What’s the problem? For the self-directed investor, there’s a bit of work to do in order to access and manage your investments. Accounts with various banks, potentially a share-trading account, a couple of online platforms perhaps. Different credentials to recall and most annoying, AML/ CFT (compliance / ID checks) process to go through each time.
What’s Invest Now? It’s a simple and affordable way to access multiple investment options in one place.
Mike Heath joins me on a discussion that we had when I went down to Wellington recently, via Christchurch (no, it’s not on the way).
These online investment platforms are popping up everywhere it seems – they all work a little different to each other and they serve a different community of DIY investors out there. I’m learning about them at the moment so hopefully, this is of interest to you also:
Here are some key ‘light-bulb’ moments covered in this episode:
- Often people may be afraid to seek financial advice as they believe they’re not smart enough to do so. Seems counter-intuitive, but it does make sense. The reason we need advice is that we don’t have all the answers, but often pride can act as our own worst enemy here. We hate to admit it when we don’t have the answer.
- The bulk of New Zealanders are un-served by financial advisers – online platforms like Invest Now provide a very inoffensive and un-daunting access point for many who may be afraid to engage in a face to face encounter with a financial adviser. If there’s a need and desire to use an adviser, however, the Invest Now platform can actually now accommodate that too.
- Mainstream media. Often credibility is bestowed upon advertisers – this is crazy but just because a finance firm during the finance company collapse a decade ago advertised in the Herald, doesn’t mean the trust placed in them was justified. Mainstream media can be an excellent platform to increase financial literacy – but this doesn’t always occur.
- Whether it’s an online investment platform, KiwiSaver, or another investment product you access through an adviser, often a ‘custodian’ is used. In this episode, Mike covers how platforms, custodians, fund managers and investments all work together.
- What’s an ETF, a mutual fund, or an index fund?
- Self-employed people often don’t have KiwiSaver but they should. Beyond getting the tax credit however, online platforms like Invest Now offer another alternative way to simulate what’s in a KiwiSaver fund.
It’s great to see online investment platforms grow in popularity – There will likely be much innovation happening in digital advice and robo-advice space in the coming years. Will financial advisers be made redundant as this trend roles on? No, but I do think the role of an adviser needs to change dramatically. Removing friction is what these platforms do well, but the easier it is to get in, the easier it is to get out of investments also – perhaps the biggest strength is also their biggest weakness – enter the new breed of financial advisers.