THE CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING: Mapping the complexity of the Australian retirement planning ecosystem Written by Teagan ...
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THE CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING: Mapping the complexity of the Australian retirement planning ecosystem Written by Teagan Altschwager and Jody Evans
ACKNOWLEDGEMENTS This research report is the first of two key reports detailing the findings from the first stage of the research conducted in 2018, which comprises of insights from consumers (focus groups with near- and recent-retirees) and key informants (interviews with members of the Australian retirement planning ecosystem). The qualitative phase forms stage one of a three-year project conducted by Melbourne Business School investigating the Australian Retirement Ecosystem. This project, entitled ‘The Orford Initiative: Improving the retirement outcomes for Australians by optimising their retirement income and financial security’ is funded by the Orford Foundation in collaboration with the Melbourne Business School. The project team acknowledges the invaluable support of the Orford Foundation. Please read the ‘Retirement planning in Australia – an ecosystem perspective’ research brief for further information on the background and motivations of this study; https://go.mbs.edu/orford/. Project team Dr Teagan Altschwager is Senior Research Fellow for the Orford Initiative at Melbourne Business School, The University of Melbourne. Dr Jody Evans is Associate Dean, Advancement and Associate Professor, Marketing at Melbourne Business School, The University of Melbourne. Research approach The team adopts an engaged research approach to all projects. Engaged research is based on authentic partnerships with communities and organisations to craft a research program that creates value with and for communities or organisations and that has aligned academic outcomes. Suggested citation: Altschwager, Teagan and Jody Evans (2019) The customer journey through retirement planning: mapping the complexity of the retirement planning ecosystem. The Orford Initiative: Melbourne Business School. Available at: https://go.mbs.edu/orford/
MELBOURNE BUSINESS SCHOOL | 2
TABLE OF CONTENTS
3 EXECUTIVE SUMMARY
6 INTRODUCTION
9 CUSTOMER JOURNEY MAPPING THROUGH THE RETIREMENT
PLANNING ECOSYSTEM
13 METHOD
14 Focus groups
18 Key informant interviews
21 CUSTOMER JOURNEY MAPPING OF THE AUSTRALIAN RETIREMENT
PLANNING ECOSYSTEM
39 OVERARCHING THEMES
49 CONCLUSION AND NEXT STEPS
49 Expressions of Interest – Roundtable Forum
50 REFERENCES
51 APPENDICES
51 Appendix 1: Focus group distribution strategy
52 Appendix 2: Focus group attendance
53 Appendix 3: The Australian Retirement Planning Ecosystem
– inclusions and recruitment process
55 Appendix 4: Key Informant Interview Profile
3 | THE CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING
EXECUTIVE SUMMARY
Despite Australian and global trends The customer journey perspective is important • Earlier interactions along the journey may
identifying consistent growth in ageing in this context for several reasons: impact later interactions – i.e. a negative
populations, people are saving less for interaction in the journey may cause
• In the heavily regulated retirement planning
retirement (Brüggen et al. 2017). This disengagement from later stages of the
context, centred around a mandated
dichotomy has motivated the present study, journey.
offering (i.e. compulsory superannuation),
which investigates the dynamics of the
it is not effective to consider interactions • Journey mapping allows us to pinpoint
Australian ‘retirement planning ecosystem’
with one provider in isolation – rather, negative interactions and their impact,
and consumer issues and barriers that limit
the various players within the retirement which allows us to tailor interventions
their engagement in retirement planning and
planning ecosystem who influence the effectively to overcome key barriers.
saving. Stage 1 of this three-year study took
individual, and each other, should all be
an exploratory qualitative approach, running • Retirement planning is a complex and
considered.
nation-wide focus groups with 168 near- confusing context, which is perceived
and recent-retirees, and conducting 69 key • Focussing on only one key interaction, or by many as boring or a low priority
informant interviews (representing 61 unique interactions with one provider in isolation, (particularly for younger people). It is
ecosystem voices). Findings revealed from the may not explain why an individual crucial to create seamless and positive
outset that retirement planning was considered disengages with retirement planning. experiences – when individuals do interact
a life-long ‘customer journey’, rather than throughout the retirement journey, it is
confined to a single activity. • Journey mapping enables us to identify
important that they reach, educate and
various providers who interact with
engage consumers.
individuals at different times; interactions
with one provider (e.g. government, media) This research report maps six key steps or
may influence interactions with another touchpoints along an ‘ideal’, hypothetical
(superannuation fund, financial adviser). customer journey, and describes the nature of
typical interactions therein. Following the ideal
• Journey mapping also enables us to identify
customer journey would involve 1. Selecting
all important interactions that contribute to
and managing one superannuation account
the individual’s overall experience.
when entering the workforce, 2. Engaging
with statements and online communicationsMELBOURNE BUSINESS SCHOOL | 4
EXECUTIVE SUMMARY
from the outset, as well as making voluntary urgency of managing their financial situation; to what they have accumulated by living
superannuation contributions when feasible, at such time they engage in advice seeking with unnecessary frugality. Many also have a
3. Transferring superannuation accounts from trusted personal contacts, as well as reliance on, or perceived sense of entitlement
whenever a change in employment occurs, various combinations of advice from the to, the aged pension, which they aim to access
4. Seeking financial advice relatively early media, their superannuation fund(s), consumer from their commencement of retirement.
in the journey to set clear retirement goals advocacy groups and industry bodies, as
Deviations from the ‘ideal’ retirement planning
and means of achieving them, 5. Developing well as one (or multiple) financial advisers.
journey reflect various frictions and barriers
a retirement plan later in one’s career (in the This ‘shotgun’ approach to advice seeking
articulated through six overarching themes; 1.
pre-retirement stage), and 6. Converting to a results from a lack of trust or perceived
Various life events create competing priorities
comprehensive decumulation strategy (which competence with any one member of the
to retirement savings, often with life events
may include longevity products/annuities ecosystem. When individuals do seek advice,
taking precedence due to their immediacy or
where appropriate), with optional access to they are often met with incomprehensible
importance; 2. Individuals have low general
government support much later in retirement. financial jargon, and feel unable to engage
financial literacy, which means they do not
in meaningful interactions as a result.
In reality, the customer journey is quite conceptualise the importance or benefit
Due to earlier disengagement, individuals
different. Due to a lack of knowledge or of early and life-long engagement and do
create an additional step in the retirement
interest in retirement planning early in life, not possess the necessary ‘vocabulary’ and
planning journey – merging superannuation
individuals often rely on their employer comprehension to navigate through meaningful
accounts – which is often characterised as
or industry to allocate them to a default interactions with members of the ecosystem;
time-consuming, burdensome, and difficult.
superannuation account. Low engagement 3. Low perceived relevance of retirement
As individuals then enter the pre-retirement
prevails the early-to-mid stages of the planning, as benefits can only be accessed or
phase, they feel a sense of urgency to ‘turbo-
customer journey, leading to the creation of realised in the very distant future (resulting
save’ for retirement, which can unfortunately
multiple accounts, and limited knowledge of in hyperbolic discounting and disengagement
be interrupted by legislative changes
superannuation account balances, projections until later in life); 4. low consumer trust in
(superannuation contribution caps) and key life
and required independent actions (e.g. institutions due to the vested interests and
events including health issues and redundancy,
voluntary contributions). Individuals delay biases of those in the finance sector (which
meaning their retirement savings goals are
seeking retirement planning advice until later has been highlighted in recent government
not realised. Faced with fear and uncertainty
in life, when they realise the relevance and enquiries); 5. Expectations regarding an
in retirement, retirees attempt to ‘hold on’5 | THE CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING
EXECUTIVE SUMMARY
individual’s entitlement to the aged pension as • Feasibility/demand for digitalisation (use of
payment for their lifelong tax contributions; apps, website, video, gamification)
and 6. The emotion-laden process of ageing,
• Enhanced consideration/ shift in consumer
exiting the workforce, finding meaning
mindset towards decumulation (how to
and purpose later in life, and dealing with
better conceptualise retirement needs,
the uncertainties of financial security, and
navigate uncertainties of retirement, and
longevity in the face of fragility, health
evaluating the feasibility of longevity
concerns, and cognitive decline.
products that aid in this process).
The findings from this qualitative stage give
Interventions will be explored in the second
rise to several potential interventions that
stage of the research project, taking an
seek to reach, educate, and engage Australians
experimental design approach. Over the
in retirement planning. Interventions include:
coming months we will hold roundtable
• Sources of credible/trustworthy information forums with interested representatives
as a means of facilitating engagement of the retirement planning ecosystem to
engage in discussion over the findings and
• Messaging strategy targeting
interpretations from stage 1 (qualitative) and
comprehension, language, relevance, and
seek feedback regarding strategy and direction
engagement
for stage 2 (experimental design). Interested
• Integration of emotion to relay relevance parties are invited to contact the researchers.
and facilitate engagementMELBOURNE BUSINESS SCHOOL | 6 INTRODUCTION
7 | THE CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING INTRODUCTION Australia is experiencing an ageing population The researchers conceptualise various The ultimate aim of this study is better (consistent with worldwide trends), thanks providers, contributors, voices, and understand how to communicate and engage to increased life expectancy resulting from regulators related to retirement planning as consumers in the retirement planning process, medical and technological developments. members of an ‘ecosystem’. The ecosystem and what products, policies or structures The focus on the retiree, therefore, has never perspective considers how a community of within the retirement planning ecosystem been more important (Hesketh et al. 2011; subjects (individuals, firms, government & will aid in Australians achieving financial Heybroek et al. 2015; Yeung 2018). With regulatory bodies, industry bodies, unions, security in retirement. To comprehensively this shift also brings a greater likelihood of the media) exist within a given environment grasp the complexity of the retirement outliving one’s retirement savings, making or context comprising of various interactions, planning ecosystem and consumer perceptions, adequate retirement preparedness even more relationships and interdependencies between barriers and drivers of retirement savings, paramount. Research indicates that people them (Pilinkiené & Povilas 2014; Frow et al. we conducted an initial exploratory stage of are saving less in general, and particularly so 2016). In doing so, the ecosystem perspective research of interviews with key informants for retirement (Brüggen et al. 2017). Many allows us to observe the various sources representing facets of the retirement planning Australian retirees are financially ill-prepared of information, influence, and interactions ecosystem, as well as nation-wide focus groups for retirement (ASFA, 2017; Burnett et al. between providers and consumers as well with near- and recent-retirees. This is the first 2013; Heybroek et al. 2015). This dynamic led as interrelationships between providers. An of two major research reports detailing the us to commence a 3-year study to understand initial framework of the Australian Retirement qualitative findings from research conducted in the dynamics and key issues within the Planning Ecosystem is depicted in figure 1. late 2018. retirement planning ecosystem in Australia.
MELBOURNE BUSINESS SCHOOL | 8
INTRODUCTION
FIGURE 1: “AN INITIAL FRAMEWORK OF THE AUSTRALIAN RETIREMENT ECOSYSTEM” (ALTSCHWAGER & EVANS 2018)
Treasury
Family
The Productivity
Commission
Friends
DHS
PSYCHOLOGICAL
DISPOSITION DSS
Spouse
ATO
RETIREMENT PLANNING
Financial & SAVING BEHAVIOUR Retirement
Work planner goal APRA
colleagues/ anxiety clarity
peers
Default Multiple
ASIC
funds & super
options accounts
INDIVIDUAL
General
Industry Additional
Knowledge & newspapers
bodies contributions
Locus of engagement Risk
control aversion
Retirement
Financial
products
publications
Superannuation e.g. CIPRs
funds and
unions Websites/
digitial
Procrastination
content
Media
Financial influencers
planners
TV shows and
Individual’s current affairs
employer programs9 | THE CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING CUSTOMER JOURNEY MAPPING THROUGH THE RETIREMENT PLANNING ECOSYSTEM
MELBOURNE BUSINESS SCHOOL | 10
CUSTOMER JOURNEY MAPPING THROUGH THE RETIREMENT
PLANNING ECOSYSTEM
While the initial intention of the qualitative people aren't planning for it, but I think that While some might argue the limited value
consumer phase was to ask near and it is a big part of people's life journey and in trying to optimise an experience in which
recent retirees about their experience with people are living for longer. There's lots of consumers have minimal interest or enjoyment
retirement planning, focus group participants things to consider. So, the earlier people are (i.e. retirement planning), customer journey
had difficulty in articulating one unique or planning and talking about these things, the mapping is a useful framework in this context.
defined moment of ‘planning for retirement’. better. (G4; Government) The mapping process enables us to identify
Instead, what emerged from the data was a touchpoints that aim to delight or engage
This led us to explore retirement planning from
multifaceted and lifelong series of interactions, customers as well as interactions that are,
a customer journey perspective. Customer
perceptions, and behaviours, not only with or ought to be, seamless, trouble-free, and/
journeys reflect the various interactions
a superannuation fund (or multiple funds or reassuring (Halvorsrud, Kvale, & Følstad
(touchpoints) between consumers and one or
simultaneously and/or over time), but also 2016). Customer journey mapping has been
more providers in pursuit of a specific outcome
with government departments, the wealth utilised in a range of settings, including the
or goal (Lemon & Verhoef 2016; Halvorsrud,
management industry (financial planners/ public sector (Crosier & Handford 2012) and
Kvale, & Følstad 2016). In this instance, the
advisers/ counsellors, banks, stockbrokers, healthcare (Spurrell et al. 2019). In addition,
outcome is an individual achieving financial
accountants), the media, and social connections negative experiences for this style of service
security and independence in retirement.
(family, friends, colleagues etc). Key informants may cause irrevocable damage and severing
Central to this approach is considering the
also conceptualised retirement planning as a of relationships. As Lemon and Verhoef (2016)
various interactions from the viewpoint of the
journey, for example: argue, interactions at one point in time have
customer (Følstad & Kvale 2018). Journeys are
influence on the nature of interactions in the
The most difficult thing is it isn't a one size commonly depicted through customer journey
future – e.g. if a barrier is created early in the
fits all – the complexity around the stages maps, which provide a chronological, visual
customer journey, this negative interaction
of retirement are significant. Those first depiction of key interactions (Halvorsrud,
may cause a permanent sever in the ecosystem
stages of retirement - everyone can imagine Kvale, & Følstad 2016). Customer journey
which may never be recovered. Given the
themselves there but it's those next phases mapping has historically been reserved for
importance of a positive and effective journey
where perhaps the people are less active… experience-centric services that aim to engage
for the consumer (i.e. achieving financial
perhaps they have to activate an aged care consumers in immersive and entertaining
security in retirement), and the tendency to
plan. What does look like and what does experiences (see Følstad & Kvale 2018 for a
disengage from the outset, customer journey
that cost? … There are not great options for recent systematic review), which may explain
mapping is perhaps even more important in
people in that space. I can understand why the absence of retirement planning as a
this context.
research context in this space.11 | THE CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING
CUSTOMER JOURNEY MAPPING THROUGH THE RETIREMENT
PLANNING ECOSYSTEM
I don’t trust [financial planners]. I’ve had a • Partner-owned: interactions “that are jointly These categories support the value of journey
bad experience with one, so – I find they’ve designed, managed, or controlled by the mapping beyond an individual provider
got an [vested] interest… That’s their job – I firm and one or more of its partners” – (particularly through their acknowledgement
would not go and see a financial planner. e.g. an intermediary, distribution partner, of the importance of peers, other information
(Group 2; Metro VIC) agency, consultant. sources, and the contextual environment),
however Lemon & Verhoef (2016) do not
In all respect, I actually won’t go near a • Customer-owned: “customer actions that are
empirically implement this approach. A
financial adviser. We got burned a long time part of the overall customer experience but
number of other papers discuss the merits of
ago when we were young in our thirties that the firm, its partners, or others do not
considering the consumer journey through the
and I won’t go near them. Just do your own influence or control” – e.g. how an individual
ecosystem, rather than dyadic interactions
research. (Group 12; NT) considers their own situation, perceives
with one provider. For example, Tax et al.
relevance of offerings, and uses offerings.
Customer journey research strongly focuses (2013) explores the notion of service delivery
on interactions between consumers and a • Social/external/independent: “the important networks, identifying that from the consumer
provider (e.g. financial planners). However, roles of others in the customer experience. perspective, multiple organisations can
as we take an ecosystem perspective of Throughout the experience, customers contribute to an overall interconnected service
retirement planning, we acknowledge the are surrounded by external touch points experience. Chandler and Lusch (2015) argue
varied and complicated set of interactions that (e.g., other customers, peer influences, for the perspective of service systems, which
occur within and beyond a single provider. independent information sources, encapsulates the larger context through which
Lemon & Verhoef (2016) conceptually environments) that may influence the various ‘actors’ interact through time and
identify four customer experience touchpoint process” (Lemon & Verhoef (2016), p. 77). space. Similarly, Baccarani & Cassia (2017)
categories:
• Brand-owned: interactions “designed and
managed by the firm and under the firm’s
control” – i.e. products, offerings and
communications.MELBOURNE BUSINESS SCHOOL | 12 CUSTOMER JOURNEY MAPPING THROUGH THE RETIREMENT PLANNING ECOSYSTEM focuses on how resource integration occurs approach, we can identify who the individual within service ecosystems. These papers are all interacts with at various stages, where they conceptual in nature. This study is the first (to seek information, and what barriers may our knowledge) to map the customer journey arise for them throughout each stage of the across numerous providers in the retirement journey. The mapping process thus aids in planning ecosystem context. The value of identifying problems and provides clarity on this approach lies in the ability to identify what interactions require further attention to key interactions along the journey where deliver a positive customer journey (Crosier & positive or negative experiences can occur. Handford 2012). Even if a single member of the ecosystem connects with an individual in one unique and specific interaction, research indicates that the individual may perceive providers (ecosystem members) as a collective, as each member contribute to the individual’s overall journey (Baccarani & Cassia 2017; Tax et al. 2013). The implication of this perception is that a barrier or negative experience with one member of the ecosystem could tarnish perceptions of the collective. Through the ecosystem
13 | THE CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING METHOD
MELBOURNE BUSINESS SCHOOL | 14
METHOD
The objective of the study was to gain a (e.g. one-on-one interviews) (Merriam, 2009). populations (namely QLD, NSW, VIC, SA, and
thorough and representative cross-section of In addition, of interest for this study was WA) and conducted focus groups in regional
the diverse range of views apparent both in the language used by individuals; how did locations. We sought the collaboration of a
the Australian retirement planning ecosystem, participants communicate with each other market research company to facilitate the
and the transitioning retiree population. A around retirement planning concepts. In participant recruitment process. The company
qualitative approach was taken as it allows contrast, on-one-one interviews were deemed we selected had excellent access to a wide
us to explore how individuals interpret and more appropriate to gain insights from key distribution of participants and were able to
construct meaning around their experiences informants, as they may not speak openly recruit in regional as well as metropolitan
(Merriam, 2009). While quantitative survey about company information or strategy in the areas. Specific regional locations were
research is very common, a survey cannot presence of others (Merriam, 2009). selected in consultation with the recruiters
capture or reflect the subtlety and emotional to ensure participant numbers could be met.
aspects of retirement planning. A detailed FOCUS GROUPS While recognising that qualitative research
account of method strategy and process can be cannot reach the size and scale to create
found in appendices. There is a preference in Australian research/ generalisability, we aimed to distribute
reports towards the two major East- focus groups to generally reflect Australian
Focus groups were used to capture consumer Coast Metropolitan hubs of Melbourne geographic dispersion using ABS 2016
insights, while one-on-one interviews were and Sydney. While we understand from Census data. For distribution rationale and
conducted with key informants from the a practical standpoint the justification to population comparisons please see Appendix
retirement planning ecosystem. A focus isolate research to these centres, in this 1. In total, we conducted 18 focus groups in
group is a powerful tool for collecting socially study we wanted to reflect the views of a July-August 2018 across all Australian States
constructed data through interactions, broader, more comprehensive and diverse and Territories in metropolitan and regional
conversations and debates created in a group Australian population. We pursued a nation- locations reflecting national population
setting (Merriam, 2009). Participants can wide recruitment strategy, conducting focus distribution; highlighted in figure 2:
agree with others’ comments, add detail or groups in all Australian states and territories.
interpretation from their own experience, In addition, recognising the large regional
or disagree with other participants; these demographic that comprises a significant
interactions provide a depth of insight that segment of the overall Australian population,
may not be achieved through other methods we identified key states with large regional15 | THE CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING
METHOD
The segment of interest for this stage of In consultation with the recruiter, we sought Of the 180 participants recruited, 168
research was near- and recent-retirees; to gain a diverse cross-section of near- and participants attended the focus groups (an
recent-retirees. The recruitment strategy attendance rate of 93%). Appendix 2 provides a
‘Near retirees’ are those who plan to retire
included; lists attendance at each focus group.
within the next
5 years. • Single qualifier: participants had retired
within the past 5 years or intended to retire
‘Recent retirees’ as those who have retired
in the next 5 years.
within the past
5 years. • Equal representation of 1. near- versus
recent-retirees, and 2. gender (50% split)
These groups are the most likely to currently
engage and interact with the retirement • No qualifications were imposed regarding
planning ecosystem as they transition from participant occupation, age, retirement
work to retirement. They are also likely to balances, retirement product use, or level of
be paying attention to regulatory changes expertise/knowledge in superannuation or
and media commentary on retirement issues. retirement planning – this enabled a broad
While retirement planning is ‘front of mind’, it range of retirees with diverse backgrounds
is an opportune time for this group to reflect and experiences to participate.
on their journey, the barriers they have
– Recruitment materials emphasised that
experienced, as well as their expectations and
no particular knowledge in this area was
concerns for their retirement future.
required.
• 10 participants recruited per focus group (to
pre-empt late cancellations/ absentees)MELBOURNE BUSINESS SCHOOL | 16
METHOD
FIGURE 2: FOCUS GROUP DISTRIBUTION
Queensland
Northern Territory
10 metro (Group 9)
10 (Group 12)
17 regional (Groups 10 & 11)
Western Australia
New South
7 metro (Group 15)
Wales
9 regional (Group 16) 20 metro (Groups 5 & 6)
20 regional (Groups 7 & 8)
AUSTRALIAN CAPITAL TERRITORY
10 (Group 4)
South Australia
9 metro (Group 13) Victoria Tasmania
9 regional (Group 14) 19 metro (Groups 1 & 2) 9 (Group 3)
19 regional (Groups 17 & 18)17 | THE CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING
METHOD
FIGURE 3: FOCUS GROUP PARTICIPANT PROFILE
57% 49% AGE RANGE
49-75
FEMALE (95) NEAR-RETIREES (78)
AVERAGE AGE 62.5
43% 51%
MALE (73) RECENT-RETIREES (80)
VARIOUS OCCUPATIONMELBOURNE BUSINESS SCHOOL | 18
METHOD
KEY INFORMANT INTERVIEWS KEY INFORMANT PROFILE:
The second element of the qualitative phase conducted, representing 61 unique ecosystem
33% 67%
included key informant interviews conducted perspectives (on occasion interviews were
with members of the Australian retirement conducted with more than one person from the
planning ecosystem. A detailed account same organisation, or various representatives
of recruitment steps and justification of from within one broad government
‘who’ comprises the ecosystem is included department). FEMALE (23) MALE (46)
in Appendix 3. One hundred and fifteen
Consistent with national statistics of women in CEO and
interview requests were sent, with a 60%
key management positions (17.1% and 30.5% respectively)
acceptance rate. Sixty-nine interviews were
(WGEA 2019)
A WIDE VARIETY OF POSITIONS19 | THE CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING
METHOD
SECTORS (AND SUBSECTORS/INCLUSIONS)
WEALTH
MANAGEMENT SECTOR
ACADEMIA SUPER FUNDS &
Financial planners/ UNIONS
Academics who
advisors, fund
research and Across industry,
management firms,
contribute insight to retail, public sector &
self-managed super
the retirement space corporate
fund advisors, life
insurers
CONSULTANTS
GOVERNMENT
Researchers
Across key
evaluators, service
departments
providers
MEDIA
INDUSTRY BODIES
Journalists, editors,
Representing
authors providing
superannuation and
commentary or
For more detail on the key informant profile, finance sectors
information
please see Appendix 4.MELBOURNE BUSINESS SCHOOL | 20
METHOD
RESEARCH PROCESS AND DATA ANALYSIS customers and retirees more broadly. They Data analysis involved an iterative process
also discussed dynamics, relationships and of reading over transcripts multiple times,
Focus group and interviews followed a
responsibility of those within the retirement creating and grouping ‘codes’ (topics/issues/
semi-structured protocol; this assured broad
ecosystem. Key informants shared their sentiments) within and across different
consistency across groups and interview, while
opinions on the focal changes required in the transcripts (Spiggle 1994). ‘Open codes’ (broad
at the same time allowing participants to
ecosystem to ultimately improve outcomes and diverse codes very closely reflecting
direct part of the conversation and raise topics
for Australians. Interviews were conducted in key words in transcripts) were used as a
of particular importance to them without
person or via telephone and ranged from 30- first step, followed by a process of distilling
constraint (Matthyssens & Vandenbempt 2003).
60 minutes. and consolidating into a smaller number of
Focus group participants were asked about more meaningful codes (called ‘axial coding’),
All interviews and focus groups were audio
their experience with retirement planning; from which themes (overarching topics
recorded, professionally transcribed, and cross-
initially framed from a financial perspective, which include interpretation or presence
checked by the researcher to ensure accuracy
but with flexibility for them to speak about of phenomena) were formulated (Gioia et
and quality of transcription. This produced 995
non-financial topics as well. They shared their al. 2013). The researchers would also move
pages (565,399 words) of textual data.
behaviours and perceptions regarding various between the data and external research, both
elements of retirement planning and reflected The researchers use an inductive approach academic and industry, to see how the themes
upon interactions with various members of to analyse the qualitative data; this means and topics raised in the data compared to
the retirement ecosystem. Focus groups were that textual data is read with an ‘open mind’, other commentary and dialogue in the area
all conducted in person and moderated by the without looking for pre-determined themes (Matthyssens & Vandenbempt 2003).
researcher, typically taking 60 minutes. or topics of interest. This approach allows
impactful themes; from the perspective of the
Interviews covered similar topics, which
participants, not the researchers to naturally
enabled us to compare and contrast consumer
emerge (Spiggle 1994).
and ecosystem perspectives on the same
issues. Key informants were asked to share
their perceptions on key issues facing their21 | THE CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING CUSTOMER JOURNEY MAPPING OF THE AUSTRALIAN RETIREMENT PLANNING ECOSYSTEM
MELBOURNE BUSINESS SCHOOL | 22 CUSTOMER JOURNEY MAPPING OF THE AUSTRALIAN RETIREMENT PLANNING ECOSYSTEM Research on customer journey mapping Interactions initiated by a provider (member highlights the importance of mapping the of the ecosystem) versus customer are visually ‘expected’ or hypothetical touchpoints distinguished through colour, with ‘actual’ (interactions) along the planned journey from touchpoints represented as ‘deviations’ from a provider (ecosystem) perspective, as well the expected journey (Halvorsrud, Kvale, & as the ‘actual’ journey touchpoints from the Følstad 2016). We decided to use the term consumer perspective (Halvorsrud, Kvale, ‘ideal’ or hypothetical journey (rather than & Følstad 2016). Following this approach, ‘expected’), to reflect that ecosystem members we map an ‘ideal’ journey as perceived by were broadly cognizant of the various key informants in the retirement planning consumer deviations from the hypothetical ecosystem (government, industry, media etc.) journey. Interestingly, while key informants as well as the ‘actual’ journey as depicted by acknowledged considerable consumer focus group participants (near- and recent- deviations, many strategies seemed to still retirees). From here we can identify and relate to the ‘ideal’ journey without attempting elaborate upon points of symmetry and to first address these deviations. divergence.
23 | THE CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING
CUSTOMER JOURNEY MAPPING OF THE AUSTRALIAN RETIREMENT
PLANNING ECOSYSTEM
FIGURE 4: THE ‘ACTUAL’ VERSUS ‘IDEAL’ CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING
'IDEAL' JOURNEY (Ecosystem Perspective)
TRIGGERS TRIGGERS TRIGGERS TRIGGERS
Open Statement Online Voluntary New job Merge Purchase Receive Health Retirement Decumulation
super- account & contributions accounts home advice issues plan Retirement
annuation information
account
Children Voluntary
contributions
Government
Marriage Divorce
Open multiple Social/personal Merge Hold Government
ACTUAL JOURNEY superannuation network accounts money
(Consumer Perspective) accounts Media
Advocacy/bodies
Government
Receive advice
consumer initiated interactions provider initiated interactionsMELBOURNE BUSINESS SCHOOL | 24
CUSTOMER JOURNEY MAPPING OF THE AUSTRALIAN RETIREMENT
PLANNING ECOSYSTEM
Step 1: Open (first) super account A lot of people don't realise that they don't Step 2: Consumer engagement from the
have to go with the - I use Vic Super but I outset – reading statements, creating (and
The first step of the customer journey occurs
don't have to put my money in Vic Super. I monitoring) online accounts, and making
when an individual enters the workforce
can get my employer to put it in anything voluntary contributions.
(in a full-time capacity or meeting current
but who - can you even be bothered? That's
work hours/salary thresholds) and requires a After opening a superannuation account,
a real cop out I suppose but I really can't be
superannuation account. Ideally individuals super funds provide account information with
bothered shopping around to see another
would exercise choice when selecting a consumers through several sources; two key
fund that might be a quarter percent better
superannuation fund, or at least have an communication methods include statements
or a half a percent better, so I tend to stick
awareness of the fund they are being defaulted (paper or digital) and online accounts. Key
with what was set up for me at the start of
into; this is preferable as it implies that the informants identified these two methods as
the job and I just stuck with it for 18 years. I
individual has evaluated their options and key engagement strategies;
reckon most people probably do that. (Group
made an informed decision. However, many
18; Regional VIC) We send out annual statements to say, ‘okay,
members are defaulted into a fund and
this is your benefit’… Now we're sending out
product selected by their employer/industry/ Key informants raised potential problems
a video statement as well. So, the physical
union (Productivity Commission 2018). Key arising from employers being responsible
statement which gets emailed to most
informants acknowledged the high level of for selecting superannuation funds for their
members has all the compliance stuff in it.
consumer apathy towards fund knowledge or employees; for example, they may not have
The video statement is much simpler. It goes
selection, and the role that the employer (and adequate understanding of superannuation
for about a minute and it's all animated. It
industry) still play in selecting and defaulting options, leading to poor outcomes for
starts off as a bus ride. So, at the start of
employees into a superannuation fund. individuals.
the year when you got on the bus, you had
Most people don't even know who their Think of a small business owner who is - $24,000. During the year on your travel –
super is with or how many accounts they they're like ‘thank god for Choice’ because and the little bus moves around this map –
have. (M2; Media) without it – picking a default fund for staff you know, an extra $5,000 of contributions
- how are they meant to pick? So, hence came in. From that, we then had to deduct
industrial awards and things like that really fees and taxes and that was this much.
come into play. (I6; Industry Body) Investment earnings were added of this25 | THE CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING
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PLANNING ECOSYSTEM
much and, when you've arrived at the bus Digitalisation and online access were argued People get engaged in their fifties and sixties
stop at the end, you've got $35,000. It's just as making it easier to access information when about retirement. Typically, they could have
a way again of trying to make people just it is front of mind, although a number of key a much bigger impact if they did a lot less a
realise their super is actually growing and it's informants questioned the extent of its use; lot earlier - so how do you help enable people
important and it's easy to understand. (S12; to choose the right investment strategy
We've got a website with lots of information
Superannuation Fund/Union). early, get rid of multiple accounts, sort out
on it. I wonder how much people actually
insurance - getting it set up earlier and
Ideally consumers would have knowledge delve into that. We've recently launched
getting the true benefits of compounding?
of and interest in their superannuation an app where people can see their account
You can actually have a lot more of an
accumulation, read their statements, create/ balance daily. Every minute if they want to.
impact in your thirties than you can in your
activate their online account through which I don't know why they would want to, but it
fifties. (C3; Consultant)
they can also check their balance, change seems to be a thing… but I guess having the
investment preferences, and keep contact [brand] logo on people's phones is a really With regards to contributions, many in
information current. Despite this being a sensible way for us to try and get people to the ecosystem thought that voluntary
critical engagement strategy, a number of think more about. We had quite a significant contributions were essential, but only being
key informants raised concerns regarding its percentage - nearly 10% of the members utilised by a few and only being implemented
efficiency; downloaded the app in the first four weeks. later in life:
(S12; Superannuation Fund/Union)
What we send out is a classic example of We know that people on very high incomes
disengagement… We send an email saying, In addition, individuals have the option to will often make voluntary contributions
"Your statement is available to view," and make voluntary contributions to their super into superannuation but that's largely as
people have got to log on to view it. So, we above the mandatory contribution level a tax minimisation strategy rather than
send out about - last year, it would have (currently 9%). It was widely accepted among really thinking, "Oh well, this is my goal
been over 30,000 emails. 4,000 people key informants that early engagement would for retirement. This is how much money I
looked at their statements… So, if people affect an individual’s overall accumulation, want to have in retirement or the income
aren't even going to look at their statement, and that only small incremental changes were that I want to have in retirement." But, if
you know, what sort of engagement does required to have a large impact in the long people don't engage until they're 55 or 60,
that tell you? (S9; Superannuation Fund/ term. it's pretty hard to then make a substantial
Union) difference to what you can do in your
retirement. (G1; Government).MELBOURNE BUSINESS SCHOOL | 26
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PLANNING ECOSYSTEM
DEVIATION 2.1: DISENGAGEMENT WITH Step 3: Merge/transfer accounts when Deviation 3.1: creation of multiple
FUND COMMUNICATIONS AND PERSONAL changing jobs superannuation accounts
CONTRIBUTIONS
A key event in the customer journey of In reality, many consumers enter new
In reality, many consumers demonstrate retirement planning is when an individual employment without considering how to
no engagement with their super funds, gains new employment. This change in consolidate or transfer their superannuation
particularly earlier in their working lives. Focus circumstance triggers various changes accounts. According to the Productivity
group participants attributed this to various relevant for retirement savings; new salary Commission (2018, p.18), “over a third of all
reasons, from relevance/perceived importance, level, permanency of employment or super accounts are ‘unintended multiples’
low interest in retirement savings, small change of sector. When an individual enters — created when a new default account is
account balances, and competing priorities. new employment, they have the option of opened for a member when they change jobs
transferring an existing superannuation or industries, and the member does not close
Our generation of people… we weren't account to their new employer, or have their old account or rollover their existing
educated enough [about superannuation] their employer open a new account with balance. Much of this account proliferation
to be able to - I wish I had my time all over their default fund. Ideally, individuals would appears early in adulthood and persists well
again. evaluate their superannuation account options, into middle age”. As a focus group participant
I was nursing at 17 and getting a really and merge accounts so that they have only from Bendigo suggested, many people may
good wage and didn't include that in any one superannuation account. Maintaining one not realise that they do not have to use their
superannuation and if I look back now, I superannuation account or selecting a number employer’s default fund. Similarly, a number
wish the hell I had of of accounts based on evaluation and decision- of respondents discussed not knowing that
Even for the generation of young people now making rather than apathy is preferred. account consolidation was possible, or how to
in high schools. I've got two young daughters Multiple accounts each incur their own fees, go through that process.
and thankfully they're good savers, but a lot which can erode balances, and likely include
Male: You can’t really transfer?
of their friends aren't and they don't have default insurance that may lapse or become
[superannuation accounts] … I don’t know
savings accounts and they don't look at invalid if accounts are not active.
much about them, but I’ve got money in
what's going to happen in the future. They
It's a lived experience that people have Australian super.
only live for now and, I mean, that's okay
multiple super funds and inside those Female: You can amalgamate.
for a certain period of time but there comes
multiples of super funds, having some with
a time when you think, "Hang on, I've got Female: You need to amalgamate. You need
low accounts, especially the inactive ones,
to look beyond this and try and set myself to roll them over to cut the fees down, yes.
that are eaten away by administration fees
up, not so much for retirement but for life." Female: You’ll be paying more fees.
and default insurance. (I4; Industry Body).
(Group 17; Regional VIC)27 | THE CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING
CUSTOMER JOURNEY MAPPING OF THE AUSTRALIAN RETIREMENT
PLANNING ECOSYSTEM
Female: You can do it through the ATO site One of the real challenges is for the subset Key informants also acknowledged subsequent
or the human services website. of retirees who don’t own their own home issues that have resulted from home
Female: If you’re a customer, they will chase because the rental assistance they receive on ownership as part of retirement strategy.
it and do it for you. top of their age pension is only about I think First, retirees are often reluctant to downsize
$3,000 a year. You can imagine if you rent or enter reverse mortgages to fund their
Male: Really? (Group 12; NT)
in a capital city and you’re on a single age retirement. This could be in response to the
Perhaps a more focal issue was the perceived pension, which is only a bit over $20,000 a perceived security that home ownership
difficulty in merging accounts, which inhibited year and then you get an extra $3,000 for provides, or reflect retirees’ wishes to leave
focus group participants from successfully rent assistance, a lot of your income is going the family home as an inheritance to their
consolidating their accounts (this is discussed towards your rent. So, there is a split among children.
in detail in Deviation 4.2 ad hoc touchpoint: the population where some people who are
Female: There’s been a few unscrupulous
Merging accounts). The presence of multiple retired are actually able to live in reasonable
companies, where people have come out
accounts has become such a pertinent issue comfort if they own their own home and
of it with nothing - when that happened I
that government legislation has been created they get the age pension and they have a
thought ‘how lucky are we, we’ll be on the
to manage the process of consolidation. little bit of savings on the side. Then there’s
pension, but we’ll have our home’…
other retirees who will really just struggle
Preventing multiple accounts Female: Well, our financial adviser said, “How
day-to-day because the amount they get is
from proliferating, those kinds of do you feel about selling your house and
maybe inadequate and the people who are in
recommendations are largely sensible. (C4; renting? You can make more money out of
those kind of groups often have less private
Consultant) the money you have from the sale of your
savings as well. (C4; Consultant)
house and rent... And I’m thinking… I’m going
Event: Purchasing a house
Housing certainly is the golden key to [gestures hand fanning face] ... I’m sweating.
Purchasing property is one of the largest retirement. If you fully own your own home, That was the strategy. He said, “I’m looking
financial events in an individual’s life you’re probably going to be okay. You’ll at it financially, not from the heart like you
(Commonwealth of Australia 2008). As such, probably be alright. If you do not fully own are.”…
home ownership was raised as a significant your own home - if you go into retirement
Male: Look for another financial adviser.
and complicated consideration within the with a mortgage and you try and pay down
Female: That’s exactly when you need the
context of retirement planning. Key informants your mortgage on a part pension - if you’re
security of your own home, when you retire.
raised home ownership as a major indicator of one of the 70% who gets a full or part
pension, our numbers show that you can’t do Female: Yeah, it’s your home, you know?
an individual’s financial stability in retirement:
it. (M4; Media) (Group 7; Regional NSW)MELBOURNE BUSINESS SCHOOL | 28
CUSTOMER JOURNEY MAPPING OF THE AUSTRALIAN RETIREMENT
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Focus group participants further reiterated In 2003, I decided to buy a house that One of the ways you might want to
these sentiments towards home ownership. would fit our retirement plan. So, we bought access equity in your home is to sell it and
However, some participants expressed one back then and we’re hoping to sell the downsize. There’s relatively little of that
additional motivations for home ownership; principal property and then move into that going on and obviously reasons include the
namely using the home as a retirement savings one at some stage in the future… What’s my tax disincentives to doing that. That’s also
‘tool’ in replacement of superannuation. Where biggest fear? That we’ve gambled a little on the age pension side as well and how
superannuation was considered perhaps bit too heavily on the property market. the home is taken into account in the assets
unstable, less secure, or difficult to understand So, we’ve got a lot of money tied up in test. That tends to cause over-investment
its value or ease of access, the family home properties. Who knows if that was wise or in housing amongst retirees and can lead to
was seen as tangible, secure, and something to not. (Group 9; Metro QLD) inefficient use of housing for the community
be ‘held on to’. more broadly… elderly people living in large
A further implication for the ‘asset rich, cash
houses… optimally they would move to
I think your prime residence is the best tax- poor’ retiree was the potential to better
something smaller, more manageable… then
free way of accumulating money that I could navigate the aged pension means testing. Both
a family would be able to occupy that place.
recommend to anybody… Forget a super key informants and focus group participants
(A5; Academic)
fund. (Group 13; Metro SA) discussed the strategy of owning homes of
considerable value and/or size, arguably more
Key informants and a few focus group
than what they needed as empty nesters, to
participants acknowledged the inherent risks
both maintain a sense of security from the
in over-reliance on property, given property
home as well as qualify for aged pension
market volatility. The term ‘asset rich, cash
entitlements.
poor’ was used to describe retirees who owned
considerable property as their predominant While you’re working, get the biggest and
source of wealth in retirement, rather than best house you can possibly afford and then
balanced across independent savings and/or trade back as many times as you need to, to
superannuation. make your life comfortable. (Group 13; Metro
SA)29 | THE CUSTOMER JOURNEY THROUGH RETIREMENT PLANNING
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PLANNING ECOSYSTEM
Step 4: Seeking financial advice Female: … for the peace of mind. For me, it’s Deviation 4.1: Delayed/absent financial advice
peace of mind. (Group 2; Metro VIC) seeking, and further information influences
Seeking financial advice can be a great
The bottom line is whether you like a
opportunity to gain clarity about savings or Our research suggests that many people
financial planner or not, they’re the ones
investment options, monitor the progress postpone seeking advice until much later
that know their job… You’ve got to trust
of balance accumulation, and develop an in their working lives or choose to not seek
somebody. (Group 1; Metro VIC)
informed strategy towards retirement saving financial advice at all.
to ensure financial security and expected We provide advice but at the end of the day,
It’s not up until they change jobs that they
lifestyle in retirement. In an ideal journey, they make the decision, but we try and give
have to think about it and then they may
consumers who require financial advice would them as much relevant information without
start getting some information from their
1. Seek advice early, 2. Action this advice, such trying to confuse people so that they can
new employer about where they put their
as making changes to investment preferences make an informed decision. It’s like going
super and that’s probably the only other time
or modifying voluntary contributions and, to a surgeon and being told you need this
that they have some sort of engagement
3. Monitor this advice over time and return surgery but here are the risks, what are
with a super fund up until the point where
to the financial adviser to ensure adequacy you going to do? You’re going to have the
they get to about 53. Then they start to
of their plan as circumstances change. Key surgery because you probably don’t really
mention to their friends and they start
informants who advocated for financial advice understand the risks, but you trust the
thinking I need to do something about this,
identified a range of benefits. These include surgeon. So, I think it’s a similar relationship
I need to go and talk to someone. At that
the ability to filter only relevant information at the start. I think it’s really helping clients
age, they’ll go and find their friends to give
to help clients make decisions and properly prioritise what their goals are… try and focus
them a recommendation on an adviser or an
conceptualise their retirement needs. Focus the mind on what is the key thing that is
accountant that might be able to help them.
group participants who used a financial adviser important to people? Once they decide then,
Having failed that, they might go to a bank
valued the expertise, ability to navigate a it’s much easier to go through the planning
because, although they don’t like banks, they
complicated sector, and the assurance an process. There’s no guarantees they’ll get
feel that the banks are not going to rip them
adviser provided them. what they want, but there’s a bit more
off or, if it does, it will pay it back. (S14;
confidence because they’re taking control
Female: I have a financial planner now. Best Superannuation Fund/Union)
and they’ve made the decision on not having
thing I ever got… they’re worth every cent
the holiday or having a certain standard
you pay. As you say, you get what you pay
of living or working a bit longer because it
for.
will give them more certainty. (W2; Wealth
Female: … for your self-confidence that, yeah.
Management Sector)MELBOURNE BUSINESS SCHOOL | 30
CUSTOMER JOURNEY MAPPING OF THE AUSTRALIAN RETIREMENT
PLANNING ECOSYSTEM
Delayed advice seeking seemed to result from Furthermore, trust in financial advisers was In addition, focus group participants identified
various factors; for example, there was low raised as a significant deterrent, a point which further sources where they sought information
perceived relevance in seeking advice earlier has been exacerbated since recent government on retirement planning; social/personal networks;
in life or when account balances are low. In enquiries into banking, financial services, and the media; government departments; advocacy
addition, price was a strong factor inhibiting most recently superannuation. groups and industry bodies. Online searches
people from seeking advice early, if at all. often helped people find information sources,
Male: I don’t trust [financial planners] …
Price posed an obvious financial barrier, whether government, news, consumer websites,
but also communicated to some focus group Female: No, you don’t trust them… you take or even connecting through forums;
participants that financial advice might only be their advice with a pinch of salt.
Male: … It’s alright to listen to them, but I I usually just type in ‘super’ or ‘retirement’.
necessary for those with a more complicated
wouldn’t take their word as security, as “Oh One thing leads to another. You get into a
financial situation (i.e. investments in shares or
yeah, I’ll go down that track.” I just wouldn’t forum somewhere along the line and all of a
investment properties).
do it. (Group 1; Metro VIC) sudden, someone’s got the same problem that
Female: I think it would be a lot better if we you’ve got… they’ve been there, done that. They
You hear those stories as well and the
have access that doesn’t cost the earth to already know the answers. (Group 14; Regional
banking Royal Commission and all that
give advice on how we plan for retirement. SA)
going on at the moment. Some of the stories
We’re on a limited income situation but how
coming out of that doesn’t give you a lot of Mine has been Money magazine, ATO, my
can we make the most of what we’ve got?
confidence in these guys. (Group 18; Regional accountant and Trish Power who wrote Super
We just don’t know…
VIC) for Dummies… She had up until recently a free
Female: And, if you’ve got to go to somebody,
newsletter which is just excellent and lately you
you haven’t got the funds to pay for that As a result, many individuals postpone seeking
have to pay which I think works out at about
sort of advice and then you’re caught in financial advice, or seek advice from a variety
$2 a week and I find her really good. (Group 7;
circles. (Group 17; Regional VIC) of other sources. A number of focus group
Regional NSW)
participants reported engaging in ‘advice
I think also one of the reasons I’ve never shopping’, where they would take advantage of Male: There’s a very good e-newsletter that I
been, I’ve never had enough money… if you’ve free preliminary advice. get. It’s called Your Life Choices.
got lots of money, maybe, if you can find a
I’ve been to about 8 financial advisers, all Female: Oh, I get that too.
financial adviser you can trust. But I think I
can work out where I should put my money with the free visits. The best advice I’ve had Male: That has a lot of good information.
and where I shouldn’t. I think you’d need so far has actually been through a bank Male: It does, doesn’t it?
to have a lot of income before a financial and that is an ongoing free visit, no charge. Female: That’s how I heard about this new
planner would come into it. (Group 13; Metro (Group 14; Regional SA) budget thing with the downsizing. (Group 1;
SA) Metro VIC)You can also read
