Consumer intelligence - is there any?

I attended a conference the other day conducted by, arguably, Australia's leading superannuation fund ratings company, SuperRatings. There you are... my free plug for the day, given because I think these guys do a great job and, most of all, through excellent PR work have convinced us all that they are the leading ratings agency. But I digress.

The conference included a media panel of august journalists from daily newspapers. Notably TV, radio and online media were missing, although newspapers would claim to be the rightful providers of the latter. One journo queried why SuperRatings would readily post info on its top 10 super funds, when it would not readily provide a list of the worst performers - in recent times, these being funds who had lost more of our retirement savings than others. The debate that followed was around assessing fund performance - short term versus long-term and whether it was valid or even misleading to provide short-term numbers.

This led to the point of this blog entry - consumer intelligence. The journos argued, I believe with some justification, that consumers were smart enough to work out that when you're investing for 30 years or more, you should focus on long-term performance - even if you publish short-term (one year comparisons). This is markedly different than the industry view, which is that consumers have poor financial literacy and that it has to spell everything out chapter and verse in monosyllables that, in the words of one of Australia's more colourful Prime Ministers, Gough Whitlam, "even you can understand".

The interesting thing is that the industry, 'guided' by its regulators, then goes on to produce reams of technical and legalistic 'disclosure' information that no one can understand unless they are, not only financially literate, but literary scholars. The point is that by marking consumers as reasonably intelligent, the journos produce a much superior communications outcome.

As I hear the industry lynch mob gathering in the corridors outside my office, I appreciate this is heresy from an industry insider. Our lawyers, actuaries, investment specialists and others will loudly decry the lack and distortion of detail in the general media and even in the industry ratings surveys. They are obsessed with the ifs, buts and maybes that permeate finance - investment allocations within portfolios, risk tolerance, quality of advice.. yadda.. yadda.. yadda...

The point is that punters just want things spelt out in plain English. They want unqualified statements and commentary to help them understand. And I believe they make allowances for media shortcomings. If their fund has stuffed their retirement planning in the last twelve months, or even the last month, they want to know about it. League tables are easy to understand. They say "my fund is great" or otherwise. I believe they are smart enough to not move their money straight away, but they are alerted to the fact that they better keep a closer eye on things over time.

And guess what? This means they are suddenly more engaged with their finances and who is managing their money. Immediately, the industry can stop paying lip service to achieving greater engagement. This is all good......Isn't it?

Oh, wait a minute! That means we're all going to be more accountable and maintain or even improve performance across all facets of the business. Remind me, did we ever assume we would be dealing with informed and engaged consumers in the brand strategy manual? I hope so.