The recently released Guidance Note for developing a vulnerable member policy, is designed to help super fund trustees develop their own policy for identifying vulnerable members and access assistance if they need it. It can be seen as less of a directive, and more of a series of helpful pointers.
The Guidance Note was issued by AIST, ASFA and FSC in July this year, following a year of preparation and consultation. Its aim is noble: no more will those that don’t speak ‘finance’ as their first language feel unable to enjoy the benefits of growing their super; or those that may not have the traditional identity documents to hand feel quite so helpless in the face of adversity; even those that are not yet equipped with the financial savvy of the battle-hardened, soon-to-be-retiree should not feel so daunted by the choices that lie before them. Help is at hand, or at least that is the premise.
The Guidance Note offers information on what assistance is available, how these services can help and things to be aware of when communicating with members, in whatever format.
So, what is a vulnerable member?
‘Vulnerability’ in this instance is referring to anything that may affect a member’s ability to interact with their super fund. The Guidance Note concentrates on the following:
- Aboriginal or Torres Strait Islander identity
- financial distress
- family violence
- low level literacy
- non-English speaking backgrounds
- mental health conditions
- natural disaster
Members can become vulnerable at any time, and this can be a permanent or a temporary state. But it is important to note that just because a member might fit into one of the categories, it does not mean they consider themselves vulnerable.
The complexity is around how to sensitively identify a vulnerable member, and then how to offer help in a considerate way and manage the interaction.
Why is help required?
If a member cannot communicate effectively or comfortably with their fund, it can lead to bad outcomes. Maybe the member leaves the fund, maybe they end up with a smaller retirement pot, or maybe their insurance claim is declined.
What is the reasoning?
In developing a policy, trustees gain an understanding of what help they can and should offer, and how this can enhance their relationships with members. For example, offering publications in other languages, publicising access to relay or advocate facilities, ensuring that their websites are uncluttered and simple to use, and always using Plain English.
In essence, the Guidance Note has respect at its core; respect that members are individuals, and may at times like a little extra help when interacting with the fund. It even includes a ‘respect provision’ setting out just that:
“Members must always be treated with respect, and fund and insurance staff must always be respectful of a member’s or their representative’s personal circumstance.”
Funds will be setting out how to identify vulnerable members and putting training in place, whilst developing their policy and reviewing processes and systems to cater for the diversities that are uncovered.
In an ideal world, every member would be able to interact with their fund in a way that suits their individual circumstances, language, level of financial literacy and preferences. However, in the real world … that’s just not possible. The big challenge is for trustees to look deeper into their membership and show a level of flexibility to support those who need it, while staying within the confines of legislation – to include everyone whilst alienating no-one, and to do so without depleting members’ funds or staff resources and morale.
Trustees will gain a more thorough understanding of the make-up of their membership. If harnessed correctly, this could help promote the services and assistances that would have the greatest natural take-up, which in turn may help whole sections of previously disengaged members find new value in their super fund and feel more empowered to make choices that will lay the foundations for a healthy retirement – financially at least.
It’s going to be long road; one that funds are just starting out on. But it will be an insightful journey and one that has the potential to really enhance the reputation of the super industry as a whole. The industry’s time of mythical money-hoarding is now long-distant. It is moving to a place of investing truly and soundly for every member’s future. Who knows, other industries may follow our lead and aim for this same level of equality that we all strive for?
IQ Group have the knowledge and expertise to ensure funds stay on track to deliver improved outcomes for members whilst implementing these changes along the way and we look forward to partnering with clients to support them on this journey.
By Michelle Ayling, Senior Consultant