Millennials control $130 billion of superannuation money but most products pitched specifically at them have been slow to take off, new Rainmaker research shows.
Australia had 19 superannuation products designed for millennials and marketed as app-based disruptors, as at April 2019.
In reality, a third of these are still just websites with no investable products available while the rest have attracted less than $1.6 billion from about 71,000 members.
"Despite the fanfare millennial disruptor superannuation receive they nevertheless make up a very small portion of the superannuation market," Rainmaker research associate Ben Russell wrote in the note.
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"The segment however remains more known for its intentions than actual market footprint... As a result this entire segment controls at best less than 1% of the $130 billion millennial superannuation market."
The biggest players are Virgin Money ($520 million in assets under management), Future Super ($350 million), Mobi Super ($220 million) and Spaceship ($215 million). The remaining 13 millennial products have $60 million or less in assets.
GigSuper, Tomorrow Super, Sprout Super and Kogan Super have made announcements but are yet to launch a product.
Majority of millennial products use APRA-regulated DIY Master Plans. Sargon Capital has the biggest slice of the business with its Diversa Trustees and Tidswell acting as the responsible service entity for 66% of the products.
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The research also noted millennial super products could improve in declaring investment returns and publishing their annual reports.
"The affinity disruptor segment is still immature. Very few of them declare their investment returns in any structured easy-to-access manner although this is slowly improving," Russell writes.
"On top of this, while all active open products disclose their PDS very few publish their own annual reports."
"This ill-defined governance structure is despite the relatively high fees charged by these products, suggesting that the small size of many of these products have generated insufficient cash flow for these businesses to enable them to establish transparency and disclosure activities considered routine by regular superannuation products."