Young superannuants’ use of mobile apps offered by Australian Prudential Regulation Authority (APRA) funds and emerging fintech start-ups will create an environment where future SMSF trustees will have had their expectations set from those experiences.
This was a key reason for the SMSF sector to keep an eye on such developments, according to Class chief executive Kevin Bungard.
“You all know we’re in the middle of a fintech boom and there’s a whole new wave of APRA fund offerings, and it’s an area that maybe you haven’t been paying attention to,” Bungard told the Class Connect 2017 conference in Sydney last week.
“What we’re seeing in the fintech space is really this explosion of providers because the barrier to entry is low, so don’t be surprised that there are a whole host of other providers.
“These guys are all competing for the same clients so you may have a situation where people will leave an industry fund and go to one of these new start-ups rather than start up an SMSF.
“And even if they do go to one of these guys and start using the apps because they’re young and are used to doing everything on their mobile phone, because it’s the only way they expect to receive anything, keep in mind these apps are going to be training all your future SMSF trustees.”
He said he believed once those superannuants moved to setting up an SMSF, the apps had already set certain expectations.
“I know a lot of the time in the SMSF space we don’t really pay attention to what the APRA funds are doing, but I encourage you to look at these apps and pay attention to what these guys are doing,” he said.
“They’re interesting apps, they’re interesting approaches, they’re interesting ways to drive engagement with trustees.”
He mentioned Kinetic Super, tech-centric super fund Spaceship, Grow Super and digital financial assistant zuper as examples.
“On the Spaceship website, it mentions that [their users] go home and watch Netflix, they use Uber and when they go on holiday they use Airbnb – these guys are playing to that market of having everything on your phone and being driven by technology at your fingertips really well,” he noted.
“It will be really interesting to see how these products compete, but again I encourage you to keep an eye on some of these things that maybe wouldn’t necessarily be on your radar.”