18 LISTENER MAY 26 2018
M
ost New Zealanders’
investments are tied up
either in the family home
or, increasingly, their
KiwiSaver accounts.
However, for those Kiwis
who can’t or don’t want to buy a house,
who are retired and have lump sums
to invest, or simply have cash to spare,
investment has traditionally required
payments to share brokers, investment
advisers or some other intermediary.
And to be attractive as a customer of
brokers and advisers, an investor has
needed serious capital. Even today, special-
ist advice firms aren’t really interested
unless you walk in the door with at least
$250,000.
However, digital technology is starting
to disrupt investment choices, making
previously unattainable options available
to individuals with as little as $5 to spare.
Perhaps surprisingly, there are few such
offerings yet in the New Zealand market,
but two new kids on the block offer a
glimpse of the future.INVESTMENT
Going it alone
Start-ups are ofering low-fee options to DIY investors.
No fees: InvestNow’s
Mike Heath.SHARESIES
Launched a year ago, Sharesies charges
a $30 annual fee to manage invest-
ments that can be as little as $5 a
time. For new sign-ups, $15 of the fee
goes straight into their investment
“wallet” – an online app that lets
Sharesies investors track and change
their investment options through their
smartphone.
A year on, the average investor is
making a $30 a week commitment,
80% of its more than 14,000 customers
are under the age of 40, and they’ve
invested about $14.5 million in 11
exchange-traded funds (ETFs) – a kind
of passive-investment vehicle. Sharesies
offers a range of investment choices,
including NZX Smartshares, ethical
investment funds and offshore funds.
The group of seven youthful founders
raised $2 million in a private capital-
raising and share a cramped room nearthe top of Wellington’s Cuba St, where
former KiwiBank employee and Sharesies
chief product and marketing officer Sonya
Williams says they are “investing for
growth”, which is start-up-company code
for intentionally not yet profitable.In researching its market, Sharesies
found people in KiwiSaver didn’t think of
themselves as being investors. Many felt
“priced out, jargoned out, and branded
out”, says Williams. “The propositions
weren’t built for people who didn’t live
and breathe that investing world. Therewas a perception it had to be an obsession.
“We’re on a high-growth trajectory,”
says Williams who notes that, unlike most
start-ups, their first hire was a lawyer. “We
couldn’t do a minimum viable product.
You can’t have an investment product
without being compliant.”INVESTNOW
InvestNow might best be described as
“Sharesies for Mum and Dad”. There’s
nothing funky about its website. There’s
none of Sharesies’ “gamification” or send-
ing of messages saying “Chur!” if your
investment portfolio gains in value.
Where Sharesies has a blog offering
basic investment insights, InvestNow has
“no investment advice whatsoever and
charges no fees”, says general manager
Mike Heath, a former head of RaboDirect,
the retail banking arm in New Zealand of
Dutch farm lender Rabobank.
But the concept is similar to Sharesies.People in KiwiSaver
didn’t think of
themselves as
being investors.