OpenInvest review: Professional portfolio management

Invest in a diversified portfolio of Australian and global stocks designed by leading fund managers.

Good for

  • 16 investment portfolios to choose from 4 leading fund managers
  • Portfolios categorised by risk profile and investor type
  • Invest in Australian + global shares, bonds, cash + ETFs

Not so good for

  • Monthly portfolio fee
  • Minimum initial investment of $20,000

OpenInvest offers investment portfolios from top investment managers including BlackRock and Schroders. It helps investors choose a portfolio by categorising them by risk profile and offering information about the kind of investor each would be best suited to. 

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Stocks, bonds, cash, ETFs

Investment product

$20,000

Minimum Investment

16

Number of Portfolios

From $7 per month

Fees

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How does OpenInvest work?

While there are plenty of "robo-advice" type platforms around these days, OpenInvest sets itself apart with its impressive selection of fund managers and investment portfolios. Between its range of managers, there are 16 portfolios to choose from, each broken down by investment risks, holdings and costs.

Investors that sign up to OpenInvest currently have the option of choosing from four investment managers – BlackRock, InvestSense, SG Hiscock & Company and Schroders (more expected to be added in 2021). Each investment manager offers the same set of portfolio options from "defensive" to "growth" and each have a recommended minimum $20,000 investment, although the fees do vary. After your initial investment, you can top up your portfolio in increments of $1000 or more.

Why pick OpenInvest?

Managing your own portfolio of stocks can be challenging and even risky if you don't know what you're doing. OpenInvest allows you to invest your money into a portfolio of assets managed by experienced fund managers who make all the decisions for you.
The investment manager you choose manages your portfolio on an ongoing basis and sends regular updates about your portfolio, with OpenInvest doing all the trading. This can take the stress out of investing, especially during periods of heightened volatility.

What are the portfolios?

Investors have four portfolio types to choose by each of the four investment managers. While these portfolios vary depending on the investment manager you choose, they all follow the same basic risk profiles:

  • Defensive income
  • Sustainable income
  • Robust Growth
  • Maximum Growth

The Defensive Income portfolios are targeted towards people that have a low risk tolerance, such as retirees or those nearing retirement. Because of this, the assets invested are typically heavy on row-risk fixed income investments such as bonds or cash, and hold less growth assets like stocks.

The Maximum Growth portfolios sit at the other end of the scale and are better suited to people with a high risk tolerance who are happy to take on the risks of short-medium term market volatility in exchange for greater growth potential. These portfolios tend to be overweight global or Australian stocks and ETFs.

Which assets you'll be invested in will depend on which investment manager you choose and what their strategy is. For example, BlackRock invests funds into a combination of its iShares index fund ETFs that range from fixed income to global shares. Meanwhile, InvestSense offers portfolios that combine stocks, managed funds, bonds and cash.

What are the costs?

You’re charged a monthly Model Portfolio fee which is made up of the investment manager’s fee and the OpenInvest fee. There may also be a transaction cost. The combined fee depends on how much you're investing and which portfolio you choose from which investment manager. This sounds complicated, but it's displayed very prominently on the platform via a fee calculator, and it's easy to switch between options to see the difference in fees.

Investment manager fee: The investment manager fee typically ranges from 0.20%pa to 0.75%pa of your invested funds.

Transaction costs: There may also be a transaction cost when you add or remove funds from your portfolio, which also depends on your investment manager. The transaction fee ranges from around 0.01% to 0.2%, depending on how much you invest. They are levied from within the ETF or managed fund in the portfolio, rather than charged to your investment account (as the fee is). If a fund is made up of shares only, there will be no transaction costs.

OpenInvest fee: The OpenInvest fee is 0.35% of your invested funds per year.

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How to open an OpenInvest account

To join OpenInvest, you need to be at least 18-years-old and an Australian resident. There's also a recommended minimum $20,000 initial investment, although subsequent transactions only need to be $1000 or more.

You'll need to sign up from the website, after that you can download the mobile app from Apple or Android stores or access the platform via desktop.

You'll need to provide:

  • Personal details
  • Company or Trust Details (if applicable)
  • Tax file number
  • Bank details

Verdict

OpenInvest offers a unique product in a market that is often confusing for new or casual investors to get started. Although you can invest in a portfolio of stocks through exchange traded funds or managed funds, it's not always clear whether it's high-risk, low-risk or suitable for you. OpenInvest goes a long way toward making this a lot clearer by displaying each portfolio's risk profile, asset allocation and fee structure.

In many ways it mirrors what other other robo-advisers are doing with a few key differences. Most robo-advisers offer a handful of ETF portfolios curated by the robo-adviser's own investment managers. OpenInvest doesn't curate any of the portfolios itself, instead it features 16 portfolios designed by external leading investment managers, including from the world's largest asset manager, BlackRock

These portfolios are specifically designed to match the risk-profiles featured by OpenInvest to make it easier for everyday investors to understand.

This makes it an especially interesting entrant to the market and certainly worth checking out if you're looking for a good place to invest your savings.

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