ASIC's Moneysmart convened a roundtable of leading influential voices for millennials and their finances that is sounding the alarm for superannuation funds to lift their game and increase services, transparency, and improved access to information to better engage millennial members.
The roundtable brought together a panel of highly recognised Australians from financial advice, research and content creators for this cohort who all agreed that as the largest generation in the workforce, the current language and approach to superannuation is outdated and disengaging for millennials. Panellists of the roundtable included:
- Simone Constant - ASIC Commissioner
- Victoria Devine - Host of Australia's number one financial podcast 'She's on the money'
- Andrew Dunbar - Award winning financial adviser, APT Wealth
- Queenie Tan - Financial content creator
- Effie Zahos - Finance journalist and roundtable host
- Dr Angel Zhong - Associate Professor of Finance at RMIT University
New research from ASIC's Moneysmart revealed the concerning trend that nearly half (48%) of surveyed millennials admit they are not knowledgeable about maximising their super. Despite being the first generation to enter the workforce with compulsory superannuation from day one of their working lives, millennials are less engaged with their super compared to previous generations. The roundtable convened by ASIC identified a significant transparency gap, with panellists suggesting super funds are failing to meet the expectations of their millennial members.
Speaking at the roundtable, ASIC Commissioner Simone Constant said, 'I encourage superannuation fund members to think of themselves as a customer. As a customer, you have choices and can demand services match your needs as you would from other financial services providers, such as your bank or insurer.
'I question whether super fund members receive the same level of clarity about what is happening with their super compared to the minute-by-minute access you get from other banking and financial services apps.'
The conversation shed light on the notion that super funds must evolve or risk losing the trust of millennials. Terms like "retirement planning" and "pensions" fail to resonate with a generation more focused on their immediate financial goals and the current cost of living.
'From an investor psychology standpoint, when we as consumers see complicated things, our attention is shifted because we only have so much mental bandwidth. Super funds need to avoid jargon and use relatable examples so people can proactively engage,' RMIT Associate Professor Dr Angel Zhong added.
With around $2.7 trillion in superannuation in Australia, excluding self-managed super, the roundtable panellists called for super funds to be more accountable to their members. The need for easy access to tools and calculators as well as goal-setting information was highlighted as crucial for fostering engagement.
'As an industry we could do a much better job of making super tangible for people. We need to show people where their money is invested. Make it less about "superannuation", more about tangible investments,' Andrew Dunbar explained.
'Superannuation calculators help people connect with their super. They can help show people the lifestyle they could be living, as well as helping to track progress and see how changes with contributions can have an impact.'
Better retirement outcomes and member services is one of ASIC's five strategic priorities for 2024-28 and Moneysmart offers free tools and information to help consumers plan for their financial future. As the cost of living continues to rise, millennials are juggling multiple financial priorities, from mortgages to family responsibilities. However, the panellists agreed that superannuation is one area where millennials can take control without additional financial strain.
'We need to shift the mindset from seeing super as competing with our immediate financial goals to appreciating it as an essential part of our overall financial journey,' Effie Zahos added. 'You don't have to contribute extra to your super to boost your returns; just give it some extra time to make sure it's working for you.'
In alignment with the insights from the roundtable, ASIC's Moneysmart is launching a consumer awareness campaign aimed at millennials. The campaign will spotlight the benefits of engaging with super early and often, demonstrating how regular contributions can compound significantly over time.
'Millennials are willing to plan and engage with data for their long-term physical wellbeing and health. Now is the time to see millennials engage in the same way with their long-term financial health through their super. The tools and information on ASIC's Moneysmart website are a great place to start for anyone who is keen to take small steps that compound over time and achieve their future goals,' Ms Constant said.
