The self-managed super fund (SMSF) market is reaching its maturation phase. The challenge facing participants in the market now is how to identify where new growth opportunities lie.

So how do we eke out comparative advantage, drive efficiency, retain existing customers, attract new customers, achieve greater share-of-wallet and build a great reputation in the current operating environment?

Our experience (and a ton of behavioural science research) shows us that the key is to service consumers’ underlying needs by identifying their driving motivations, the way they process information, as well as the experiences and the relationships they prefer. Critically, it’s about systematically manufacturing reliable and valuable relationships at scale – and helping consumers articulate this value. However, one size does not necessarily fit all.

A cookie-cutter approach to servicing clients is unlikely to win over the broader market. Currently, many segments in the market are feeling under serviced and ignored. This is evidenced by the disturbingly high number of trustees on the “returning tide” – finding that SMSFs aren’t all they were cracked up to be for them.

The basis of behavioural science is embracing that individuals don’t have perfect information or rationality to make decisions and they do not even have perfect self-interest (despite the contentions of classical homo economicus theory). We all suffer, in a sense, from inertia, and a fear of change. It takes strong emotive motivations to get us to shake off the status quo bias, build confidence to act, make decisions and effectively improve our situation.

Desperately seeking certainty

One of the major underlying needs investors have is for certainty. This is the fundamental problem they face: how do they make decisions today about a future that is uncertain? Curating decision-making information, doing the math and weighing up the probabilities is hard and bias-ridden – this creates a tension that needs to be resolved.

Many seek to resolve this tension by searching for someone or something they can trust – who can they pass some of the responsibility to, provide some guidance or at least receive reassurance and validation for the decisions they need to make? More importantly who can they trust in an industry perceived as mired by self-interest, unscrupulous behaviour and full of promises from people who are just trying to sell them something they don’t need?

Convenience is another key factor. This is the effort that’s needed to decide, and the friction encountered executing it. These ‘moment of truth’ pain-points become critical barriers stopping us moving forward and reaching our goals. An effective solution makes it easier to move past these and reduce the “time, complexity and hassle factor”.

Inherent in this need to resolve uncertainty is the desire for a modicum of objectivity – facilitated by structure, systems and habits that give us some confidence we are corralling our emotional influences – making the best decisions we can. Essentially this is a search for “bounded rationality” – that is, “the need-to-knows for someone like me”. We are not looking to be educated, we just want to solve a problem.

Ultimately as human beings we are looking for a narrative – the story we can internalise.

We want to be able to articulate how it works, why it’s safe, and why it’s valuable. If the trustee of an SMSF cannot explain to their partner why they’ve made a particular decision, why it’s worth entertaining taking a risk for or dealing with additional complexity, they are not going to move forward.

Take a different view

Fundamentally, we need to flip perspective. The financial services industry traditionally approaches its markets with product as a starting point. We tend to look at what is out there now and try to make it better. We convince ourselves we have a competitive offer, and then wonder why consumers are not flocking to us.

We need to put ourselves in the shoes of the consumer – they do not necessarily see the problem the same we see it. The “jobs-to-be-done” framework helps us understand the problem they are trying to solve, how they articulate that challenge, and what they see as the key barriers stopping them from solving it.

We need to understand how rationalised functional benefits link to the underlying emotional needs they satisfy, exposing where real value lies. In the end, it’s really about servicing their emotional and “core values” needs: peace of mind, reducing tension, self-identity, FOMO, whatever it may be.

And finally, there’s the customer experience: how do we reduce effort, how do we make it easy, how do we make it a unique, relevant, pleasurable experience for them? These all form the basis for critical value assessment frameworks and allow us to fully unpack what value really looks like to various segments in the market, and to know what strings to pull to resonate with how consumers articulate their conceptions of “value”.

The ability to expand your offer to currently underserviced market segments and improve operational efficiencies is where the next wave of growth in the SMSF market is going to come from. Mining these new segments effectively and clearly articulating the value of your offer are the critical tickets to entry.