Challenger’s Aaron Minney likens member engagement with superannuation to being a passenger on an aeroplane. Being engaged with the process is a good thing, but knowing every little detail and being aware of every issue is burdensome and likely to undermine confidence.
For members of super funds that confidence is a crucial ingredient in helping overcome a fear of running out of funds, Minney believes.
“It’s not simply more money that makes people comfortable,” Minney said during Challenger’s Solving the retirement puzzle at scale webinar recently.
The head of retirement income research at Challenger brought up a recent report the provider released in tandem with the National Seniors Association that found wealth was no guarantee of a comfortable lifestyle in retirement.
“It comes back to confidence; if you’re not confident about your retirement you’re not going to be comfortable,” Minney said.
Addressing the issues that plague superannuation in this country will take in-depth actuarial analysis, he says, but that doesn’t mean clients need to be bombarded with this convoluted analysis. Instead, the industry needs to find some cohesion and present wrapped solutions to members.
Like passengers on a plane, the journey is more pleasant with being frightened by complexity. “We’ve got to stop scaring in that sense,” he said.
Complexity needs to stay “under the bonnet”, he added, before using a common consumer product as an analogy. “Take your iphone,” he said. “It’s a complex piece of technology, but it’s so simple the average two-year old can take it up and use it. There’s complexity behind it but it can simple for the client.”
Simple and scaled solutions are required, Minney argued, and they need to come soon.
“There are more than a million member accounts that have retired post the FSI (Financial Services Inquiry) and we haven’t put that solution in place yet,” he added.