“Experience” stores seem to be all the rage in Australia, with Apple, Samsung and more recently, Microsoft, opening such stores across the country in the last few years.
While popular among technology companies, these stores have cross-sector appeal with ANZ opening its ‘Grow Centre’ in Sydney in June 2014, offering street-level financial advice to the public.
Recently some super funds have started to follow suit by attempting to create a superannuation experience for consumers. Last October, VicSuper started a campaign by building a vault to allow the public to hold their account balance in physical cash. And last December, UniSuper followed ANZ’s lead by opening its first member centre in the Melbourne CBD.
These efforts are certainly a good starting point but it remains to be seen whether they can actually improve engagement among members, particularly younger members who tend to be the most disengaged. CoreData’s 2015 Member Engagement Research found more than half (52.5%) of Gen Y members are disengaged or highly disengaged with their super.
To crack this cohort, super funds could start by expanding and promoting the availability of financial advice and education. Previous CoreData research suggests Gen Ys have a range of financial concerns which typically centre on adequacy of income, given the need to repay debt, meet living expenses and save – and the majority are looking for support in managing their finances.
Instead of the conventional approaches of providing financial advice and education, however, super funds would do well to follow the relatively unconventional approaches that have worked well in the US.
These approaches range from podcasts and blogs hosted and written by financially savvy Gen Ys, to social clubs and networking events with classes and programs run by younger financial planners. They typically weave advice into challenges Gen Ys commonly face, without discussing the technical and nitty-gritty material.
Perhaps one of the reasons these unconventional approaches have worked is because Gen Ys perceive the advice of their peers as more trustworthy, cred
ible and reliable. Also just as important is that these services tend to be offered for free or at a low cost, thereby addressing two of the most common barriers to taking up financial advice and being more effective in engaging Gen Ys.
There is no one blanket solution to engaging Gen Ys and some of the methods being used may be met with a great deal of skepticism, but if funds could initially engage even just 1% or 2% of their Gen Y members, this figure could easily grow to 5% or 10% over time if these members found these services to be useful and resulted in positive word-of-mouth.