Investors will soon have another online investment supermarket to choose from with another player set to enter the market.
Flint Wealth, a joint venture between fund manager Harbour Asset Management, Trustees Executors and Australian research firm Research IP, will soft launch in the next few weeks before its full launch in early December.
It will go head to head with Sharesies and InvestNow which already offer retail investors the chance to invest directly into investment funds, term deposits and shares.
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Those platforms have seen a massive boost in new customers this year as Covid-19 drove people online and falling interest rates at the bank have forced investors to look elsewhere for better returns.
Stuart Auld, client engagement manager at Flint Wealth, said its target market was people aged 25 to 50 years old.
“We are not targeting the very young ones, which would be the Sharesies type, what we are doing is targeting people who have a little bit of money to invest.
“They probably go with brand and recognition, a lot of them are keen to do it online. And it has been reinforced even further with Covid where people want to do things at arm’s length.”
The investment platform will initially offer managed funds from 10 New Zealand fund managers with plans to add a second tranche of a further 10.
Auld said it would then look to expand to offering Australian unit trusts and term deposits and eventually shares.
It will have a minimum investment of $250 and won’t charge any fees for its basic offering. That is similar to InvestNow which has a minimum of $50 for regular investment and $250 for a one off.
Sharesies has a different charging model using subscription fees. Those who invest under $50 are free, for investments of between $50 to $3000 its $1.50 a month and for investments over $3000 its $3 a month.
It also charges a transaction fee for buying and selling shares in companies based on the dollar value of the trade with 0.5 per cent charged on orders up to $3000 and 0.1 per cent for amounts above $3000.
“We welcome competition as the more players there are in the retail investing space, the more drive there is for us to provide the best product for our investors, which ultimately gives Kiwis the best possible access to the stock market,” A Sharesies spokesperson said.
Auld said it was considering charging a fee in the future for a premium service which could include access to investment reports or research reports on managed funds.
It will earn commission from the fund managers who use the site to market their funds.
Auld said it was more a competitor for InvestNow than Sharesies.
“We are not trying to compete with Sharesies, they have a different demographic, and they tend to be people who want to put $50 in, see if it goes up and then take it out. What we are looking at is much longer-term investors. And as well as having a very big digital marketing programme, which is what Sharesies, Investnow and Hatch do, we also believe there is a role for a physical presence as well.”
He said in the same way share brokers had roadshows where they went around the country talking about investments, it planned to hold roadshows for the fund managers.
“We plan to have, whether it is digitally or physically, those events where a fund manager can speak to a group of interested investors at the same time. We also are quite prepared to promote fund managers that come on board.”
Auld said he believed there was enough demand for all of the platforms although it planned to take Flint overseas in the future as well.
Flint will also launch a service for financial advisers next year.
InvestNow’s founder Anthony Edmonds was not worried about another new entrant and said his business had benefited from the launch of new platforms, which had increased people’s knowledge about and interest in investments.
“Lots of people come to InvestNow looking for our managed funds or KiwiSaver scheme because they have seen Sharesies advertising trading direct shares on TV,” Edmonds said.
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