This year marked IQ Group’s 21st year of operations in Australia. It’s a significant milestone and we recently toasted to our company’s growth over the last two decades with all employees.
21st birthdays are a grandiose affair for many and IQ group wanted to celebrate its symbolic ‘transition into adulthood’ with all our staff at events around the country (see some of our happy snaps below). We have taken the time to reflect on our past successes and acknowledge how IQ has matured over the years to be the successful company that it is today.
Just like a young adult turning 21, we look forward to taking the knowledge and experiences we have accumulated over these years to branch out even further. IQ has always focussed on looking for opportunities and making the most of them and we will continue to do this with supreme enthusiasm, professionalism, and support for the superannuation and wealth management industry.
The last couple of years has seen an unprecedented amount of change for financial providers in Australia. It’s been a challenging time and we are very proud of the work both IQ and our clients have done to adapt and to continue to grow during these times.
We’d like to congratulate and thank all of our clients – not just for their dedication and commitment to their customers – but for showing incredible business resilience and ultimately helping the Australian economy stay strong over the past 12 months.
The key, commonly a symbol associated with turning 21 for young individuals, represents a sense of freedom and earning one’s place in adulthood. It signifies an ‘unlocking’ of the future. IQ has well and truly earned its place in the super and wealth management industry and as we turn 21, we continue to unlock the futures for our clients and empower them to be the best they can be.
The government’s new YourSuper Comparison tool serves the purpose of making MySuper product performance clear, simple and comparable but most importantly, it calls out underperformance against APRA’s benchmark testing.
I am a fan of online calculators and tools which make planning and decision making easier for the everyday person. Overall, I think the tool is a great initiative …. for those that invest in a MySuper product.
Features that meet the brief
Fund performance: The tool itself provides 3, 5, and 7 year returns and fees, for products with information tailored to a member’s current super balance (provided they log into the personalised version through MyGov). The user interface requires little effort to obtain some useful, easy-to-digest performance and cost indicators. A lot of people will find the tool easy to use and compare the performance of funds, and ultimately decide whether or not they’re getting a good deal.
Multiple funds: Another feature that can work well towards improving member retirement outcomes is the indication of more than one super account. Consumers can choose to consolidate multiple accounts within the tool, after deciding which of their funds performs the best. All super simple stuff.
The missing piece
Once I started playing with the features and comparing funds, it prompted me to check the product performance for both myself and my wife. And this is where the tool begins to fall short.
We don’t invest in MySuper products, so the tool doesn’t provide insight into whether our products are performing against APRA’s benchmark, nor does it provide the ability to directly compare our products against other products in the tool. This leaves us, and many others, in a position where comparability will remain relatively difficult. Given that only around 30% of superannuation assets are in MySuper Products*, I believe that member engagement will remain low.
That said, if I was in a MySuper product, the tool would be a catalyst for me to investigate products based on performance and cost. Many Australians will likely go through the process of changing funds if the tool shows their product coming up shorter than others. The problem is, I only became aware of the tool because I work in the superannuation industry. If I didn’t, in all honesty, I would be blissfully unaware of its existence and the potential benefits it holds for my retirement. More is required to create awareness and use of the tool.
Of course, the biggest benefit of the tool is that it calls out whether a product is an underperformer. An absolute fantastic feature if you are in a MySuper product, and actually use the tool. Whether people will find their way to it is the big question. The fact that funds were required to write to their members in September if they had an underperforming product, and direct them to the tool, is something that really struck me. Letters were sent to a million people. At present, approximately 70,000 of those have closed their accounts and moved to better products …. a 7% strike rate! If these members can’t be engaged in the tool, then what are the odds of anyone using it? And not to strain the point, but again this is only MySuper product members.
At the end of the day, super members who invest in a MySuper product and make their way to the tool will likely end up with a better deal and that’s something … which is always better than nothing at all.
At the recent AIST Super Insurance Symposium, the increased scrutiny on the provision of insurance-in-super was well and truly highlighted, along with the impacts to insurance-in-super products and services that stem from the vast change occurring within the industry.
Since the idea was born in 1923 to have a comprehensive national insurance scheme for retirement, sickness or disability, the inclusion of insurance-in-super into the national retirement income system has come a very long way. Today, the super industry remains the leading supplier of death and total and permanent disability insurance in Australia and trustees are under more pressure than ever to offer affordable default insurance cover that is in their members’ best interests.
Underpinning the ability for trustees to better understand what is ‘affordable’ for different cohorts of members, as well as how to manage and maintain their insurance offering, is a complex web of data management.
The data challenges
implementing a ‘single source of truth’ and appropriate data governance;
updating systems and technology that is fit for purpose now and into the future;
updating and embedding architecture to collect, triage and use data in a timely manner;
finding (and keeping) people with the data skills and capability required; and
ensuring processes have the right balance of people and technology for the benefit of both company culture and member experience.
Where do funds get started?
data strategy needs to be supported at the executive level to ensure objectives and outcomes are communicated to all;
establishing a data strategy, and attaining data maturity, involves all facets of the organisation and must be mapped to the People, Process and Technology Frameworks;
establishing data maturity should be seen as a journey where you first crawl before you can walk, and then run. Getting the foundations right in terms of operating model, architecture, data domains and reporting metrics is critical in order to automate data extraction, make it near-real time and make it easy for all stakeholders to consume; and
technology now allows us access to huge amounts of data across systems, but to leverage that data requires a structured an incremental approach.
Better outcomes for members
Many Australians are still unaware they hold insurance through their super fund. So how do trustees ensure this huge amount of effort and investment pays off with increased member engagement? How do funds know what the ‘right data’ is to obtain members attention, gain their trust and guarantee their emotional buy in? How do they source the ‘right people’ who know how to orchestrate the data for use in the ‘right channels’ at the ‘right time’? Funds should consider mapping the member journey then focus on high value use cases and targeting specific problems in order to unlock the answers to these questions.
For super funds to stay ahead of the game, it simply boils down to how best they, and their administrators, manage data. If the Government announces a review into insurance in superannuation – as recommended by the Productivity Commission – it might lead to the biggest shake-up of group risk insurance in decades. The coming APRA Insurance in Super Heatmap will also cause waves. Speakers at the symposium emphasised that how funds go about designing products and managing claims will be critical to creating optimal insurance outcomes for members. It will require further innovation and flexibility on the part of super funds and their providers.
IQ is well equipped to support clients in building a customised insurance roadmap to ensure they know their members, design suitable and appropriate insurance products, monitor insurance outcomes and empower members to make appropriate decisions. It isn’t easy, but we’re here to help!