Vanessa Lambert and Linda Zeelie from Statewide Super accepted the Sunsuper took out the award for Best Internal Project
award for Best Integrated Campaign (campaign spend over $40K). (FUM over $10bn).
SUPERTALK – January 2018 19Interest soars
TRENDING
for responsible
investing
Member expectations around ethical and responsible investing in superannuation is
growing dramatically, according to a new consumer report released by the Responsible
Investment Association Australasia (RIAA).
The report – From values to riches –
released late last year found that an
overwhelming majority (92 per cent) of
Australians expect their super or other
investments to be invested responsibly
and ethically.
According to the report, one
notable driver for the growth in ethical
and responsible investing is rising
consumer sentiment in support of
investments that are consistent with
individual values.
RIAA’s 2017 consumer
research builds on earlier research
commissioned in 2013. The report
notes that – compared to four years
ago – Australians are increasingly
demanding that financial markets
play a socially constructive role in the
economy.
Compared to four years ago – Australians are increasingly demanding that
“People are expecting their
financial markets play a socially constructive role in the economy.
investments to support the emergence
of tomorrow’s industries, to remove
support from companies that are doing
social harm, and to create the assets millennials are the group most likely to latter tending to have a greater
and infrastructure that we will need act on their beliefs and expectations preference for and expectations
in Australia late into this century,” the of organisations to deliver them around responsible investing. Women
report says. quality and trustworthy responsible are more likely to strongly expect
The main issues Australians investments. their super or other investments to be
find important when thinking about invested responsibly and ethically.
investing are renewable energy, "Australians feel most Expectations of financial advisers
healthcare and medical products and have also evolved with consumers
sustainable practices, however when strongly about animal wanting advice and investments to
it comes to avoiding investments that cruelty and human cover their values as well as their risk
do harm, Australians feel most strongly
about animal cruelty and human rights
rights violations" appetites. About half of Australians
expect their advisers to invest in
violations. funds which align with their values,
There are also different attitudes
The research also found that while nearly two thirds expect their
among men and women, with the
20 SUPERTALK – January 2018You can also read
