Like most people my age, I must admit that I spend many hours on social media, which is probably many hours more than I should. One viral post doing the rounds over the past day or two is the Laurel vs Yanny debate.
By the time you read this, you may have already seen countless articles about it so I’m not going to entertain you with all the details. But if you have no idea what the fuss is all about, then click here.
You may also be aware of the dress debate that broke social media in 2015. If you somehow have no idea what that was all about, then click here.
While these debates are mostly amusing and light hearted, it’s clear that some people are quite passionate by going to great lengths to show that they are right or even explain why these debates even started in the first place. There are of course, scientific reasons behind these debates – no two humans are the same after all – and the same piece of information could be interpreted differently. If you want to read more about the science, I recommend you click the links above.
These debates then got me thinking about one never-ending debate that has been taking place in the financial services industry, specifically the superannuation sector: industry super versus retail super.
In the blue corner, you have the industry super camp using relentless comparative advertising to claim superiority in fees and returns against the retail super camp in the red corner, whose proponents regularly hit back with claims about the benefits of advice and about transparency and utility.
Although we can all probably poke holes in some of these claims, both camps have fairly compelling cases. The problem however, is that the debate has been going on for as long as I and many others can remember, which reflects the relative immaturity of the sector and has arguably been taking place at the expense of consumers.
After all, as marketing theory tells us, consumers make a purchase decision to satisfy a need or resolve an issue and simplify their life. The never-ending debate and the constant barrage of information from both camps leads to analysis paralysis and is perhaps why many Australians still go with the default arrangement when it comes to superannuation.
Personally, I think the debate is just noise and that super should just be super without the “industry” or “retail” attached to it. It is about the members, after all, isn’t it? Furthermore, the lines between industry and retail super have started to blur over the past few years.
We have seen investment options increasing in some industry funds, including direct investment. More tailored insurance cover is also becoming increasingly common in industry funds. We have also seen some retail funds introducing new, low-cost products. And I’d be very surprised if the line-blurring stops here, with growth and innovation a key focus among many funds.
I realise that comparing a debate on someone’s name or the colour of a dress to a debate on superannuation and retirement and money is comparing apples to oranges.
However, the time has surely come for the sector to show some maturity and move beyond the us-versus-them debate, particularly at a time when the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry looms large.
It’s time that the great minds in the superannuation sector focus on the real issues affecting members instead of the issues affecting funds, including how to engage younger members, how to prepare members for retirement as much as possible given their personal circumstances and how to make sure retirees have enough money during retirement.
Marketing is of course important, particularly as super funds are largely undifferentiated in the eyes of most consumers. However, let’s keep in mind and focus on the true purpose of superannuation instead of shooting down those who don’t agree with us.
For the record, I think her name is Laurel and the dress is white and gold. I seriously can’t understand why anyone would hear or see otherwise.