No. We don’t charge entry or exit fees or brokerage. We believe brokerage should be included in the advertised cost, not hidden in the small print.
Platforms that charge extra for brokerage are incentivised to 'over-trade' which is not in the clients' best interest. It can result in a higher total cost and eat into your returns.
The Exchange Traded Funds (ETFs) we invest in charge a management fee. The average amount you pay depends on which investment strategy you invest in and ranges between 0.26% to 0.28% per annum for the Stockspot Model Portfolios. ETF management fees are an indirect cost which come out of the ETF unit price and not charged by Stockspot. For more information see our chosen ETFs.
Some investment apps and robo-advisers lure you in with a low headline fee, but sting you with brokerage, set-up fees, maintenance fees, netting spreads and transaction costs that can eat into returns. It’s important to always check the small print!
Stockspot’s low fees are all inclusive.
We don’t charge a setup cost to invest and you can top-up regularly without being charged brokerage or transaction costs. If you leave us we won’t charge an exit fee.
Our fees are fair and transparent, you always know what you’re paying for and why.
The way traditional wealth management works can be rotten and full of conflicts of interests. Many WRAP and SMA platform providers don’t deal with you directly but only through a financial adviser.
The financial adviser can often only recommend products available on their own platform - even where equivalent products are available elsewhere at a much lower cost.
It causes conflicts of interest and in some cases risky investments have been recommended by advisers to boost their fee income. Some WRAP providers also charge an exit fee if you leave before a contracted period which can be up to 5 years. Stockspot does not charge any entry or exit fees.
Most WRAP providers charge an admin fee between 0.25% and 0.75% but only accept amounts of at least $50,000. In addition the financial adviser will charge an annual fee of 0.5%-2.0%.
We strongly believe these fees are unnecessary when a client’s risk profile changes very slowly over time and the funds are invested in a broad spread of assets.
Investment management fees
The funds in which the WRAP provider invests also charge their own fee on top of the Platform provider’s fee. For a normal equities or property fund this fee is typically 1.0%-2.0% but can be up to 4%. WRAP providers claim they can get up to 40% discount on these fees but the way it is passed through to the WRAP investor is not transparent.
Other transaction fees
There can be many other fees depending on the complexity and flexibility of your investment portfolio. These fees include but are not limited to custodial, portfolio, transaction, brokerage, issuer and platform service fees as well as expense recovery. The more complicated and flexible the offering the more you will pay.
What is the all-up cost of a WRAP investment?
For every $100 you invest up to $5 is lost upfront to commissions and between $1-$2 is lost each year for admin and advice and another $1-$2 goes to the fund manager. Stockspot asks for less than $1 each year to provide the necessary asset allocation, portfolio selection, execution, rebalancing, administration, reporting and portfolio audit services.
The advantages of using Stockspot versus doing it yourself include:
- Transaction and brokerage costs – we don’t charge brokerage so are often a more cost effective solution particularly if you plan to make regular contributions.
- Re-balancing – we don’t charge brokerage to rebalance your portfolio. We constantly monitor your portfolio and rebalance it to reduce risk when asset weights drift away from target allocations. Most people don’t pay attention to the impact that 'asset drift' can cause to portfolio risk over time - but Stockspot does this for you.
- Personal advice – we continually monitor your financial goals, cash flow needs and risk profile to ensure your investment strategy is appropriate for you. When your situation changes we recommend suitable adjustments to your investment strategy.
- Portfolio construction and asset allocation – our chosen asset classes and ETFs are not static. You get access to our expertise on investment selection which can make a big difference to your long-term portfolio performance. We use mainly Vanguard and BlackRock ETFs but if another fund manager has a better lower cost fund, we'll use that one.
- Reporting and administration – we provide tax reporting on your investment portfolio so you don’t need to calculate tax on each of your investments and our investment service is audited every year.
- Tax – we help ensure that you are set-up to access the tax benefits of the Double Tax Agreement between Australia and the United States for your overseas investments.