Stockspot lowers fees but reduces honeymoon period
Robo-adviser Stockspot has halved the period of its free introductory offer for savers with less than $10,000 but has compensated clients with lower fees thereafter.
Stockspot has reduced the initial fee-free offer for savers with small balances to six from 12 months. Thereafter, instead of charging a $77 annual advice fee plus a 0.92 per cent management fee, the automated advice platform has introduced a flat $79.20 annual management fee.
The new fee model comes as competition in the robo-advice sector heats up, with recent launches of competitors such as Superstash and Six Park, which is backed by former federal finance minister Lindsay Tanner, founding head of the Future Fund Paul Costello, former Future Fund board guardian and chairman of JP Morgan Australia Brian Watson and former vice-president at JP Morgan.
Stockspot chief executive Chris Brycki said the narrowing of the honeymoon period reflected the company’s improved brand recognition, while the reduction in advice fees was possible because the algorithms had improved as more savers had signed with the company.
“Fees were initially higher because we had to spend a lot of time making sure the investments were suitable for clients. We have now built a lot of checks into the system so these are handled automatically,” Mr Brycki said, pointing out that Stockspot offered advice that was tailored towards an individual’s financial circumstances.
The change means that a saver with $8000 who invests with Stockspot for two years will see their average annual fee reduced from 0.94 per cent to 0.74 per cent.
If the investor remains with Stockspot over five years, the average annual fee will fall from 1.5 per cent to 0.89 per cent.
Stockspot has dropped all advice fees for investors with less than $50,000.
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