It looks like 2008/09 will be another year of negative returns for many funds. Although equity markets, in particular, have rallied in the first half of this year, many funds will still struggle to deliver a positive number to their members.
In this difficult investment environment - and there's no guarantee it won't continue in 2009/10 - it has never been more important to communicate early with members and prepare them for more bad news.
The use of the Internet continues to be an effective and efficient communication channel for funds. For funds that still question this, note the following statistic: about 8.5 million members of Australia's workforce can access information about their fund's performance via the Internet.
Not only is the design and navigation of a website important, the use of widgets or associated technologies is becoming just as important as we become more of an online community. Funds could use blogs or member online forums to allow members to pose questions or seek information.
Email continues to be the preferred online communication approach, but funds need to acclimatise to a new world, particularly if their membership base is made up of gen X or gen Y members. A growing trend is the use of mobile-based information portals.
As mobile phones transform into portable mini-personal computers, leading organisations around the world are redesigning website content to suit mobile phone screens. One recent example is ANZ linking Internet banking to iPhones and achieving enormous kudos with its customer base.
At its most basic level, a fund's website needs to be informative, current and aligned to the members of that fund. A survey of fund websites last year delivered some interesting findings.
A minimum criterion of information about the state of the markets, current returns by the fund, use of member-friendly language, help lines and financial planning assistance was only been met by 23 per cent of the sites surveyed.
The better funds, for example, attacked the issue of negative returns head-on on their home pages - no use trying the hide the bad news. Poor funds used links to hide performance numbers - and then only gave tables of returns with little or no commentary.
Investment returns delivered in tabular form might be informative, but members had little explanation and could not make ready comparisons among options.
Funds should regard their websites as a cost-effective, round-the-clock means of communicating with members.
A lack of accessible, clear information for members in a depressed investment environment can have negative consequences. Members are seeking reassurance about their superannuation savings, and if it is not forthcoming via their most accessible tool - the Internet - they may venture elsewhere for advice.
Or members may overwhelm the fund call centre with inquiries that could have easily been dealt with by a clear and informative website.
So to avoid the problem of poor communication through a badly devised website, funds should be more proactive with their information to members by taking a few of the following simple steps:
- assign responsibility for currency of your website to a senior person,
- ensure content is current and informed by market awareness and weekly feedback from members,
- strive for clarity, consistency and member-friendliness in communications content and format,
- significant market movements should be addressed upfront on your home page as soon as possible,
- look at contemporary communication channels or approaches, such as web-based broadcasts, blogs or forums covering market conditions,
- funds should review call-centre communication protocols to ensure they complement other online communication channels, and
- consider using new emerging communication channels, for instance mobile communications, conveying to members a fund is modern and progressive.
These measures can be used to address members' concerns upfront, building trust and transparency in your fund's brand.
Don't delay making the changes until member statements are released. Negative returns are front-page news and members are asking questions. Be the one with the answers.
Frank Gullone is Centre for Investment Education chief executive.
