Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 160

Digital disruption meets retirement incomes focus

This is the fourth in a series of articles highlighting the leadership attributes needed to move the superannuation industry from its historical focus on accumulation to whole-of-life with an emphasis on retirement income provision.

There’s no shortage of leadership challenges for super industry executives – the dramatic Budget proposals are just the latest blip. But more fundamental secular changes are an even greater test. Two trends are now coalescing to create both a survival and a growth test: the increasing focus on retirement incomes in super and the digital disruption shaking every industry. I spoke with Chris Stevens, Founder of Digital Frontier Partners, on how these changes might come together.

Chris: My view is that technology is changing many of the basic premises we’ve had for running a business. Change is happening faster than leaders of organisations can predict and legislation can’t keep up. Customers’ expectations are driven by experience with global digitally-sophisticated industries. If businesses don’t adapt they’ll fail, but that’s also true for individuals. Previously successful executives can fall behind.

Jeremy: In our industry, there’s a monster demographic shift towards a pre-retired and retired population. And 62% of industry assets are owned by those over 50. But the industry so far seems ill-prepared for an ageing population, with, until recently, little focus on retirement incomes solutions. We’re going to see some funds and some leaders fall behind here, too.

Chris: In my travels, I see several archetypal executives:

  • those in complete denial about the magnitude of digital change, who just keep doing what got them to their executive position. They’re at the highest risk
  • those who realise the organisation has to change but are uncertain as to what they have to change … and so recognise they need help
  • those who realise they have to change their own way of managing and leading. They don’t have all the answers and are ready to source input from various places and collaborate.

Jeremy: If these archetypes hold true for the super industry, a shift is needed to take us to a retirement incomes focus. At one end of the spectrum there may be executives that haven’t recognised the lifeblood provided by ageing members or thought through the essentials of keeping them in the fund. At the other end, there are executives who are fully on-board and taking bold actions to change the way they think about their membership base with a whole-of-life focus.

Chris: We can think of three key areas of change: client expectations, what’s possible, and leadership requirements.

Client expectations

Most fundamentally, client expectations are changing rapidly. A business only exists if it provides value to a customer and it’s challenged when expectations of value are changing at a rapid clip and in unpredictable ways. Businesses often get into trouble in a ‘Wash, Rinse and Repeat’ cycle, where they’re focused on measurements which dictate their ongoing operating rhythm. Those measures may not be consistent with the changing attitudes and desires of the customer. The lesson is to keep focused on what’s important to the client – that’s your North Star.

Jeremy: In our industry, it’s obvious that client expectations are changing through the influence of global digital service standards. Phrases like ‘24*7,’ ‘instantaneous anywhere access,’ ‘mobile first,’ ‘make it easy,’ ‘it’s about me,’ ‘give me control,’ capture the spirit of the time and member expectations. The idea that these expectations only apply to Millennials is a myth. Over 50s and retirees are highly adept at digital channels and have high expectations of service. Keeping super members through to retirement and beyond requires a strong commitment to digital solutions.

What’s possible

Chris: Technology innovation has changed the boundaries of the possible. Digital tech and data availability have changed the personalisation and ease of access for doing business. If consumers aren’t getting personalised solutions, they’re moving on.

Great advances in using algorithms and in machine-learning will lead to reinvention of service possibilities. Structured and unstructured search mean that information can be tailored much better for individual needs. I recently visited Hilton Hotels in Nevada and was greeted by a robotic concierge, Connie, which checked me in and gave me tips on what I might do there. Chatbots are now widely discussed as ways to get personal assistance to clients.

Jeremy: Using technology to deliver personalisation is key for super funds. One-size-fit-all defaults just aren’t going to cut it for the planning and retirement phases. Members need and want help making better decisions about their futures, and the old ways of dishing up advice aren’t going to scale to the needs of an ageing population. We need to think of advice in ways that aren’t feasible in a human-only model. I’m not talking about the replacement of human advisers but expanding the reach of advice to a much greater population and supplementing human interactions.

Management and leadership

Chris: It’s one thing to identify current technology, but it’s quite another to lead a company or super fund into enduring success in the context of rapid change. This is the real leadership challenge.

Command and control is passe. Not that you don’t need the controls; there are parts of every business that need to be run for precise operating delivery. The new environment is also demanding an agile focus around the customer, to be genuinely client-centric. In a world of strong regulatory and compliance thinking, we often retreat back to our conventional KPIs and metrics. But you have to do both.

You can feel the cultural difference when you walk into meetings and the predominant conversation is about how this will impact the customer. “What will the customer think?” That’s much more powerful than a conversation about how we will improve a process.

Customer-centricity requires new skills. It’s now about infusing some of the ‘software’-type skills using data and programming to create better outcomes. Thinking agile. Design thinking.

Leaders can’t, or shouldn’t, do it all themselves. Changes around the tech eco-system, such as Software as a Service and cloud computing, mean that better, more reliable, cheaper solutions may be available from partners. And solution providers are filling all kinds of niche services with a degree of specialisation that Adam Smith could only have dreamed of. IP is at the end of every Google search and businesses that can provide this are creating disruption options for established players in all industries.

Executives and businesses have both a challenging and exciting world in front of them. As always, those who adapt and create winning propositions and teams will survive and prosper.

Jeremy: In our industry as much as in any other. Amen, brother.

 

Jeremy Duffield is Co-Founder of SuperEd. He was the Managing Director and Founder of Vanguard Investments Australia, and he retired as Chairman in 2010. Chris Stevens is the Founder of digital consultancy, Digital Frontier Partners.

 


 

Leave a Comment:

RELATED ARTICLES

11 key findings on retirement dreams during the pandemic

Retirement dreams face virus setback

How VicSuper evolved its retirement income model

banner

Most viewed in recent weeks

Why the $5.4 trillion wealth transfer is a generational tragedy

The intergenerational wealth transfer, largely driven by a housing boom, exacerbates economic inequality, stifles productivity, and impedes social mobility. Solutions lie in addressing the housing problem, not taxing wealth.

The 2025 Australian Federal election – implications for investors

With an election due by 17 May, we are effectively in campaign mode with the Government announcing numerous spending promises since January and the Coalition often matching them. Here's what the election means for investors.

Finding the best income-yielding assets

With fixed term deposit rates declining and bank hybrids being phased out, what are the best options for investors seeking income? This goes through the choices, and the opportunities and risks involved.

What history reveals about market corrections and crashes

The S&P 500's recent correction raises concerns about a bear market. History shows corrections are driven by high rates, unemployment, or global shocks, and that there's reason for optimism for nervous investors today. 

Howard Marks: the investing game has changed

The famed investor says the rapid switch from globalisation to trade wars is the biggest upheaval in the investing environment since World War Two. And a new world requires a different investment approach.

Welcome to Firstlinks Edition 605 with weekend update

Trump's tariffs and China's retaliatory strike have sent the Nasdaq into a bear market with the S&P 500 not far behind. What are the implications for the economy and markets, and what should investors do now? 

  • 3 April 2025

Latest Updates

Investment strategies

4 ways to take advantage of the market turmoil

Every crisis throws up opportunities. Here are ideas to capitalise on this one, including ‘overbalancing’ your portfolio in stocks, buying heavily discounted LICs, and cherry picking bombed out sectors like oil and gas.

Shares

Why the ASX needs dual-class shares

The ASX is exploring the introduction of dual class share structures for listed companies. Opposition is building to the plan but the ASX should ignore the naysayers and bring Australia into line with its global peers.

The state of women's wealth in Australia

New research shows the average Australian woman has $428,000 in net wealth, 40% less than the average man. This takes a deep dive into what the gender wealth gap looks like across different life stages.

Investing

The two most dangerous words in investing

Market extremes are where the biggest investment risks and opportunities lie. While events like this are usually only obvious in hindsight, learning to watch out for these two words can alert you to them in real time.

Shares

Investing in the backbone of the digital age

Semiconductors are used to make microchips and are essential to a vast range of technology and devices. This looks at what’s driving demand for chips, how the industry is evolving, and favoured stocks to play the theme.

Gold

Why gold’s record highs in 2025 differ from prior peaks

Gold prices hit new recent highs, driven by a stronger euro, tariff concerns, and steady ETF buying – all while the precious metal’s fundamental backdrop remains solid amid a shifting global economic landscape.

Now might be the best time to switch out of bank hybrids

In this interview, Schroders' Helen Mason discusses investing in corporate and financial credit securities, market impacts of tariffs, opportunities for cash investments, and views on tier two and hybrid bonds.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.