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Big super’s brave new world of brand

Big super funds are getting even bigger. But as consolidation continues – and stapling kicks in – they’ve got a new problem that can’t easily be overcome: they’re more alike than different.

Nothing else exemplifies the upheaval in the superannuation industry as much as the image of the Sunsuper logo being stripped from 30 Little Cribb Street in Milton amidst that venerable fund’s merger with QSuper to create the brand-new (and apparently never to be abbreviated) Australian Retirement Trust (ART). It was Wayne Sullivan, now director of marketing at Frontier, who organised for it to be hoisted up there on a sunny Sunday afternoon. It marked one of the first occasions when super funds began to take themselves seriously as big investors.

“It was something industry funds had never done before. Up until then, people hadn’t thought of them as really serious organisations,” Sullivan says. “That building was in a great location: right across the road from Suncorp Stadium. When the helicopters were taking the view of the stadium before a packed State of Origin, you’d see the Sunsuper logo appear in the background. Lots of people up and down the river would see it, and could say “That’s my super fund – it’s on a building. That must be a pretty serious organisation”.”

In the pre-choice of fund era, industry funds were mostly faceless. The retail bodies did better, with firms like BT leading the charge on marketing, but there was no reason or need for members to interact with their funds outside of workplace advocates. The marketing function was more a communications hub than the far slicker operations of today. Statements and annual reports were sent out to meet regulatory requirements. No-one read them.

“It was just very functional – and then, at QSuper at least, we said “We’re doing this anyway – we’re mailing this stuff out to half a million people, we may as well try and make it interesting, put some messaging in there that people can understand, and start to talk about things like consolidation or investment choice or nominating beneficiaries” – the sort of things members could do that wouldn’t cost them any money, but would help engage them with super and attach them to the fund as well.”

In 2005, Choice of Fund legislation “changed the game”. Sullivan jumped ship to Sunsuper as that fund started to recognise that it was going to need more marketing to build a brand and put advertising in mainstream media. Sunsuper soon led the market in terms of new member growth off the back of a highly successful marketing campaign that talked about the member rather than the intricacies of superannuation: “You look after your life, we’ll look after your super.”

That campaign was also the first to use a celebrity spokesperson – Olympic swimmer Libby Trickett, whose image was plastered on bus shelters, newspapers, and the sidelines of sport grounds. Hostplus also dipped its toe into the wide world of sports by sponsoring Melbourne Storm and a swag of other clubs.

Choice of fund was also the time when the industry fund collective campaign – Industry Super Australia (ISA) – started. The body has been a fierce advocate for the sector and at times a political player. No doubt some members of the LNP still wake in a cold sweat on recalling the infamous “Fox in the Henhouse” campaign, and the body continues to draw the ire of that party’s super partisans. But its greatest success was arguably “compare the pair”, which has become a full-blown memetic in Australian society.

“I think this is one of the most successful campaigns in Australian advertising – not just in super or even in finance,” Sullivan says. “It created an awareness of the industry fund segment and established the notion of the value proposition industry funds offered. Plus, it gave smaller funds without the resources to build their own brands the opportunity to compete on brand. And the “compare the pair” idea has found its way into everyday language.”

But post-stapling – a new measure introduced in the Your Future Your Super (YFYS) reforms that sees members “stapled” to a fund regardless of whether they change jobs – funds can no longer rely on default distribution for new members. In this world, brand will be more important than ever, especially with an increasing reluctance from large funds to take on ‘bus stop’ mergers with their smaller brethren.

“There is very little genuine product differentiation in super, especially in the eyes of members,” Sullivan says. “Investment performance is largely determined by markets and can fluctuate both in nominal and relative terms, and it’s not really well understood by most members anyway. And super is an intangible – you can’t pick it up, you can’t find it in a store or a branch and for most people, they don’t even choose it for themselves. So the role of brand is extremely important to create any sense of attention, awareness or attachment.”

Two cohorts will be of vital importance. Entry level workers, typically young people, where there’s a “huge opportunity” for funds to engage with tools and online functionality. Many believe this cohort is a tough group to reach, but Sullivan thinks they’re “really open to engagement” – they’re savvy consumers that like to exercise their purchasing power, and with the proliferation of trading apps, “fancy themselves as investors.”

Pre-retirees are the other cohort of prime interest. They have more at stake and are closer to actually using the product and so see the value in it, but don’t necessarily understand it better than others.

“It’s often assumed this group all use financial planners, and many do, but there’s a whole lot of people in their 50s yet to clock $100,000 in their account, especially, and disturbingly, women,” Sullivan says. “And many of them won’t be seeking holistic financial advice. The funds have that group all to themselves in terms of starting an advice relationship.”

Still, funds with “clear industry association” – like Cbus, HESTA, and Hostplus – retain an advantage in building attachment and relevance to their members,

“The “member” ideal and the notion of being a part of their industry is powerful,” Sullivan says. “I find it really disappointing to hear fund marketers talk about ‘customers’ rather than ‘members’ – it’s technical marketing speak, but I think it shows a lack of understanding of a really valuable element of creating attachment to a fund.”

“The multi-industry funds need to compete on creating some kind of value or point of difference about their size or their values. They need to find something unique in a world where every fund can claim to be low cost, high performing, with options to choose from, award winning and responsible investors – you can’t create difference on any of those things when every fund claims those attributes.”

“For retail funds distribution is critical in terms of sourcing their members. However, increasingly they need to rely on the strength and security that is often associated with their mega brands and in recent years this association has sometimes been counterproductive.”

Logically, Sullivan says, brand “shouldn’t be that important” – investment approach, fee structure, insurance and governance should all count for more. The industry “rightly” emphasises those elements. But when people think more about a “$2000 TV purchase” than they do their $200,000 super balance, brand matters.

“A well-known fund CEO has long described super funds as simply investment and marketing businesses,” Sullivan says. “As the industry consolidates and the large funds start to look, and in some cases even sound more alike, it will be the funds that can create differentiation and value in their brands that will stand out.”

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