Pat Garrett

Online investment management service Six Park has lowered its minimum investment to $2,000 to help even more Australians access affordable professional investment.

This follows a previous lowering of the minimum investment amount from $10,000 to $5,000 in March 2020.

The move comes at a critical time in the world of investing: the appetite for investing is at an all-time high and so is the need for accessible and affordable investment guidance, says Six Park co-CEO Pat Garrett.

“This is also clear to our growing number of partners, who come from a diverse range of backgrounds, including financial advisers, accountants, and wealth coaches. All of these partners recognise the importance – and indeed the responsibility – of providing people with an alternative to DIY investing, which can be stressful, expensive and incredibly difficult,” Mr Garrett says.

“We expect to see the enthusiasm Australians have for investing to continue – especially with low interest rates and an increasingly inaccessible property market – and as an industry, it’s important we respond to that and recognise that people need affordable help and effective ways to invest their money and navigate the risks involved, no matter how much they have to invest.”

Smaller investors face a range of challenges that robo-advice is well-placed to address, Mr Garrett says.

“Setting up and managing a diversified portfolio – and doing it well – is a lot harder and more expensive than many people realise. It can also be hard to diversify with smaller amounts, and many DIY platforms aren’t easy to use.

“Australians want support to invest, and we’re proud to be providing our partners with affordable solutions for their clients that solve some of the most common problems they’re likely to face.

“Most advisers have highlighted the opportunity of using Six Park’s services for these investors over the unspoken reality of turning low-balance investors away or sending them off with some ad hoc advice on exchange-traded funds without the investor receiving ongoing professional oversight and rebalancing in line with their risk profile.”

A Vanguard report on Australian attitudes and approaches to investing released earlier this year showed that 35% of Australians believed they needed more than $10,000 to start investing.

“This is a concerning misconception because it means many Australians are missing out on the opportunity to make their money work for them.

“By broadening access to our portfolios we’re also maximising opportunities for our partners to engage with more clients and connect with them earlier in the financial journey. With advisers, we’ve seen this play out when considering how to best help the children and grandchildren of clients who want to start their investing journey.”

The lower entry level is also expected to attract younger investors, who currently make up about 1 in 5 of Six Park’s investors according to a recent client survey.

“There’s a clear appetite from young investors to not just start investing, but to invest with professional support,” Mr Garrett says.

“By offering a diversified, affordable option at a lower investment point, we’re already seeing younger investors who are excited about getting started sooner or including professional management as part of their overall investment mix.”

Clients investing between $2000 – $5000 will be invested into four exchange-traded funds (ETFs) – a carefully chosen subset of the globally diversified ETFs used in Six Park’s standard portfolios, designed to optimise diversification and returns while minimising fees at that investment level.

Once clients reach $5,000 the funds are traded into a full portfolio across eight ETFs. Clients with account balances under $5,000 will pay $6.25 in fees per month.

Six Park is also offering three months without management fees to all new clients, including clients of partners, until October 31.

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Victoria Devine

She’s on the Money founder and Zella Wealth director Victoria Devine has stepped into the world of online investment management to meet a growing demand from her community of over 160k and to assist those falling into the advice gap in Australia.

This week she’ll launch the She’s on the Money online investment platform, powered by Six Park, to provide investors with a trusted way to access diversified and affordable investing, including sustainable investment options.

“The number one question our community asks is ‘Where do I invest?’. A lot of these people are already using savings and investing apps, but they want to take their investments to the next level,” said Victoria.

“Women are highly motivated to invest, but there’s a lot of uncertainty out there and that’s when we realised there’s a massive problem and a huge gap in the market,” says the host of Australia’s number one business podcast.

“There are so many platforms encouraging people to pick stocks, but doing it yourself requires time and experience; it’s not the way for most people to build their wealth and I want to give my community more support than that.

“But the cost of getting financial advice – particularly as you are building your wealth – is simply too expensive for many of my community.

“So I knew I had to provide a solution but not just anyone has the experience and ability to build and deliver an affordable, professional investment management service from scratch.

“We’re very careful about who we align with and we engaged in a long process of research and due diligence to find a suitable partner. Six Park has proven to have an impressive pedigree in its Investment Advisory Committee, extensive experience, an understanding of our audience and a professional approach to partnerships. Six Park’s investment philosophy also aligns really strongly with our approach at She’s On The Money.

“We want our community to think long-term, we want them to be well-diversified, and we want them to be able to get a well-assembled investment portfolio that aligns with their goals and level of experience.”

Recently named in the Forbes 30 under 30 list, Victoria said she sees a once in a lifetime opportunity to change a generation’s financial literacy and wealth position.

“I was once turned away from a financial adviser and I know what it feels like to feel financially lost and like you’re missing out on services and opportunities that the wealthy take for granted.

“That’s why taking this step to be part of the solution is so important. As financial advisers we all need to work together to help people. Different clients have different needs, and different business models can meet all of those needs. We need to stop worrying about the competition, stop seeing technology as a threat and stop saying it’s too hard to address the advice gap and throwing our hands in the air. It’s time for solutions – not in five years’ time. Now.”

Co-CEO of Six Park Pat Garrett said it was refreshing to work with someone so passionate about financial literacy who clearly sees the problem and is enthusiastic about actively helping to solve it.

“It certainly aligns with our passion, which is what makes this partnership so great,” said Pat.

“We want to help more Australians in real and tangible ways and we’re pleased to be collaborating with She’s On The Money at a time when so many women are already voicing a desire for help with investing.

“The spotlight on investing is brighter than ever before, with many Australians actively interested in entering the market, if they haven’t done so already. That’s great news, but we are now determined to help people make smart choices so their investments perform and build their wealth for the future.”

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Pat Garrett

A new white paper (Is it red tape or is it me? Deniers, devotees, and the digital advice revolution) commissioned by online investment manager Six Park has revealed that COVID-19 has increased the pressing need for affordable and accessible financial advice in Australia, but the need can’t be effectively met until perceived red tape is cast aside.

The increasing and changing demand for advice is driven by a range of factors including the royal commission, the diminishing number of financial advisers, changing client demographics and, most recently, the impacts of COVID-19.

The pandemic, subsequent economic downturn and looming opportunities during the recovery phase mean that more Australians need advice than ever before, says Six Park co-CEO Pat Garrett.

“The white paper reinforces that there simply aren’t enough advisers in Australia to meet the current and future anticipated demand for advice,” said Garrett.

“Meanwhile, the pandemic has triggered an increased interest in investing amongst Australians and the lockdown has made digital interaction and service provision the new norm. All of these elements are combining to provide the final push for the industry to transform in a way that meets today’s client needs.”

Who the client is and what sort of advice they need was also a topic explored in the white paper by contributors including Investment Trends Research Director Recep III Peker, Netwealth CEO Matt Heine and FPA Head of Policy, Strategy and Innovation Ben Marshan, with agreement that the definition is changing – and fast.

“The increase in the number of Australians needing financial guidance, the rise in millennial and female investors and the immense generational wealth transfer we’re about to see means the nature and needs of the broad consumer market are becoming much more diverse. This is the opportunity for those advisers ready for this transformation,” said Garrett.

“Many of these Australians don’t have huge budgets for advice, they have no desire for full-scale service, and they don’t want to engage with advisers in the same way their parents did – so ‘best fit’ advice is not what it used to be.

“Anything that allows advisers to better engage with these Australians today is a very attractive proposition and that’s where digital solutions come in. Today’s digital advice client could be tomorrow’s wholesale investor.”

The white paper explores a number of myths and perceived ‘red tape’ that is hindering some in the industry when it comes to embracing digital, scaled advice. These includes the misguided belief that this type of advice is not compliant with best interest duties, that ASIC doesn’t approve and that digital solutions like robo advice are competing with traditional financial advisers.

“There is no competition there – in fact, when a human element is added to a service like robo- or digital- advice, the conversion rate of customers who actually implement the advice drastically increases – and the paper provides insights from Australian financial planners who are already in the process of successfully transforming their offering and broadening their appeal with digital solution partners.

“It’s both an exciting and challenging time for the industry. There is a lot for advisers to work through – there is no denying that – but there is certainly no red tape that’s blocking their way and some aspects of going digital could actually be much easier than first perceived.

“We all need to work together to create the vibrant, successful and sustainable wealth management industry – to benefit clients and advisers alike, now and into the future.  That’s the driver behind this paper – to generate discussion, collaboration and contribute to the knowledge bank around the digital transformation of wealth management in Australia.”

Commenting on the Financial Services Council’s Future of Advice Report, released earlier this week, Mr Garrett said the report provided some interesting proposals, specifically around recognising more explicitly that consumers’ needs vary in scope and complexity.

“While there is still room for policy improvement in Australia’s financial advice landscape, regulators have already recognised that there are differences in consumers’ advice needs. Their response has been to reiterate that scaled and digital advice should play a prominent role in providing services for the simpler needs of the mass market. Scaled advice services already have regulatory guidelines supported by ASIC and the federal government, and the good news is that scaled advice is working right now. There is no need for advisers to wait for the kinds of changes the FSC is advocating to take a step towards the future of advice.”

Download the whitepaper.

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Pat Garrett

Leading Australian online investment provider, Six Park, says ASIC’s latest report (Financial Advice: What Consumers Really Think) confirms the need for industry change and showcases the great opportunities that lay ahead.

Six Park co-CEO Pat Garrett said the research supported what was already anecdotally known throughout the industry – high fees and low trust are major issues for advisers to combat, and technology can help when it comes to designing a new model for the future.

“It’s clear that many consumers want financial advice, particularly about investment in shares and managed funds, but the cost of this advice and finding an adviser they trust is a huge barrier,” said Mr Garrett.

“This is what we’ve been hearing from clients for some time and why alternative services like robo-advice are experiencing significant growth, especially after the Banking Royal Commission brought all of these issues to the surface.

“When looking at barriers to advice, we can also see that many Australians either think that their financial circumstances are too small to warrant financial advice or like to manage their finances themselves, suggesting there is definitely a middle ground of advice that’s not being catered for effectively in this country.

“If someone with $10,000 or $20,000 to invest is only given two options – a personalised investment strategy costing around $3,000 for a statement of advice or the other extreme of having to make all the investment choices for themselves – then it’s not surprising that so few people are seeking the advice they want and need.

“What’s positive is that technology is helping bridge that gap. The wealth management industry is poised for huge changes in the next few years, and we see this as an exciting and transformative opportunity.”

Mr Garrett said the report also reinforced the need for more financial education for consumers and the necessary move towards simpler solutions.

“The report shows that one of the huge roadblocks for some Australians when it comes to their finances is ‘getting around to it’ – reflecting both our busy lifestyles but also our mind’s tendency to delay these sorts of decisions.

“Lack of interest, feeling that it’s too hard, perceived risk, perceived lack of relevance and not wanting to change lifestyle are all reasons Australians are giving for not seeking financial advice – so as an industry, it’s up to us to make solutions that are simple, relevant, tiered to different consumers, easy to implement and transparent.”

Mr Garrett also noted it was promising that Australians were open to digital advice – of participants who had recently thought about getting financial advice but had not gone ahead, 37% were open to using digital advice.

“It takes time for an industry to change but it’s promising that a high number of Aussies are open-minded regarding the ways financial advice can be delivered.

“In the US, we’re already seeing online investment providers and financial advisers working side by side very effectively. This new direction was very much driven by consumer demand in the wake of the GFC.

“Robo-advice can stand independently for consumers with straightforward investment needs; equally, it can be very complementary to face-to-face human advice when that is needed. What we need to focus on, as an industry, is creating service models for the future that meet clients’ needs at every stage of their lives.”

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Pat Garrett

A customer insights study by automated investment service Six Park has found that more than half its clients are using the robo-investment service to grow wealth outside of super (36.5%) and for retirement savings (28.6%). These long-term goals ranked higher than the desire to save for property or saving for short-term goals such as holidays and weddings.

The study results were released as Six Park celebrates its second birthday.

The highest percentage of customers using their Six Park investment as a way to generate wealth outside super came from age groups under the age of 45, suggesting that long-term investing is increasingly a focus for younger generations.

“It’s very encouraging to see younger people be more engaged with their long-term savings activities, especially in the 18-24 age bracket,” noted Six Park CEO Pat Garrett.

“It’s no surprise that the younger demographic is embracing technology in financial services, and these results demonstrate that these clients understand that investing is not about getting rich quick or timing the market – it’s about creating wealth over time through intelligent investment diversification and keeping fees low, the main value propositions of Six Park”, he said.

There were several interesting differences between the company’s female and male clients.

Female clients’ top concern about the current investment landscape was not being able to invest in property near-term (25% of respondents) compared with just 10% of men. Half of Six Park’s female clients check their investment portfolios an average of once a month, while more than half of the company’s male clients check their portfolios weekly or even daily.

This is consistent with evidenced that female investors tend to be patient investors who focus on long-term goals.

“An analysis of more than 8 million clients by Fidelity in 2017 suggested that women outperform men when it comes to generating a return on their investment, so this client feedback is not surprising.  We’re very pleased to see more women using robo-advice as a smart way to build their savings,” Mr Garrett said.

Across all respondents, the major concerns about the general investment landscape were, in order: prospective returns (23.3%), market volatility (16.7%), trust/transparency (13.3%) and not being able to invest in property (13.3%).

For those aged over 45, the biggest concerns were the cost of financial advice and not retiring with enough savings.

The survey was conducted before the Royal Commission’s recent findings of problems in the investment management industry in Australia.

“I would expect that client concerns about fees, transparency and long-term returns would be even more heightened given the abuses uncovered in the market,” Mr Garrett noted.

Not surprisingly, the top two reasons for choosing robo-investment were lower fees (18.3%) and investment diversification (16.7%).

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