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Raiz sees mixed growth during COVID-19 

Raiz sees mixed growth during COVID-19 

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By Tony Zhang ·
June 03 2020

Raiz sees mixed growth during COVID-19 

Digital micro investing app Raiz has recorded continued growth in active customers during May, however its super product has shown signs of slowing.

Raiz sees mixed growth during COVID-19 
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In an update on active paying customers and total funds undermanagement (FUM), the group revealed it had seen continued growth during May, with a 1.2 per cent increase in active customers to 220,955 and a 6.9 per cent increase in total funds under management to $433 million. 

“This resumption of growth, in the past 2 months, is particularly pleasing as it follows dramatic market falls and significant volatility and economic uncertainty associated with COVID-19. There are now more active customers than at 29 February 2020,” Raiz chief executive George Lucas said.

However, over the last three months, funds under management have fallen nearly 4 per cent on the app, with total FUM now sitting at $66.43 million.

Raiz Invest's super offering also lost a further $2 million during the month of May. 

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“Net inflows into the Raiz Invest Super product have slowed as withdrawals continued due to the COVID-19 early release of superannuation,” Mr Lucas confirmed with Adviser Innovation.

The report showed that $2 million in superannuation was withdrawn from the Raiz super fund, following the $4 million that was withdrawn in April 2020.

On total, $6 million has been withdrawn from Raiz's super offering since the ERS kicked off, with the platform expecting further withdrawals in July.

However, Mr Lucas maintains the investment platform is liquid and ready to weather further withdrawals thanks to its investments in ETFs.

The announced suspension of SuperMatch on 19 May 2020, by APRA and the ATO to address fraud, may also impact the growth of Raiz Invest Super going forward. 

In a Senate hearing last week on COVID-19, APRA deputy chair Helen Rowell confirmed that the regulator had identified scammers trying to use the SuperMatch tool to steal from members.

Mr Lucas confirmed with Adviser Innovation the suspension of the tool could impact the growth of the company's super offering but this was still uncertain.

"The suspension of SuperMatch that was announced on May 19 2020 by APRA and the ATO to address fraud may impact the growth of Raiz Invest Super going forward," he said.

"SuperMatch is part of the company's infrastructure, enabling members to easily consolidate their superannuation online."

 

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