GROW Super closes its doors

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Almost five years to the day that it first launched, GROW Super will close its doors.

Diversa Trustees, the trustee for GROW Super, has informed members it is closing the product.

Since its launch in 2017, GROW Super has been touted as a serious competitor to the incumbents, appealing to a younger membership base and employing an active strategy where other disruptors based their offering on low-cost, passive solutions.

Closing sign in front of cafe, symbolising GROW Super closing its product.

As other 'millennial' funds failed to gain ground and ultimately closed, like Zuper and GigSuper, GROW Super appeared to be withstanding the test of time. In 2021, GROW Super rebranded to GROW Inc. and began winning mandates for its growing administration business, with Mercy Super and Vanguard among its clients. In the last 12 months, GROW Inc. has been trying to divest the superannuation business.

However, Diversa has confirmed the increased regulatory pressure of late has proved too much for the super offering; it is no longer accepting new members and will shutter on May 11.

"The changes have increased the complexity and cost of administering superannuation funds resulting in potentially poor outcomes for members where there is insufficient scale," members were told.

"Considering these changes and the ever-evolving regulatory landscape, Diversa Trustees Limited has made the decision that it would be in the best financial interests of members to close the GROW Super product within OneSuper."

At the end of 2021, GROW Super had $47.18 million in funds under management, according to APRA data. In a 2018 interview with FS Super, the fund said it had close to $50 million.

GROW Super was transferred to OneSuper in 2020 when it merged with industry fund LESF Super; GROW Super is a white label of the LESF MySuper option. At the outset, the investment function was outsourced to Dimensional Fund Advisors.

Members may now have their account transferred to Smartsave, another sub-plan within OneSuper, or move to another super fund entirely. If they make no choice, their savings will be transferred to the ATO around May 27, Diversa said.

In its short five years, GROW Super saw backing from Citigroup and IOOF, hired high profile executives from the likes of KPMG and Qantas Super, and pivoted into administration and blockchain technology. Around the time of its launch, it was even endorsed by popular satirical newspaper The Betoota Advocate. The rebrand to GROW Inc. in March 2021 signalled the fund's intention to diversify away from its super offering.

It's the latest in a long line of Diversa products to close. Just last month the trustee confirmed three of its other sub-plans would close due to lack of scale. These were Brightday, MYONESUPER and Super Prophets; collectively they held less than $30 million in funds.

This article refers to the closure of the GROW Super product administered by Diversa Trustees, not the GROW Inc. business, which continues to provide administration services to superannuation funds.

This article first appeared on Financial Standard.

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Jamie Williamson is editor of Financial Standard. Prior to this she was a senior journalist, covering wealth management including financial advice, superannuation and life insurance. Before turning to journalism, she worked in public relations, specialising in financial services. She has a Bachelor's degree in communications from the University of Newcastle.

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