Kogan.com, the pure-play online retailer with a portfolio of goods and services, is taking on the superannuation industry with what it calls a no-frills fund.

The company announced a deal with Mercer to launch an “ultra-low” fee Australian superannuation fund, leveraging Kogan.com’s digital efficiency and customer base.

Investors weren’t particularly impressed, however. The stock was down 3.5 per cent to $2.74 at 3pm AEST — a 16-month low and down from a record high of $10 earlier this year.

The stock has taken a few hits this year as its founders sold down their stakes and margins got squeezed.

Kogan listed in mid-2016 after raising $50 million selling shares at $1.80 each.

The Super deal follows closely on Kogan.com adding home loans to its portfolio which includes Kogan Retail, Kogan Marketplace, Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Health and Kogan Travel.

Kogan.com did not announce how much its super fund would charge in fees, a key issue affecting the growth of assets and the eventual lump sum in retirement.

The company says further details will be released closer to the launch date, expected in early 2019.

Kogan's share price journey since listing in July 2016
Kogan’s share price journey since listing in July 2016

The latest annual Fat Cat Funds Report by Stockpot found the best performing fund, with low fees, can return more than twice as much to its members as the worst fund.

The average fund in the Fat Cat list charges more than 2% in fees every year, meaning someone in their 20s or 30s could lose $250,000 in fees by the time they retire.

“This partnership will deliver a no frills superannuation offering with ultra-low fees that will enable Aussies to retain and preserve more of their personal wealth,” says David Shafer, Executive Director of Kogan.com.

“Every Australian should consider whether the power of compounding is working for them through low fees, or against them through the ongoing erosion of their wealth by high fees.

“Kogan.com’s mission is to deliver price leadership through digital efficiency, and we are proud to be able to help Australians preserve more of their hard-earned money by delivering an ultra-low fee superannuation solution.”

Mercer has more than $US11 trillion under investment and more than $US240 billion in assets under delegated management globally.

“We are able to use our global scale and expertise to drive competition and get better results for clients and members,” says Ben Walsh, CEO and managing director of Mercer.

“In an industry where scale and cost efficiencies count, this new alliance will enable Kogan to create value at scale through their trusted online brand and huge customer base.”

Under the agreement, Kogan.com will provide branding and marketing services, and Mercer investment management, administration and customer service.

Last month announced revenue from Global Brands had fallen by 27%. The company said foreign competitors had been avoiding GST since the introduction of new GST laws in July.

In August, the company posted a full year after tax profit of $3.74 million, a 362.3% rise on last year, outperforming its prospectus forecast.

The company listed on the ASX in 2016 at $1.80 a share. Today they are trading at $2.78, down 2.11% on yesterday and a long way from the 12 month high of about $9.

Founder Ruslan Kogan owns about half of the company.


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