Superannuation: Why Members Always Seem Disappointed With Their Returns.

The returns you report to your members in workplace presentations, will always leave them disappointed. They will always want more.

It does not matter how well your fund performed, they could have made more money. It’s not a reflection on your investment strategies, but rather member bias to the situation.

Return Missing Meaning.001

When we see the return from the last 12 months, our first reaction is to find meaning in the result. Does it meet my expectations? Is it good or bad? How does it compare to other investment strategies within the fund? How does it compare to other funds? Without something to compare against we don’t know how to react to the situation. This is the members search for meaning.

But this search for meaning can only ever lead to a feeling of missing out. It’s not missing out from what your fund has done – it’s missing out from what could have been.

Greed Over Gratitude

Compare two different returns ~ 2% and 20%. The member reaction will always be the same – just on different levels.

If there is a 2% return, the member will compare it to other strategies. If 2% is the best return in the market, they will be glad they were with you, but disappointed that they made no money. If it’s not in the ball park for what other funds have returned they will be furious!

If they make a 20% return they will still compare – it’s the natural thing to do. If 20% was the best in the market they will be ecstatic, but they’ll still have a twinge of disappointment. They’ll be disappointed that they did not invest more – even if they didn’t have the money to invest.

This reaction is the clashing of two human traits – greed and loss. Greed is well understood – we always want more.

What is less understood is that we are more likely to mourn what we have lost before we celebrate what we have won. This forces our greed to appear before our appreciation of growth comes through. It’s a human trait that we must learn to deal with. This is the triumph of greed over gratitude.

When we compare we are always seeing what we lost.

What does this mean for Super Presentations?

If comparisons induce disappointment, be judicious in how you share them. Know that every time you share a comparison you create a sense of disappointment within your audience. This can be a good thing if you have the right strategy to engage them for a planning meeting.

However, if you are just asking people to make an appointment you will be left with an empty diary.

Would love your thoughts on this, please leave a comment in the comment section below.

Cheers

Darren

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