A whole lot has changed since Sunsuper’s CEO, Tony Lally, first presented at Benefits Canada’s DC Plan Summit in 2008. Back then, the multi-industry superannuation fund manager did not have 5,000 members, the value of its pension fund was a far cry from its current worth of AUD$22 billion, and it could not make the low-fee claim of being 42% less than commercial operators and 19% less than the average competing industry fund.
Since then, a few calculated decisions have revolutionized the fund manager. One of those decisions was to switch insurance companies to the AIA Group Ltd., which has placed its staff directly in the Sunsuper offices to underwrite and manage claims, said Lally.
Giving advice
But the most radical milestone for Sunsuper has probably been adapting its business model to offer financial planning advice over the phone. The notion of offering retirement planning advice had been brewing since 2005 when the Aussie government legislated that members would have choice. Many companies made the decision to add many investment options to their menu; Sunsuper ended up with 20 options. However, according to Lally, increasing the number of fund options was not in members’ best interests. “When you bring choice in you have to give advice, because people have difficulty in selecting,” he said.
At first, Sunsuper offered semi-integrated advice, which involved a “triage” call centre whereby operators and off-site financial planners worked in unison to prioritize queries and offer telephonic advice.
But the model still had flaws because the cost of providing complex advice to members came with a hefty price tag; it costs about $3,000 to provide advice, said Lally.
Fortunately, the majority of members are not looking for sophisticated advice, said Lally, adding that research has shown that 75% of people need more than basic information but find financial planning daunting.
45 and up
This is where Sunsuper seized its opportunity to integrate the contact centre with its SunTracker, a tailored advice program. Members in the 45-plus age range and with a balance of $50,000 are encouraged to optimize their retirement planning using SunTracker, which services 50,000 members and has $825 million in assets.
This cohort became the core clientele for Sunsuper’s targeted programs. Sunsuper has built its value proposition around the idea that not everybody can be financially independent in retirement. To this end, said Lally, the SunTracker program is designed to offer advice based on lifestyle whereby members look at what they can achieve based on their current circumstances and then aim to achieve their personal best.
Annual followups are part of the SunTracker program’s relationship management structure; members’ plans are actually updated every three years. In addition, Sunsuper has trained 70% of its call centre staff to offer basic guidance over the phone and, on any given day, a team of 20 in-house financial planners are at the ready to look after members.
Although Sunsuper’s innovative advice model gives it the capability to have engaging conversations, there is still room for improvement. The next step is to learn how to effectively amalgamate and implement online advice, said Lally. “We have learned that the more you integrate a business, the more successful you’re going to be.”
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