Kogan retreats from superannuation sector
Just four years on from its much-hyped launch, Kogan Super has closed its doors to new members.
Kogan initially flagged its intention to enter the superannuation sector in late 2018, saying it had partnered with Mercer to develop a new "no frills, ultra-low fee" superannuation fund.
The product launched just shy of a year later in August 2019, drawing interest as an index-only superannuation offering.
At the time, it said the fund would leverage Kogan's digital efficiency, blending its expertise as an e-commerce leader with Mercer's global scale and investment capabilities. Mercer is also trustee and administrator.
"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," then-Mercer chief executive and managing director Ben Walsh says.
But it didn't happen, with the product never gaining scale.
Since inception, Kogan Super has only amassed $4.59 million across its five investment options, according to the 2022 annual report. This is spread across about 435 members, indicating an average balance of just $10,300.
A spokesperson for Mercer confirmed the decision to close to new members.
"We continue to consider the options for current Kogan Super members with their best interests in mind."
In the fund's short time, its performance has been mixed. Its first full-year returns in FY21 show the Enhanced Indexed Growth option achieved 17.90% when the median MySuper option returned 18.8%.
However, it didn't fare quite as well in FY22 - where median MySuper returns came in around -3%, Kogan's Enhanced Indexed Growth option returned -6.16%.
Kogan's primary aim with the super product launch was to offer one of Australia's cheapest solutions.
While the product has ultimately failed, it did achieve this goal; if Kogan Super had been a MySuper product, its fees of just 0.67% would have made it the third cheapest in market, just behind Vanguard and ANZ Staff Super.
This article first appeared on Financial Standard
Get stories like this in our newsletters.
