There’s a myth in Australia that young Millennials are not financially savvy, and that we tend to spend our money foolishly. This even made the global news in May when an Aussie millionaire real estate developer, Tim Gurner, said that Millennials absolutely won’t be able to own their home when “spending $30 a day on smashed avocados and coffees and not working.”
While we could debate this until we’re blue in the face, we look to what else is out there – most notably Acorns, the financial app allowing you to invest the change from your daily purchases to build up an investment portfolio. When this launched in Australia it gained significant traction, with a massive adoption by young people who clearly cared about their finances. It was around this time that we decided to create a super fund that would get everyone – young people included – excited about Superannuation.
Superannuation – for those uninitiated – is the compulsory financial arrangement we have in Australia to enable people to save for retirement. Similar in some ways to the American voluntary 401(k) system, superannuation in Australia is payable to employees by their employer at a rate of 9.5% of their wage.
Recent stats provided by The Association of Superannuation Funds of Australia (ASFA) show that the average Australian will be about $330,000 short of where they need to be for a comfortable retirement. Superannuation will be your salary when you retire, so it’s important to not leave it too late to think about.
While we wanted to create an amazing tech platform, and allow people to have their money managed by award-winning global fund advisors (we chose Dimensional Fund Advisors), we also wanted to give people a tool to help them increase their super savings, so we created Super Spare Change as a feature within GROW Super to provide a savings and growth tool so people could simply grow their super.
The app works in a few different ways. Firstly, the average Australian has between 2-3 super accounts – each charging them fees and likely insurance. There’s a staggering $16 billion in lost superannuation across Australia. With just your tax file number, personal details and a few minutes, GROW Super can help find those accounts and help users consolidate them, which can help their investing power.
We’ve also built in the Super Spare Change feature, investing money you wouldn’t otherwise miss into your superannuation through a round up process. Just link your bank account, and opt to roundup to the nearest $1, $2 or $5, then each time you buy a $16 smashed avocado, $3.50 coffee (or literally anything else) that roundup will go into super. This way of contributing to super is a no brainer, and if it’s part of your standard spending habit, the savings aspect becomes a lot easier.
We also wanted our users to be able to invest in the things that matter to them, so we created the Tactical Tilt. This allows GROW Super users to invest up to 15% of their super balance into things they care about, like startups, sustainability, property and green energy.
As mentioned, we have chosen one of the biggest fund managers, Dimensional Fund Advisors, who manages $650 billion globally, and are backed by Nobel Prize winning ideas.
We’ve also integrated with Envestnet® | Yodlee® Aggregation API to access robust financial data from more than 16,000 global data sources. This is how users can access their bank account data for the Super Spare Change, and pass it through to our admin who runs the debits for investing spare change each month.
The idea for GROW started brewing just over 12 months ago, and we launched in late May 2017. In this short time, we have amassed over 10,000 engaged users looking to break superannuation apathy. For Australians looking to save for their superannuation, please visit GROWSuper.com or download our mobile app.
To learn how to bring your financial apps and services to market faster, implement them at lower cost, and extend their value to consumers, visit: developer.yodlee.com.