The demand for tailored financial advice has never been more pronounced. A recent report by Iress and Deloitte The Big Shift highlights a critical gap in the Australian market, with 11.8 million Australians having unmet financial advice needs. If these needs were fulfilled, it could result in an increase of $2 trillion in national savings over the next 30 years.
This not only underscores the potential financial benefits of addressing this advice gap but highlights a broader, more pressing issue: the role of superannuation and pension funds in delivering affordable and accessible financial advice, both in Australia and globally.
The global context: Ageing populations and the rising need for financial advice
Australia is not alone in facing the challenges posed by an ageing population. According to the University of Sydney, by 2026 more than 22% of Australians will be aged over 65 (up from 16% in 2020). This demographic shift is mirrored globally, with 1 in 6 people predicted to be over 60 by 2030.
These demographic shifts place immense pressure on existing pension systems and highlight the need for individuals to be better supported into retirement. Financial advice is crucial in helping people navigate the complexities of retirement planning, investment strategies, and tax implications, ensuring they can maintain their standard of living in retirement.
As part of this support, Alexandra Middleton, the head of strategy from finance marketing specialist group The Dubs Agency (which developed The Big Shift interactive report) said digital tools and content should form the backbone of how pension funds help members.
“Educational content and resources should be a key tenet of how funds support members and a valuable tool to promote their offering in market,” said Middleton.
The role of superannuation funds in Australia
In Australia, superannuation funds are at the forefront of this challenge. As part of the government’s “Delivering Better Financial Outcomes” package of reforms, super funds are now empowered to deliver personal financial advice to their members. This reform represents a significant shift in the role of super funds, allowing them to go beyond their traditional function of managing retirement savings to becoming key providers of financial guidance.
The potential impact of this shift is enormous. With 11.8 million Australians currently lacking adequate financial advice, super funds have a unique opportunity to bridge this gap, ensuring their members are better prepared for retirement. This isn’t just about providing advice; it’s about fostering a culture of financial literacy and empowerment, helping individuals make informed decisions about their financial future.
The Global role of pension funds in financial advice
While Australia is pioneering in allowing super funds to provide personal financial advice, the role of pension funds in delivering such services is becoming increasingly relevant worldwide. In the United States, only 1 in 3 people who have not consulted a financial adviser feel financially secure according to the Centre for Retirement Research at Boston College. In the UK, the Financial Conduct Authority (FCA) has raised concerns about the advice gap, noting many people are not receiving the financial advice they need, particularly those with modest pension pots. The same can be seen across Asia, with a report by Cerulli highlighting retirement advice needs are not being met.
Pension funds globally are in a unique position to address these needs. By leveraging their existing relationships with members and their deep understanding of investments and retirement planning, pension funds can play a crucial role in delivering tailored financial advice. This not only helps members achieve better financial outcomes but also enhances the value proposition of the funds themselves, making them more attractive to potential members.
However, a video with Prof. Dean Sanders, Partner, Deloitte Access Economics, highlights the growing opportunity for all kinds of financial organisations to fill this advice gap. Super and pension funds are in a perfect position to be successful in this space if they act quickly. Moving away from just traditional marketing and advertising to embrace technological shifts will be paramount to the success of your advice delivery model. Consider AI, personalisation and interactivity to engage clients and make a real impact.
Quantifying the opportunity in financial advice
The opportunity for super and pension funds to step into this advisory role is significant. According to the Iress and Deloitte research, addressing the financial advice gap in Australia could increase national savings by $2 trillion over 30 years. In a video with John O’Mahony, Partner, Deloitte Access Economics, the industry could see $2.1 billion in revenue if they effectively capitalise on this growing opportunity.
“ According to Iress and Deloitte’s research, addressing the financial advice gap in Australia could increase national savings by $2 trillion over 30 years.”
Globally, the potential impact is even more substantial. In the UK, addressing the advice gap could boost retirement savings by billions of pounds, while in the US, it could lead to a significant increase in retirement readiness among workers.
A report by Royal London found there are 3.7 million non-advised customers who are open to financial advice and have over £50k in investible assets. This is equated to over £185 billion in investible assets available. Further afield, looking across all 10 markets in Asia, the percentage of workers concerned about being financially insecure in retirement is substantial—ranging from 50% in China to 95% in Vietnam—and is equal to or even exceeds the percentage of retirees who share this concern. Looking to Singapore, according to a report by Statista “Singaporeans were less confident about their financial security when it comes to income streams and retirement issues.”
However, this opportunity is not without its challenges. The competition for new customers—those seeking financial advice—will be fierce. “Super and pension funds need to be proactive in capturing this market, and marketing will play a critical role in this effort,” says Middleton.
The importance of marketing in capturing new members in a changing landscape
In an increasingly competitive landscape, super and pension funds must be visible and actively engage with potential members. Far from simply taking a volume approach, to effectively drive member growth and retention, marketing activity needs to be strategic, with content and channel chosen based on audience and the objective you’re trying to achieve. As shown in The Big Shift research, as megatrends reshape the landscape and open up new opportunities, super and pension funds need to be flexible in pivoting their offering and how they communicate it, to ensure they remain relevant.
A full-funnel marketing approach, which includes brand awareness, consideration, and conversion strategies is essential for differentiating in market and driving awareness of expanded offerings. Research consistently shows the impact of an always-on, full-funnel marketing program. A recent Nielsen meta-analysis found that full-funnel strategies see up to 45% higher ROI compared to marketing campaigns across a single purchase stage. This approach is particularly relevant for super and pension funds, as the decision to switch funds is often a long-term process that involves multiple touchpoints. “As well as delivering consistent content that addresses audience needs at each stage of the funnel, super and pension funds also need to think about how they can tailor their content to serve the needs of different audience demographics,” says Middleton. “To make this as effective and efficient as possible, funds can leverage creative social assets to deliver relevant, personalised messages in-feed, while driving back to useful base material.”
The Big Shift: A case study in strategic marketing
As well as shining a light on the opportunities tied to evolving advice needs, The Big Shift is also a case study of how super funds can use interactivity and content atomisation to drive engagement with members.
With interactivity shown to drive 73% more engagement than static content, The Dubs Agency worked with Iress to extend the reach of its insights through an interactive content ecosystem that provided multiple touchpoints on site and in social feeds. Through the atomisation of content around key pillars, Iress was able to cement its thought leadership in areas that underpin its broader strategic objectives. The Big Shift shows how super funds can utilise one big rock content piece to produce assets that target multiple audiences with relevant messages at every stage of the funnel.
It’s time to fill the gap
As the competition for new customers intensifies, the need for a comprehensive marketing strategy becomes even more critical. Super funds must ensure they’re not only visible but also actively engaging with their target audience across all stages of the marketing funnel. This requires a commitment to continuous marketing efforts, with a focus on building long-term member relationships through content and resources that reflect their changing needs.
