Banking Fintech

Wealth, superannuation and the new aspirational consumer zeitgeist

Wealth, superannuation and the new aspirational consumer zeitgeist. Image by alphaspirit, Shutterstock.com
Written by Jessica Ellerm

We’re giving easy money to the wealth management industry, says Jessica Ellerm. Why are we so apathetic about superannuation?

If you’re thinking about starting a choice-led superannuation business in Australia, it’s safe to say most people would consider you dead in the water before you’d even started. Why? Well, mainly because the majority of Australians are completely apathetic when it comes to making an active choice about their super.

As a result, an overwhelming majority of us – 60% to be exact – are perfectly happy to let our employer default us into any super fund when we first start working. During this process, we pay scant attention to fees, how the fund invests our money, or even actual performance. I’m guilty of this, and chances are so are you. It’s a subliminal Australian “she’ll be right” attitude that’s making a large portion of the wealth management industry incredibly rich, off our easy money.

Why are we so apathetic? Well, it’s hard to pinpoint one exact reason, but there are two that stand out. The first is that financial decisions are scary, and the second is that generally speaking, we don’t like thinking about ageing or death – two emotions that crop up when we’re faced with decisions about our retirement. As a result, we avoid or defer, mostly content to let one of life’s biggest financial decisions wash over us.

To give you some perspective, our apathy equates to $1.33tn worth of money being effectively ignored by its owners. To look at it another way, it’s analogous to 8.8 million Australians having their employer set up a bank account on their behalf, into which roughly 10% of their salary would go each month. At best, each employee would then check said bank account once a year, at tax time. Oh, and this would continue for the next 45 years, until they were 65.

While we all know this would never happen with actual bank accounts, the stark reality is that this is exactly what’s happening with superannuation accounts, right now, under all our noses. Shocking, I know. Yet, despite attempts to ‘shock and horror’ people into caring, the reality is superannuation apathy is close to being an impenetrable double-brick wall. While statements like the one above might get Australians a little hot under the collar, maybe even enough to get them to consider switching, the plethora of vanilla superannuation brands and confusing offerings sees them make a fast retreat.

Superannuation apathy is close to being an impenetrable double-brick wall Click To Tweet

So, like I said earlier, you’d really have to be crazy to consider building a business and spending money to try to get people to care. The odds are well and truly stacked against you. Or are they?

Creativity and emotion must lead innovation

The thing is, the odds certainly are stacked against a certain type of startup; one that thinks technology and a digital product is going to be enough of a sledgehammer on that apathetic retaining wall. While this may get you through the first layer of brick, it’s unlikely to get you through the second. For this, you’ll need a completely different skill set: creativity and emotion.

The fact is, breaking a cycle of apathy is a completely surmountable problem. You just have to hinge your product and brand on something people care enough about to take action. Themselves. At the heart of this are two very basic emotional drivers that confront us every day. The first is our inherent need for security, and the second is our aspiration for a better life.

And if you’re targeting a younger demographic, then aspiration is a hugely powerful emotion and driver. What, if anything, is more synonymous with the millennial generation? We basically embody the very word.

Much to our managers’ and employers’ despair, we are constantly seeking to better ourselves. Whether that has us aspiring to move up the corporate ladder faster than those that came before us, to travel the world before we’re too old to enjoy it, to find the perfect relationship without having to settle, or to have tomorrow’s technology today, the fact is that overachievement and ambition has been hardwired into our mindset since a very young age. We strive continuously to be the best we can be.

We also aspire to having a positive impact on the world around us. While our forbears are intent on exhausting every possible source of extractable fossil fuel, we’re far more likely to turn to renewable energies, or advocate for climate change policies. While white-haired governments seem ready and willing to implement regressive gender, equality and religious policies, we’re willing to march against them, all over the world.

Security and aspiration are interlinked, and both can be leveraged by having more money. And, at the end of the day, that’s all superannuation is. Money, and lots of it.

Aspirational consumers: the new market for a fintech wealth brand

So could a superannuation wealth brand oriented around aspiration work? Absolutely. After all, money is a key enabler when it comes to turning our aspirations into reality, giving us the confidence and security of knowing we can back ourselves to take on more risk elsewhere in our lives, in our quest for a bigger and better life than what we had yesterday.

If you don’t believe me, just ask global innovation agencies BBMG & Globescan, whose Aspirational Consumer Index is on the rise year after year. The buyer persona now represents 40% of the global population.

Brands have good reason to place purpose at the centre of their value proposition, as aspirationals are notably more trusting of companies than others and more open to brands with a bold vision of the future — Eric Whan, director at Globescan

According to the authors, “Aspirationals matter because they are the first to unite materialism, sustainability values and cultural influence, making them an essential audience to build markets, influence cultural norms and shape behaviour change at scale.”

We all want to be richer, and there’s no shame in that, whether it be a bigger bank balance or through enriched life experiences. New financial brands that empower consumers to achieve both certainly have a fantastic runway ahead of them, should they successfully tap into this zeitgeist.

READ NEXT: 110 years to save for retirement: the future of mortgages, pensions and savings

– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. Read more here. Image by alphaspirit, Shutterstock.com

About the author

Jessica Ellerm

Jessica Ellerm is CEO and co-founder at Australian fintech startup Zuper Superannuation. She's also a fintech commentator, blogging at her own website (jessicaellerm.com) and guest posting for BankNXT. In addition, she writes for the fintech blog Daily Fintech Advisers, specialising in small business banking. Prior to Zuper, Jessica spent 6+ years at payments company and small business startup bank Tyro. Jessica is a contributor to Brett King's Breaking Banks, and has freelanced as a finance news journalist for Australia's leading online markets channel Finance News Network.

Leave a Comment