Lower fees help remove advice hurdles

07-Jul-2016

By Jerome Doraisamy

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Reducing management and advice fees would not only encourage more Australians to invest, but also help beginner investors grow their money faster, according to a leading robo-advice provider.

Speaking about the fintech’s decision to lower its client fees, Stockspot founder and chief executive Chris Brycki said fairer price structures, whereby clients could share the benefits of the provider’s success, would help attract more investors.

“Stockspot was started to give Australians access to professional investment services and advice without the high costs that exclude too many people,” Brycki said.

“We believe everyone should be able to receive professional and unbiased financial advice and invest without unfair ongoing fees.”

It is this belief that has spurred Stockspot to reduce its fees for portfolios over $10,000 and implement a flat monthly management fee of $6.60 for portfolios under $10,000.

Additionally, the provider will no longer charge an annual advice fee for any portfolios under $50,000 and advice fees will be reduced for portfolios that exceed $50,000.

The changes would be especially helpful to younger investors, Brycki noted, as they looked to enter the property market and set up long-term investment portfolios.

“Three-quarters of our clients are first-time investors, with an average portfolio of under $50,000,” he said.

“They’ve been locked out of the housing market, they’re ignored by the traditional financial advice industry and for many their super funds are underperforming.”

He said the need to lower costs was also about ensuring trust in Stockspot’s services. Speaking to financialobserver, he noted establishing a track record was important.

“You need proof [that] what you’re doing actually works in order to get people to part with their money and invest it,” he said.

He said he was confident in the provider’s ability to garner trust, given that since its launch two years ago, Stockspot’s portfolios had beaten the Australian shares index by 2 per cent after fees, on average, while also exhibiting lower risk.

“Our investment track record continues to outperform the broad share market despite the most turbulent 12 months since the financial crisis,” he said.

He added Stockspot would continue to focus on education in order to further reduce the barriers to consumers seeking financial advice.

“For us, it’s about growing the consumer learning space and helping people understand what the benefits are of different options, and making sure we are someone they can keep in mind when investing their money,” he said.

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