If you’re thinking about starting a choice-led superannuation business in Australia, it’s safe to say most people would consider you dead in the water before you’d even started.
Why? Well, mainly because the majority of Australians are completely apathetic when it comes to making an active choice about their retirement savings.
As a result, an overwhelming majority of us – 60 percent to be exact – are perfectly happy to let our employer default us into any super fund when we first start working. During this process we pay scant attention to fees, how the fund invests our money, or even actual performance. I’m guilty of this, and chances are, so are you. It’s a subliminal Australian ‘she’ll be right’ attitude that is making a large portion of the wealth management industry incredibly rich, off our easy money.
Why are we so apathetic? Well, it’s hard to pin-point one exact reason, but there are two that stand out. The first is that financial decisions are scary, and the second is that generally speaking, we don’t like thinking about ageing or death – two emotions that crop up when we’re faced with decisions about our retirement. So, as a result, we avoid or defer, mostly content to let one of life’s biggest financial decisions wash over us.
To give you some perspective, our apathy equates to $1.33 trillion worth of money being effectively ignored by its owners. Or to look at it another way, it’s analogous to 8.8 million Australians having their employer set up a bank account on their behalf, into which roughly 10 percent of their salary would go each month. At best, each employee would then check said bank account once a year, at tax time. Oh and this would continue for the next forty-five years, until they were sixty-five.
While we all know this would never happen with actual bank accounts, the stark reality is that this is exactly what is happening with superannuation accounts, right now, under all our noses. Shocking, I know.
But still, despite attempts to ‘shock and horror’ people into caring, the reality is superannuation apathy is close to being an impenetrable double-brick wall. While statements like the one above might get Australians a little hot under the collar, maybe even enough to get them to consider switching, the plethora of vanilla superannuation brands and confusing offerings sees them make a fast retreat.
So, like I said earlier. You’d really have to be crazy to consider building a business and spending money to try and get people to care. The odds are well and truly stacked against you.
Or are they?
The thing is, the odds are certainly are stacked against a certain type of startup. One that thinks technology and a ‘digital’ product is going to be enough of a sledgehammer on that apathetic retaining wall. While this might get you through the first layer of brick, it’s unlikely to get you through the second. For this, you’ll need a completely different skill set. Creativity and emotion.
The fact is, breaking a cycle of apathy is a completely surmountable problem. You just have to hinge your product and brand on something people care about enough to take action. Themselves.
At the heart of this are two very basic emotional drivers that confront us everyday. The first is our inherent need for security, and the second is our aspiration for a better life.
And if you’re targeting a younger demographic, then aspiration is a hugely powerful emotion and driver. For what, if anything is more synonymous with the millennial generation? We basically embody the very word.
Much to our managers and employers despair, we are constantly seeking to better ourselves. Whether that has us aspiring to move up the corporate ladder faster than those that came before us, to travel the world before we’re too old to enjoy it, to find the perfect relationship without having to settle, or to have tomorrow’s technology today, the fact is over-achievement and ambition has been hard-wired into our mindset since a very young age. We strive continuously to be the best we can be.
We also aspire to having a positive impact on the world around us. While our forbears are intent on exhausting every possible source of extractable fossil fuel, we’re far more likely to turn to renewable energies, or advocate for climate change policies. While white haired governments seem ready and willing to implement regressive gender, equality and religious policies, we’re willing to march against them, all over the world.
Both security and aspiration are interlinked, and both can be leveraged by having more money. And, at the end of the day, that’s all superannuation is. Money, and lots of it.
So could a superannuation wealth brand orientated around aspiration work? Absolutely. Because after all, money is a key enabler when it comes to turning our aspirations into reality, giving us the confidence and security of knowing we can back ourselves to take on more risk elsewhere in our lives, in our quest for a bigger and better life than what we had yesterday.
But if you don’t believe me, just ask global innovation agencies BBMG & Globescan, who’s Aspirational Consumer Index is on the rise year after year. The buyer persona now represents 40 percent of the global population.
“BRANDS HAVE GOOD REASON TO PLACE PURPOSE AT THE CENTER OF THEIR VALUE PROPOSITION, AS ASPIRATIONALS ARE NOTABLY MORE TRUSTING OF COMPANIES THAN OTHERS AND MORE OPEN TO BRANDS WITH A BOLD VISION OF THE FUTURE,” ERIC WHAN, DIRECTOR AT GLOBESCAN
According to the authors, “Aspirationals matter because they are the first to unite materialism, sustainability values and cultural influence, making them an essential audience to build markets, influence cultural norms and shape behaviour change at scale.”
We all want to be richer. And there is no shame in that, whether it be a bigger bank balance, or through enriched life experiences. New financial brands that empower consumers to achieve both certainly have a fantastic runway ahead of them, should they successfully tap into this zeitgeist.
CEO and Co-Founder at Zuper Superannuation. Loves fintech, writing, pilates, Campari and soda's and, as of 2018, marathon running.More