Robo Advice

Robo advisors you can compare today

Updated September 21st, 2018

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Name	Product	Annual fee on balances less than $5000	Annual fee on $5001 - $9999 balances	Annual fee on $50,001 - $99,999 balances	Annual fee on $100,001 - $199,999 balances	Minimum Deposit	Investments Used	Number of Portfolios
Clover		$60	$60	0.60%	0.55%	$2,500	ETFs	5	Invest in Australian and global shares, cash, fixed income/bonds, property and emerging markets.	Go to site More Info	Compare	loading Fetching your data...
Six Park		N/A	N/A	0.50%	0.50%	$10,000	ETFs	5	Invest in Australian and global shares, property, infrastructure, emerging markets, bonds and cash.	Go to site More Info	Compare	loading Fetching your data...

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What is a robo advisor?

A robo adviser performs many of the same services as a traditional financial adviser. Using complex algorithms and technology, these digital advisers provide financial plans to consumers and automatically manage their investments. The basic operation of these automated financial advice services is quite simple.

Once you provide details of your investment goals, investment timeframe and appetite for risk, the robo advice service generates a recommended investment portfolio, which is usually based on exchange traded funds (ETFs). Once you’ve invested your money, the robo adviser manages your portfolio and re-balances it whenever necessary to ensure it remains in line with your risk tolerance levels.

Proponents of robo advisers say that instead of being influenced by emotion when making trades, digital advisers use algorithms and mathematical models to determine the right asset allocations for investors. They’re also much cheaper than having a traditional financial adviser actively manage your investments, with robo advice available for as little as one-tenth of the cost of receiving advice the old-fashioned way.

Digital advice services are based more on building and maintaining a portfolio than providing strategic advice, so most analysts predict that there will still be a place for traditional financial advisers in the future – in fact, the advantages the technology presents could be very useful tools for financial advisers. However, for the 80% of the population who either cannot afford or are unwilling to pay the fees to receive traditional financial advice, robo advisers offer a convenient and affordable alternative.

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The rise of robo advice

The robo advice revolution started in the US a few years ago, and since then companies such as Betterment, FutureAdvisor and Wealthfront have enjoyed enormous success. Both Betterment and Wealthfront each manage more than $2.6 billion of customer assets, with the market expected to continue to rapidly expand in coming years.

In fact, research by KPMG has predicted that by the year 2020, robo advisers will manage around USD$2.2 trillion worth of assets. In Australia, the robo advice sector is still in its infancy. We’ve profiled and compared the established players below, with several more providers expected to launch their own robo advice services in the next 12 months.

• Stockspot

  Stockspot was launched in 2013 and was the first provider of robo investment services in Australia. It gives you the opportunity to choose one of five investment strategies suited to your level of risk tolerance, with funds invested in low-fee exchange traded funds (ETFs) across five asset classes: Australian Shares, Global Shares, Emerging Markets, Bonds and Gold.

  Stockspot charges $0 for the first six months then $6.60 a month for balances under $10,000. Balances over $10,000 fees range from 0.792% per year - 0.528% per year inc GST. You will also need to set up a Macquarie Cash Management Account when you open a Stockspot account.

• InvestSMART

  Although its robo advice service was launched in July 2015, InvestSMART has been offering investment advice to Australians since 1999. Once you’ve entered your investment timeframe, appetite for risk and your current assets, the robo advice service provides a financial health check and recommended investment strategy.

  There are 10 investment strategies available and InvestSMART’s fees range from 0.67% to 0.97% a year, depending on the amount you invest.

• Ignition Direct

  Launched in late 2015, Ignition Direct’s robo advice service offers automated online financial advice, investments and education. Available to people with a minimum of $5,000, Ignition Direct requires you to open a Macquarie Bank Cash Management Account to fund your trades and an OpenMarkets online broking account (from which your trades are placed).

  Your risk profile is matched with one of Ignition Direct’s 11 model portfolios. There is a monthly subscription fee and a brokerage fee attached to the service, with prices starting from $198 per month.

• Quiet Growth

  Launched in August 2015, Quiet Growth is an automated online investment management provider. With a minimum account balance if $2,000, Quiet Growth can manage investments in individual, joint, SMSF and trust accounts.

  Fees start from 0.4% p.a. of the balance you invest, while the first $10,000 you spend is free from this service fee. You can choose from five investment portfolios based on your appetite for risk.

• Raiz Invest

  Launched in January 2016 under the name Acorns Australia before rebranding to Raiz Invest, Raiz is the local arm of a US parent company that has offered robo advice to more than one million US investors. It offers something a little different to most other robo advisers by allowing you to link your bank accounts and credit cards to your Raiz account, and then investing the spare change from your daily purchases.

  You can set aside a recurring investment amount daily, monthly or weekly, or even invest a lump sum amount with the help of the Raiz app. Your money can be invested in a choice of six diversified portfolios based on your risk tolerance, with fees from $1.25 per month (for accounts under $5,000) or 0.275% p.a. (for accounts over $5,000).

• OwnersAdvisory by Macquarie

  Macquarie Group’s OwnersAdvisory platform lets you access more than 30,000 investment choices in Australia and around the world. Customers can use the online platform to buy tailored investment advice that covers local and international shares, ETFs and managed funds. A $55 fee applies per Statement of Advice, while there’s also a $45 monthly subscription fee.

  However, OwnersAdvisory merely offers financial advice and does not execute any investments. You can then take the advice you receive and invest your money through your choice of online trading platform.

• Clover

  Clover aims to make it as simple as possible to build wealth and save money in the process. Founded in 2015, it can help you invest in a diversified portfolio of ETFs based on your personalised risk assessment.

  Your portfolio can also be regularly re-balanced to ensure that you are on track to reach your financial goals. Clover had not fully launched at the time of writing, so limited information is available concerning the provider’s investment strategies and fees.

• Plenty (formerly CapitalU)

  Another online robo advice platform still to launch at the time of writing, CapitalU is an online financial planner and advice service.

  By connecting all of your accounts and outlining your financial goals, you can receive a comprehensive financial plan and help to manage your investments. Pricing starts from the free Ulite plan through to the $37 per month + 0.3% charge attached to the comprehensive Ustar management investment plan.

• Six Park

  Six Park launched in 2016 after two years of testing. Six Park offers five investment portfolios ranging from low to high risk. When you invest with Six Park you’ll pay a one-off establishment fee and a management fee based on your balance. The management fee is deducted from your account every month and is calculated based on your average account balance in the preceding month. The management fees are: 0.50% p.a for balances between $10,000 - $199,999.99, 0.40% p.a for balances between $200,000 - $499,999.99 and 0.30% p.a for balances above $500,000. There is no annual administration fee.

Other services

In addition to the online robo advice services listed above, it’s also worth pointing out that there are some robo advice services that are only available through a financial adviser. One such service is Guru, which was launched in June 2015 by Yellow Brick Road Wealth Management. The initial Guru session is free and takes place with a Yellow Brick Road Money Coach, allowing you to assess your financial goals and what you need to do to achieve them.

Access to the robo financial management tool and a Yellow Brick Road adviser is then provided for an ongoing fee. The big banks are also moving into the robo advice sector. NAB rolled out its Prosper service to 40,000 customers in September 2015. Available through Internet banking, Prosper asks customers questions about their current financial situation and future goals before providing tailored advice and assessment. Initially designed to provide personalised advice on super and insurance, Prosper is scheduled to expand into debt, cash flow, investments and estate planning in the future.

Robo advice is changing the face of wealth management around the world and could offer a more affordable way for you to look after your investments. However, make sure you compare the benefits and features of a number of robo advisers before choosing the right service for you.

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