Sharesies to look at robo-advice once regulator rules on exemptions

Start-up fund distribution platform Sharesies will develop a plan to provide personalised, automated financial advice, known as robo-advice, once there is more clarity about regulatory exemptions.

Last month the Financial Markets Authority decided to grant an exemption to enable the provision of robo-advice services under the current financial advice regime and said it aims to finalise the exemption and be open for applications in early 2018.

"Once we get more information about the exemption process, whether it applies to us, then we will come up with more of a plan as to how we will go about getting more people access to advice," Sharesies founder and chief executive Brooke Anderson said.

In its submission to the FMA ahead of the decision, Sharesies said New Zealand is currently lagging behind other markets in this area and "as a result, many retail customers with smaller balances are not receiving access to affordable, good quality financial advice."

Anderson said there are barriers for people to access personalised financial advice, but "financial advice should be available for everyone." However, "we still have to build out what this will look like once we see where the legislation lands," she said.

The aim of Sharesies, which launched in June and now has more than 8,400 customers and $5 million invested through the platform, is to provide a mechanism that allows people to make regular, small investments in a broad range of funds, giving them access to opportunities which typically have a minimum investment.

The goal was to "make investing as easy as online shopping," said Anderson, adding that Sharesies broke down the barrier of price as investors pay an annual subscription of $30 for unlimited trades and can then make investments that can be as small as $5.

The majority of investors are between 25-and-35 years old and according to Anderson the largest investment was a one-off $100,000 and the smallest was 28 cents. Most people, however, tend to invest around $50 a week, she said.

Sharesies doesn't charge a management fee but gets a distribution rebate from the funds, said Anderson. It also earns aggregate interest on any funds that are just sitting in a customers' online accounts.

The company is now in a phase "where we are all about scaling and growth," she said. She said there was enormous scope to grow as the 8,400 customers it currently has are really "the early adopters"

Sharesies currently gives investors access to eight funds, including two sustainable investment options: The Pathfinder Global Responsibility Fund, and the Pathfinder Global Water Fund. The other six are exchange-traded funds.

Anderson said Sharesies could look at expanding to offer access to individual shares in the future but said it would need to be coupled with research and advice. It started with funds as it wanted to ensure diversification and liquidity.

The platform has also recently attracted Alison Gerry to the position of chair. Gerry is currently a director of Spark, Infratil, Wellington Airport and Vero Insurance. "She has really rolled her sleeves up and is in there with us," said Anderson. "She's added value from day one."

(BusinessDesk)