Superannuation shakeup: Low-fee trading platform Superhero to launch super product
Superhero's new superannuation product will have similarly low fees to its trading platform and will offer two different ways to invest your super.
Superhero offers a flat $5 brokerage fee for ASX stocks and no brokerage on ASX-listed exchange traded funds (ETFs), and it promises similarly low fees on its new super product.
What will the new Superhero super product look like?
The new product is an APRA-regulated super fund that will allow members to invest in ASX stocks and ETFs with a lot more control than they would have with a regular retail or industry fund. CEO of Superhero John Winters told Finder there will be two different ways to invest your super using the platform: Autopilot and Control.
"Autopilot allows you to choose from a pre-determined list of investments and build your own portfolio. It's a list of ETFs that you can choose from. This can scale you up and down from a risk point of view. A set percentage of your balance will go into an Index ETF, then depending on your preferences you can get exposure to US tech, Asia tech, global healthcare, sustainability and ethical investing, gold and cash," said Winters.
Winters explained with the Autopilot option, there will be limits on how much of your super balance you can invest in the one ETF as a way of forced diversification.
"So for Autopilot, you need to put at least 70% into an Index ETF, and then you can split the rest up with the other 30%. Or you can go for 95% in the Index ETF and 5% elsewhere, but the maximum that you can put into the other ETFs would be 30%. You couldn't go 100% into Asia tech, for example."
The second investment option is called Control, and as the name suggests, members can be a lot more hands-on with this option.
"The Control account allows you to build your own portfolio from scratch using ASX listed shares and ETFs. So it's basically superhero your super. With the control account, you can invest up to 75% yourself. So you'll have a balanced weighting on 25% and then 75% you can invest yourself," he said.
How will Superhero super compare?
There are a few super products like this already in the market, the most similar being Spaceship super. Spaceship also offers two different investment options; however, Spaceship has a bigger focus on US stocks and ETFs and in particular technology stocks. Winters told Finder the main difference between Spaceship's two investment options and Superhero's new product is the ownership of the investments.
"Those are pre-determined managed funds. They're managed investment schemes that invest in the underlying ETFs. We offer direct ownership. So you'll invest it yourself how you want it, and you own the underlying ETF," he said.
"There's been a couple of products that have gone out with a promise that you can invest in US tech or stocks like Apple and Tesla, but with us, you actually can invest in individual companies. At the moment it is only ASX, but we will look to expand this as we grow."
Spaceship currently charges total investment fees of 0.99% p.a. plus an annual admin fee of $78 per year on its Growth X investment option. Winters didn't reveal exactly what the fees would be with the new super product but did say they'd be low compared to other super products in the market.
"Because we've already got scale in the market, we've been able to negotiate down the costs. As we've already done with the trading platform where we've gone in with a price that undercuts everyone else, we're looking to do the same thing with super," he said.
The new Superhero super product will launch to Superhero account holders early 2021 and will be available to new clients shortly after this
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