In an edited extract from our sister publication, AFR Smart Investor, Patrick Commins reveals which financial-product providers get your vote in the magazine's annual SMILES service survey.
KIM BEYER was surprised recently when she received a call from her credit union, mecu.
"Hello, Ms Beyer," said the cheerful voice at the other end of the line. "I'm just calling to let you know that we have a number of water-free car-wash kits, in case you were interested."
Smelling a sales pitch, Kim put it to the credit union representative straight up: "How much?"
"Oh, no!" said the mecu employee, clearly mortified. "We're calling to let you know there's one waiting for you at your closest branch."
Kim says: "Now that's what I'm talking about!"
Not every service provider can, or even needs to, go quite to those lengths to keep their customers happy and loyal - but it sure doesn't hurt. As the sharemarket tanks and the fear of recession results in cost cutting on a massive scale, finding providers that still put you and your needs first has never been more difficult, or more important.
As such, the annual Smart Investor League of Exceptional Service, or SMILES, survey arrives at a crucial juncture. Our readers rated how satisfied they were with their various financial service providers. For the first time they also told us which was their best overall to give us our "favourite provider" award.
How did the rest look after their customers? The picture painted by our respondents was grim rather than desperate. While average satisfaction ratings were down on last year, the general gloom did give some providers the opportunity to shine.
Superannuation members, for example, who would normally relegate their annual statements to the back of the filing cabinet - or the bin - are now scrutinising their returns like never before.
"If you're looking for a silver lining [in the negative returns], it's that super fund members will be more aware and interested in their super investments," says the chief executive of AustralianSuper, Ian Silk, which was our highest-polling superannuation provider.
Unsurprisingly, given the past year's rotten investment performance, excessive fees were high on the list of gripes, while our readers emphasised the importance of information and communication.
Finally, respondents gave the biggest banks a bit of a bashing, rating smaller banks best in the day-to-day banking and mortgages categories.
So here they are: the country's top financial service providers as voted by thousands of AFR Smart Investor readers, starting with the inaugural favourite provider, Bendigo Bank.
AUSTRALIA'S FAVOURITE PROVIDER > BENDIGO BANK
"Bendigo is a great bank. I go into a branch twice a week. The staff all have great personalities and the service is exceptional." Bruce Warwick, Victoria, on Bendigo Bank.
Russell Jenkins, chief general manager of retail customers at Bendigo Bank - kept as a separate brand after the merger that created Bendigo and Adelaide Bank (BEN) - tells a story of when the bank first "reluctantly" introduced fees more than a decade ago.
In Melbourne or New York, bank executives can inform customers of a fee increase via mail or news release and confidently leave the office, free to mingle anonymously among irate account holders.
Not so in Bendigo. "That lunchtime [the day fees were introduced]I left the office in Bendigo and went down to the local fruit shop to get a banana and an apple for lunch," Jenkins says. "And I just got attacked because the local people knew exactly who I was.
"It sounds simplistic but I got this instant feedback. If you're living and working among - and listening to - your customers, then you respond to their needs rather than dictate terms to them."
The anecdote from the man who implemented the Bendigo community banking model shows the advantage smaller service providers have over their larger competitors when it comes to providing that personal touch for their customers.
This year Bendigo Bank was voted Australia's favourite provider with the best overall service. Interestingly, banks dominated the polling. Members Equity ranked second-highest, with Macquarie Bank - part of Macquarie Group (MQG) - just behind.
Banks may have polled highest because of the variety of services they provide. It may also be because our association with our lenders has historically been one of the more enduring commercial relationships in our lives.
Credit unions and building societies score highly on service but they struggle to compete with big rivals on price and product variety. Bendigo has successfully trodden the fine line between a community feel and providing the major banks' perks.
Jenkins says focusing on strengths and building competitive advantage is the key to keeping pace with the lending behemoths. "Our greatest strength is the closeness to the customers and the communities in which we live," he says.
SUPER FUND > AUSTRALIAN SUPER
"I only rolled over my super to Colonial last year but I feel confident in their ability to manage my money over the longer term." Eileen Hetherington, ACT, on Colonial First State.
Highest score > AustralianSuper, 77% Average score 2008 > 65% Average score 2007 > 70%
This time last year it was all sunshine for superannuation providers, as happy members adopted a laissez-faire, "if it ain't broke, don't fix it" attitude to their super funds.
But this year our respondents marked down heavily their level of satisfaction with their super funds, as negative returns shocked members. The industry average satisfaction rating, according to our survey, was 65 per cent, down a significant 5 percentage points from last year.
Investment returns were a specific target this year, rating at 56 per cent compared with 70 per cent last year. But our readers were about as satisfied with their super providers' efforts to keep them informed.
AustralianSuper, an industry fund with 1.4 million members, has for the third year running polled highest in the category of superannuation, with an overall satisfaction rating of 77 per cent. This is unchanged from last year, which reflects well on the fund given the general disenchantment shown towards retirement savings this year.
AustralianSuper chief executive Ian Silk was determined during the good times that his fund wouldn't rest on its laurels, even in the face of member indifference.
"We started working with this sort of environment in mind some years ago, when investment returns were very strong," Silk says. "We invested very heavily in improving the quality of service we provide to our members."
Silk says the fund's call centre receives about 1 million calls a year, while the use of its website has exploded, taking it to more than 2 million hits a year. Like other funds, it also has a large team of relationship managers who visit workplaces to provide information and education to members.
Just behind was a government fund, State Super, on 74 per cent, while the next best was retail fund Colonial First State on 68 per cent.
You were particularly unhappy with the investment returns of AMP and BT/Westpac funds, each rating below 50 per cent.
Taken as a group, industry super funds outpolled heavily their retail peers but, in general, were too fragmented an entity to provide us with a reliable score with which to judge many of them.
HOME LENDER > MEMBERS EQUITY
According to Tony Beck, head of corporate and social responsibility at Members Equity - our highest-polling lender for home loans in 2008 - the focus of the industry fund and union-backed bank is offering a transparent product with the highest level of genuine service.
"In terms of what we think working families and working people want, it's no bulls, no hidden fees, no honeymoon rates," Beck says.
Respondents gave the bank a satisfaction rating of 88 per cent on whether its fees and charges were reasonable, taking it to a total of 84 per cent, ahead of the 72 per cent average.
Lenders ING and Suncorp-Metway also rated above average, with satisfaction levels of 75 per cent and 73 per cent respectively, making them the second- and third-highest ranked home lenders in this section.
Home lending was the only category in 2008 to rate higher on average than in 2007, although only the big five banks were in the final ranking last year.
BANK > BENDIGO BANK
"Having moved from Westpac and NAB, ANZ is like a breath of fresh air." Gail Freeman, ACT, on ANZ.
Highest score > Bendigo Bank, 82% Average score 2008 > 72% Average score 2007 > 77%
Bendigo Bank - voted Australia's favourite provider in our survey - unsurprisingly also topped the best bank list in 2008 with an impressive 82 per cent satisfaction rating. Not bad in a country where "banker" is a grave insult in rhyming slang.
The result brings an end to Australia and New Zealand Banking Group's (ANZ) three-year reign, as the major could only manage 71 per cent, down from 79 per cent last year.
A sense of community and "old-fashioned" good service set Bendigo above its bigger banking peers. Surveyed readers said they liked Bendigo's branch opening hours, easy-to-access staff and its excellent online capabilities.
Online banking functionality rated at 86 per cent, matched only by how easy it was to transact and communicate with the bank.
The demotion of ANZ to fifth spot was to some degree symptomatic of increasing disenchantment with major banks, which were rated on average 4 percentage points lower in this year's survey, at 69 per cent, against 2007. It must be sombre news for institutions that have just been forced by the Federal Government to make it easier for their customers to switch to a competitor.
Of the large lenders, St George Bank, at 71 per cent, was the only one to maintain a satisfaction rating of above 70 per cent.
Despite not being commonly thought of as a retail bank, Macquarie Bank was voted second best in the day-to-day banking category with 80 per cent. Macquarie achieved the highest ratings among the banks for clarity of information provided and for product features. Suncorp-Metway at 76 per cent and HSBC at 73 per cent took out third and fourth places respectively.
To be fair to the majors, while they scored lower this year, their relegation in the SMILES league tables had much to do with the fact a significantly higher number of surveyed readers now bank with other institutions, leading to their inclusion this year.
Bendigo Bank, which always scored highly but previously missed our minimum customer number, is a case in point.
The survey also revealed our readers hated automated answering services (no surprise there) and granted high marks to those institutions that gave them quick access to a "real" person.
But what really got on our respondents' nerves were the double standards by banks that were quick to pass on rate rises to borrowers but more sedate in passing on higher rates to depositors.
The question now is whether banks, which have worked so hard in recent years to improve customer service, will be able to keep customers happy while trying to manage costs, as profits decline for the first time in 15 years.
HOW THE SMILES SURVEY WORKS
Step 1 We survey AFR Smart Investor readers on the financial institutions they use. Readers are asked to rate their institutions on value for money, quality of customer service, the level of fees and charges and the product features offered.
Step 2 Based on responses, we collate client satisfaction scores and show them as a percentage. Organisations that don't attract enough responses aren't in the running for our "highest score" accolade.
Step 3 We identify organisations with the most satisfied customers across eight provider types. This year, we also introduce an overall award: Australia's favourite provider.
Read the complete article in December's AFR Smart Investor.