Communications & Marketing

2021 readability scorecard for Australian superannuation funds

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In Australia, superannuation is important and the decision to invest with the right fund is important. Over 12 million Australians presently have a superannuation account, and over four million have more than one account. The superannuation sector in Australia manages $3.3 trillion in assets. Yet only 35% of Australians know the actual value of their superannuation.

In this whitepaper, Ethos CRS examines the readability of documents and content produced by Australia's largest superannuation funds.

As a starting point:

• Fund members should be able to easily read what their funds put in writing.

• Clarity helps members make informed financial decisions. Retail and industry superannuation funds have a duty to be open and clear about the financial services they provide, the performance of funds they manage, and the rights and responsibilities of fund members.

All superannuation funds face the challenge of delivering complex information to a diverse range of members. Levels of financial literacy vary widely.

Producing readable content is an important first step if funds are to address this challenge. In this scorecard, Ethos CRS:

• Summarise key concepts of readability.

• Detail findings from their analysis.

• Discuss issues that arise from their findings.

• Make recommendations to address the communication challenge.

• Explain their research method.

Readability measures for superannuation

To develop a readability score, Ethos CRS selected the largest 10 industry funds and the largest 10 retail funds based on Australian Prudential Regulation Authority rankings. The readability of the documents produced by these top 20 superannuation funds was then compared using Ethos CRS readability benchmarks.

Four documents were downloaded for each of the 20 funds from company websites, specifically:

• Product disclosure statements.

• Financial services guides.

• Annual reports.

• Company policies.

In total, 80 documents were analysed. The metrics used to derive readability scores for the documents were grade level, average sentence length and use of active voice.

Following standards outlined in the Australian Government Style Manual, benchmarks were set for each individual metric to derive the Ethos CRS readability score for each document and an average score for each fund.