Many of the smaller, funky funds do not have track records that are long enough to be considered for any of the major awards handed out each year by super fund researchers.
That may change and one, two or more of these newer entrants may turn out to be terrific performers.
However, signing up with one of the start-ups at this stage seems like a bit of a punt when there are plenty of large super funds available with good track records that stretch back for decades.
Still, there can be no denying the new upstarts appeal to millennials in a way that most mainstream super funds would do well to emulate.
For example, members of one of the newer entrants, Raiz Super, can have their “Raiz Rewards” [cash back] money from retail purchases directed into their super account. It is a feature that a few of the larger funds also offer.
Another idea already rolled out by the fintechs that could be adopted by bigger funds is “rounding up” on spending, where, say, you make a purchase of $9.50 on your credit card and the amount charged to it is rounded up to $10, with the extra 50 cents being deposited into your super account.
Over time, the amount of these voluntary contributions to retirement savings would be substantial. And they are painless to fund members, with the round-up amount so small they are rarely missed.
Some large funds are using the principles of behavioural finance and “gamification” to encourage members to take an interest in their super.
Sunsuper, recently named “fund of the year” by market researcher SuperRatings, has a retirement forecaster which looks like a game using a weather analogy, where the aim of the member is to take actions to prevent stormy weather in retirement.
Most people, if they think about super at all, probably don’t do so until they are in they hit their early 50s, by which time it may be too late to make much of a difference to their standard of living in retirement.
Mainstream funds should follow the lead of some of the super upstarts and do more to get their members to take an interest in their super from an early age.