8th Nov 2018
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Unlikely bedfellows team up to offer discounted super
Author: Olga Galacho
New super fund with low fees

A day after think-tank the Grattan Institute called for lower superannuation fund fees, financial giant Mercer and discount online retailer Kogan.com have delivered.

The two unlikely bedfellows are joining forces to launch a “no-frills, ultra-low fee” super fund early next year.

The partners say they will be able to keep fees low by offering investment options that track index funds.

Index funds tend to invest passively in shares offering a broad exposure to markets. They are considered less risky, minimising the need to charge extra fees for active management of a portfolio.

The product will be called Kogan Super and joins a stable of Kogan services including insurance and mobile phone plans.

SuperRatings executive director Kirby Rappell told YourLifeChoices the product would need to beat the Hostplus Indexed Balanced Fund annual fee of $113 (based on a balance of $50,000) to claim to be low-cost.

“We are entering the age of disruption in the super industry, with a lot of players eyeing opportunities to offer their own products,” Mr Rappell said.

Companies without a traditional banking background that have recently launched differentiated super products include Virgin, Spaceship and Acorns.

“I believe the industry is changing and Australians will soon be able to choose from more white label products that are coming to market,” Mr Rappell said.

“When it comes to returns, asset allocation is key and what we have found in the past 15 years is that the funds which have done well are those that have invested in infrastructure, alternative assets and hedge funds, which are unlikely to be offered by an index-based fund.”.

A number of Mercer super products scooped top spot in SuperRatings’ awards this year. 

Meanwhile, in a note to the Australian Securities Exchange, Mercer chief executive Ben Walsh said the new super partnership marries Kogan.com’s expertise as an e-commerce leader with Mercer’s global scale and know-how as a leading superannuation and investment services supplier.

“As one of the largest superannuation providers in Australia, with more than $US11 trillion under investment advisement and more than $US240 billion of assets under delegated management globally, we are able to use our global scale and expertise to drive competition and get better results for clients and members,” Mr Walsh said.

“In an industry where scale and cost efficiencies count, this new alliance will enable Kogan to create value at scale through their trusted online brand and huge customer base.”

Kogan will be aiming to manage a share of the 28.6 million Australian superannuation accounts, which represent a combined total of more than $2.7 trillion in assets.

With more than 1.45 million active customers, Kogan.com is one of the nation’s largest e-commerce companies.

“This partnership will deliver a no-frills superannuation offering with ultra-low fees that will enable Aussies to retain and preserve more of their personal wealth,” Kogan.com executive director David Shafer said in a statement.

“Albert Einstein once said that ‘compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it’.

“Every Australian should consider whether the power of compounding is working for them through low fees, or against them through the ongoing erosion of their wealth by high fees.

“Kogan.com’s mission is to deliver price leadership through digital efficiency and we are proud to be able to help Australians preserve more of their hard-earned money by delivering an ultra-low fee superannuation solution.”

Would you consider switching out of your super fund into one with very low fees? Apart from fees, what else matters to you about your super investment?

How does your Super affect your overall retirement income? The RetirePlanner™ tool has all the information you need.

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    Financial disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.





    COMMENTS

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    Lothario
    7th Nov 2018
    6:44pm
    If it takes money away from Industry fund, then it can only be a good thing.
    Lower fees and consistent returns for the average individual.
    Better than having union thugs living high off the hog off workers hard earned income
    MICK
    8th Nov 2018
    10:30am
    Is that you OG? A total load of crap. You are completely aware that Industry Funds are killing Retail Funds. That's the only reason you are making the above comment.
    As for 'paying unions' representatives are only paid a wage from my understanding which then goes back to the union to offset the (wage) cost of the member attending meetings, etc.
    What you do not bother to mention is that Retail Funds have a whole hoard of top end of town leeches doing the same work as union Board members but being paid many multiples of their basic wage. I call your comment bullsh*t.
    maelcolium
    8th Nov 2018
    11:53am
    Are you a troll Lothario? You have a couple of non de plume' in here, which is fooling no one. Try another site buddy - you are ill informed and boring.
    Old Geezer
    8th Nov 2018
    11:56am
    Nope I am OG. What I am after is a super fund that has no fees for my clients with very small balances. Even industry funds are too expensive at $6 a month for people with balances under $500.
    Farside
    8th Nov 2018
    1:36pm
    OG, I have noticed many times you use the word "client" when referring to your advisory services yet I gather you do not have much income and eke out a living from your investments; is this actually an income earning gig with pay for service clients or is it voluntary, which makes the advice worth about as much as is paid for it? Are you doing anyone any favours managing their super balances of $500?
    MICK
    8th Nov 2018
    2:30pm
    OG - why do you always turn a conversation to trivia when you are in a corner? We'll have none of it.
    Old Geezer
    8th Nov 2018
    4:28pm
    I earn enough for my investments not to work so I volunteer my services to help a couple of charities.

    There is an going problem with people having small super balances and losing the lot in fees. We try to monitor them so we can get the money out when they go below $200. It better they get something rather than have mainly industry funds take the lot.
    TREBOR
    8th Nov 2018
    7:42pm
    If it takes money away from the over-priced and under-performing retail schemes, it can only be a good thing.

    Amazing how the same old people show up all the time with the same old line, but using a different name and ID.

    As easy to see through as a pane of glass... why not just give it up?
    MICK
    8th Nov 2018
    7:57pm
    OG - how is it even relevant to harp on fees for a $500 super account to try and drown out the fact that Industry Funds are slaughtering Retail Funds? You are running the Party propaganda!
    For the record I was of the opinion that balances of under $500 attracted zero fees. Can any of the knowledgeable posters verify this or otherwise?
    Old Geezer
    9th Nov 2018
    2:54pm
    Mick your beloved industry funds fleece those with small balances until they are nothing left. If people keep their accounts open they will continue to deduct fees allowing people's super balances to go negative and just wait for more contributions to soak up the negative balance. If you close your account then this does not happen.
    Adrianus
    10th Nov 2018
    11:23am
    Old Geezer, you could direct your clients toward the Banks, most of which have Retirement Savings Accounts (RSA), they've been around since the 1990s. Superannuation without fees. The downside is the low rate of return but that's a small price to pay to hide it from the leaners and gougers.
    Old Geezer
    11th Nov 2018
    12:00pm
    Retirement saving accounts are not super accounts.

    In 2013 the government changed the legislation so that there were no super accounts without fees.

    A retirement savings account (RSA) is an account that you can transfer your super fund into once you've met a condition of release. It is similar to a savings account, but these accounts are in line with superannuation regulations and it's tax advantages.


    As the people I deal with have not met a condition of release they can't transfer their super.
    Adrianus
    11th Nov 2018
    4:35pm
    Oh? OK, I wasn't aware of the change. Perhaps the RSAs were too easily accessed.
    MICK
    8th Nov 2018
    10:27am
    I thought Industry Funds ALREADY had low fees. Perhaps this new innovation will put superannuation money at risk and it would be prudent of the non functioning ACCC to ensure it does not.
    The games people play on those with money.......
    Old Geezer
    8th Nov 2018
    11:57am
    Industry fund fees are still too high for those with super balances under $500.
    MICK
    8th Nov 2018
    12:19pm
    Nice you mention the trivia OG. Now lets discuss the other 99%. I thought so.....
    Farside
    8th Nov 2018
    1:47pm
    Super balance of $500 ... that's just not worth thinking about.
    Old Geezer
    8th Nov 2018
    4:30pm
    Yes it is simply because many people with these sorts of balances have the lot taken up in fees and get no benefit what so ever from super.
    floss
    8th Nov 2018
    10:51am
    At this time I use Australian Super and do not intend to change to a profit at any cost Retail Fund.Yes Mick there is a smell of bullsh*t in the air.
    Jacky
    8th Nov 2018
    2:33pm
    I also use Australian Super and am disappointed. When the stock market has a huge fall the super goes down immediately. I had a pretty big drop, over $50,000. Every day lately the stock market report is going up with my super is going up very very slowly. Maybe I should stop looking at it and let it do what it is supposed to do. I think it will take me about one year to get to where I was before the fall. Very disappointing trying to save enough for when I need to access the money. I am hoping for a few more years before that happens, but you never know.
    tj
    8th Nov 2018
    4:23pm
    Jacky i am the same boat with AUST. SUPER too .i look every 2 or 3 days and gets depressing sometimes .If you have plenty of years up your sleeve not to worry too much ,but if you are like me (been put out to pature ) you tend to get bit concerned ,especially if you are thinking of taking a lump sum to have a fling with .You must be in high risk to lose 50 grand i lost about 7 but have clawed back a couple in last couple of weeks.Don't worry though Trump will keep wall street going.
    Old Geezer
    12th Nov 2018
    2:57pm
    I just checked my SMSF and it is now above the 30/6/2018 balance.
    iday
    8th Nov 2018
    11:37am
    Performance and fees go side by side.
    MICK
    8th Nov 2018
    11:41am
    Totally false!
    You have highly paid managers in Retail Funds who milk the returns. That's why returns to members are so poor.
    Industry Funds have a few well picked professionals but not the big end of town hanger oners who bleed the funds dry. That is the only difference and the figures clearly show this. That's why this government has been shouting down Industry Funds. It wants to let its cronies at the feeding trough. No other reason.
    KSS
    8th Nov 2018
    12:34pm
    I just hope their customer service with the super fund is better than that of their shopping portal!
    MICK
    8th Nov 2018
    2:26pm
    If everything else fails start with the distraction BS. By jingo KSS that sounds so OG to me.
    KSS
    8th Nov 2018
    8:54pm
    You obviously have had no experience with Kogan then Mick.

    !
    Sundays
    8th Nov 2018
    12:42pm
    Low fees are important but equally is security of my money and being able to deal with an Australian based contact centre. Who are these people? Who will keep oversight? Happy where I am with my Industry Fund
    MICK
    8th Nov 2018
    2:28pm
    A good point. Unless directors are made personally liable for calls which are more consistent with fraud and being at the racecourse then clients should hold serious concerns. Not as the the ACCC will care until it hits the media and they have to leave their lunch function early.
    MICK
    8th Nov 2018
    2:31pm
    Very quiet on YLC of late. I feel that something is happening at Party HQ. we'll all see shortly and the government funded trolls will arrive en masse. Bring it on lackies. We need some action.
    Lothario
    8th Nov 2018
    3:17pm
    Hope to see more low cost players like Kogan venture into the superannuation space
    We need to put an end to union control over the industry
    Unions should never have been allowed to participate in a scheme involving employee investments
    Its a HUGE CONFLICT OF INTEREST
    MICK
    8th Nov 2018
    4:28pm
    You ARE OG. Only one persona should be allowed to post on this website, not multiples under different names.
    YLC please fix.
    Old Geezer
    8th Nov 2018
    4:32pm
    Mick I can assure you I am not Lothario. YLC has nothing to fix.
    McGroger
    8th Nov 2018
    4:52pm
    I've been wondering if Lothario took the baton from olbaid.
    Lothario
    8th Nov 2018
    4:53pm
    No idea what you are on about Mick

    Please discuss the issues , otherwise refrain from replying to my posts . I have no desire to converse with crazies
    1984
    8th Nov 2018
    5:24pm
    Ah, comrade Lothario, please explain with fact your belief in a HUGE CONFLICT OF INTEREST or are just another selfish troll for the LNP.
    Retail industry funds are by far the worse performers with the highest fees.
    Bring on competition but my feeling is that Kogan super will be answering to its shareholders & not the policy holders.
    Old Geezer
    8th Nov 2018
    6:16pm
    It is truly mazing as soon as you express a different opinion to others one gets called a troll. I personally love it as it means that I an fight in what I have to say.
    Triss
    8th Nov 2018
    6:43pm
    Actually, McGroger, I thought the same.
    TREBOR
    8th Nov 2018
    7:45pm
    I recommend the Trebor One-Roof Scheme...... fool-proof.. that should stuff a few.....
    TREBOR
    8th Nov 2018
    7:53pm
    Yes - good old diablo... went down in flames and resurrected like a Phoenix... my first thoughts when viewing our current lover toy boy... I even like the way he's taken up the
    Trebor line, much as OG and what was her name did... ummm... Bonny - those rich folk in the village who had top class broadband while the peasants were on phone line, and who suddenly started to offer to he peasants when I said that our excess produce went to deserving people such as the Salvos, who gave out our strawberries to the poor. OG does that now and helps out everywhere while enjoying riches...

    Proves one thing, though - diablo is NOT what he claimed to be... just a troll posing as a rich investor to get a rise out of those dopey old folks online who know nothing......

    Nailed him, McGroger.

    Pity this sort of nonsense take us so much time... and distracts from the real issues.
    floss
    8th Nov 2018
    6:32pm
    Well done McGroger you picked out a perpetual fibber or perhaps a payed bull shitter.
    Lothario
    8th Nov 2018
    6:39pm
    why all the personal attacks.

    I notice anyone who has a right center view is immediately attacked by a mass of labor lemmings

    Please respect opinions that may differ from your one-eyed, welfare mentality
    TREBOR
    8th Nov 2018
    7:45pm
    Tie for tat? I recall chastising you for personal attacks..... now it's whine and dine out on it time?
    TREBOR
    8th Nov 2018
    7:46pm
    Tit for tat...
    MICK
    8th Nov 2018
    7:53pm
    Paid floss.
    Wait until elections come around. The website will again be awash with LNP propaganda.

    The fact that most of the trolls are absent recently is highly likely because they are running the Foley smear at present. How can you always tell an election is near? This low life gutter lot never change. Who'd need them to government the country.
    TREBOR
    8th Nov 2018
    7:55pm
    Nobody mentioned that one big bank was suffering from the cost of paying for its errors and its greed.... in the news this week.... that should have got them going...

    I know - let's mention dividend imputation and women's issues... that's sure to start a fight....
    TREBOR
    8th Nov 2018
    9:17pm
    The fact that any business would launch a super fund, low fee or whatever, which isnot a universal scheme as proposed under The Trebor Scheme - means that it is commercially viable... if it is commercially viable, that means that shareholders etc will benefit, which means there is less to go to the fund members.

    Wouldn't touch it with a barge pole....
    VeryCaringBigBear
    9th Nov 2018
    8:50am
    I am so glad I cashed in my super years ago and invested it in the grandkids house instead.
    Lothario
    9th Nov 2018
    3:06pm
    So what do you live on VCB
    Full OAP ?
    Banjo
    10th Nov 2018
    11:39am
    I can't fathom why people get so hot under the collar regarding Lothario (aka Olbaid, Raphael, Old Geezer). You all know he is a pop up troll who works with no one. He is an obsessional troll and as for saying this Old Geezer "I earn enough for my investments not to work so I volunteer my services to help a couple of charities." Wonder where you find the time to volunteer whilst maintaining so many pseudos??
    I don't comment on these threads because of the split personalities masquerading as different people.
    Old Geezer
    11th Nov 2018
    12:01pm
    Banjo I am not Lothario, Olbaid or Raphael.


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