InvestSMART robo advisor review
- Investment product
- ETFs
- Minimum investment
- $5,000
- Number of portfolios
- 8
- Fees
- From $55 /year
Our verdict
Choose from 10 diversified ETF portfolios and take advantage of competitive fees.
InvestSMART's Professionally Managed Accounts service is a solid option for Australian investors with at least $10,000 who want a hands-off, diversified portfolio with refreshingly low, capped management fees. Its fee structure gets particularly competitive above $200,000, where the management fee caps out at a flat $880 a year. However, the relatively high entry point makes it unsuitable for beginners or those looking to start with a smaller amount. Micro-investing platforms like Raiz may be a better fit for those just starting their investment journey.
InvestSMART has been helping Australians invest since 1999, launching its automated investment service back in July 2015. It's one of the more established players in the local robo advice space.
Pros
- Management fees cap out at $880 a year for balances over $200,000
- Offers a wide range of 13 portfolios
- Well-established Australian company founded in 1999
- You have beneficial ownership of the underlying shares
Cons
- High minimum investment of $10,000
- No option for micro-investing or round-ups
- Brokerage fees apply for trades within the portfolio
What is InvestSMART Professionally Managed Accounts?
InvestSMART's Professionally Managed Accounts is an automated investment service, often called a robo advisor. Instead of you picking individual stocks or ETFs, InvestSMART's experts build and manage a portfolio on your behalf based on your financial goals and appetite for risk.
You maintain beneficial ownership of all the investments in your portfolio, which means they are held in your name. The service simply automates the investment, rebalancing and administration for you.
How much does InvestSMART cost?
InvestSMART uses a tiered and capped fee structure, which can be very cost-effective for larger balances. There are three main costs to be aware of:
- Management fee. This is the main fee for managing your portfolio.
- For balances between $10,000 and $200,000: A fee of 0.44% per annum.
- Fee cap: The management fee is capped at a maximum of $880 per year. This cap kicks in once your portfolio balance reaches $200,000.
- Administration fee. A separate fee of 0.11% per annum, which covers all buy-side brokerage — so there's no extra transaction cost when new funds are invested or your portfolio is rebalanced with purchases.
- Brokerage fee. When assets in your portfolio are sold (for example, during a rebalance or withdrawal), a brokerage fee of $4.40 or 0.044% of the trade value (whichever is greater) applies.
- Indirect ETF fees. The ETFs held within your portfolio have their own management fees. These are charged by the ETF providers (like Vanguard or iShares, not InvestSMART) and range from 0.09% p.a. to 0.30% p.a.
There are no withdrawal fees, though switching between portfolios may still incur brokerage costs on any assets sold.
What are the InvestSMART portfolios?
InvestSMART offers 13 different Professionally Managed Accounts, giving you a broad choice of investment strategies. After you complete a questionnaire about your goals and risk tolerance, the platform recommends a suitable portfolio for you.
The portfolios are built using a mix of asset classes, primarily through ETFs and cater to different objectives. Examples of the portfolio types include:
- Income focused. Designed for investors seeking regular income and capital protection (e.g. Interest Income, Hybrid Income).
- Growth focused. Aimed at investors seeking moderate to high capital growth over the medium to long term (e.g. Growth, High Growth).
- Specific exposures. Portfolios that concentrate on certain markets or asset classes (e.g. International Equities, Property and Infrastructure).
Who is InvestSMART for (and who should look elsewhere)?
InvestSMART is best suited to a few specific types of investors:
- Investors with $10,000 or more. The minimum investment makes it inaccessible for those with less to start.
- Set-and-forget investors. If you want a professionally managed, diversified portfolio without having to make the day-to-day decisions, this service is designed for you.
- Cost-conscious investors with larger balances. The $880 annual fee cap makes it one of the cheaper options in Australia for portfolios over $200,000.
- SMSF trustees. The platform can be a straightforward way to manage the investment strategy for a Self-Managed Super Fund.
However, you should probably look elsewhere if you are:
- A beginner with a small amount to invest. The $10,000 minimum is a high barrier. Platforms like Raiz Invest let you start with as little as $5, and Spaceship Voyager has no minimum at all for one-off investments.
- A hands-on investor. If you want to pick your own stocks and ETFs, you'd be better off with one of the best online share trading platforms.
- Looking for financial advice. While it's an advice-driven service, it's automated. It doesn't replace comprehensive personal advice from a human financial advisor.
How does InvestSMART compare to other robo advisors?
While InvestSMART is a strong contender, it's not the only option. Here’s how it stacks up against other popular Australian automated investment platforms.
- InvestSMART vs Raiz. Raiz is designed for micro-investing, allowing you to invest spare change from purchases. Its minimum investment is just $5, making it far more accessible for beginners. InvestSMART requires a $10,000 minimum and is geared towards those investing a lump sum.
- InvestSMART vs Spaceship. Spaceship offers three managed portfolios with different themes, including a strong focus on technology and growth stocks, and has no minimum investment at all. InvestSMART offers a much wider range of 13 portfolios in total, spanning diversified, single-asset-class and actively managed options, giving more traditional asset allocation strategies to choose from.
Ultimately, the best way to invest money depends on your starting capital and investment style. InvestSMART is built for lump-sum, long-term investing, while others are better for getting started with small, regular contributions.
How to open an InvestSMART account
Getting started with InvestSMART is a straightforward online process.
- Visit the InvestSMART website. Click the "Go to site" button to be taken there securely.
- Complete the questionnaire. You'll need to answer questions about your investment timeframe, financial situation and tolerance for risk.
- Receive your recommendation. Based on your answers, InvestSMART's algorithm will recommend one of its 13 portfolios.
- Verify your identity. You'll need to provide details from two forms of ID, such as a driver's licence and passport, for electronic verification.
- Fund your account. You must make an initial deposit of at least $10,000 to activate your portfolio. You can set up a one-off transfer or a plan for regular contributions, which is a form of dollar cost averaging.
Frequently asked questions
Sources
Your reviews
Alison Finder
Editorial Manager, Money
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