Market forces put pressure on funds to perform

28 February 2008

Recent sharemarket losses and negative returns demonstrate why superannuation funds must do more for their members in the post choice environment, than simply deliver positive investment returns, according to Plum's Product and Strategy Manager Peter Talacko.

Mr Talacko addressed the Investor Weekly Branding and Marcomms Conference in Sydney yesterday, saying that in recent years funds had increasingly begun to offer more to members than just good investment returns, recognising the impact that choice had had on the market.

'At Plum we changed the way corporate super funds approached their superannuation offer when we first hit the market nine years ago, focusing on member education and services,' Mr Talacko said.

'The recent run of sharemarket losses, and members' reactions to them, demonstrates that simply delivering good investments returns are just half of the picture. If a super fund has nothing else to offer their members when there is a run of bad investment returns, why would a member stay with that fund?'

Mr Talacko outlined Plum's member services and education model, explaining that although good investment managers, as well as a good investment menu and choices, was integral to Plum's philosophy, it also tried to better educate members so when investment returns were not so good, members were in a better position to weather the storm.

'We help members better understand their investment options so they make better choices depending on their particular circumstances. We also apply behavioural finance concepts to our education and products where possible to ensure we actively engage as many members as possible.'

'In addition, we do our best to anticipate member queries and give them the information they need to understand the changing market. For example, we put together comprehensive questions and answers to enable our call centre consultants to respond to members' queries about the sub prime crisis and its impact on their investment choices. We also included an update in members' half-yearly benefit statements and put recorded topical 'on hold' messages for members waiting to speak with our contact centre.'

Plum also distributes regular monthly email newsletters to members with the latest investment market information together with other features (also disseminated as a pod cast and RSS feed*), as well as a quarterly magazine that takes a more in-depth approach to superannuation issues.

Read the full version of the story - Plum: market forces put pressure on funds to perform (PDF 28kB)