Remember your first online purchase? Gingerly keying in your credit card details and hitting enter. The quick rush of adrenaline you get from shopping and the nerves that you had trusted your personal details into the ether of the internet.
That first purchase required you to trust that your card details and your money would be safe.
Investing with Stockspot can be a similar experience and even daunting the first time, particularly if you have previously dealt with a human financial adviser. You need to trust that your personal details and your money will be kept safe and secure.
It’s an issue we take seriously and it’s as important to us as it is to you.
When you send your money (anywhere) you want to know that:
- It is safe; and
- Your personal information won’t be compromised.
Both are legitimate concerns.
In this article we’ll answer some common client questions about how we are protecting their money and personal details.
- Is Stockspot regulated?
- Is my money safe with Stockspot?
- Can I access my money whenever I need?
- Are there any risks investing in ETFs?
- How does Stockspot protect my data?
- Will you sell my personal data?
- What happens if Stockspot stops operating?
- What happens if an ETF shuts down?
Is Stockspot regulated?
Stockspot is authorised by the financial regulator, ASIC, to provide a range of financial services including personal investment advice and managed discretionary account (MDA) services.
We’re a fully licensed Australian Financial Services provider (AFSL 536082).
We want the digital financial advice space to remain free from the poor advice that pervades the traditional advice industry.
In 2015 Stockspot was part of the consultation process to formulate regulation on providing digital financial product advice. Officially known as CP254, Regulating Digital Financial Advice Product, ASIC’s approach to the regulation of digital financial advice in Australia.
Furthermore many of the recommendations to strengthen regulation submitted by Stockspot were included in ‘RG255 – Providing digital financial product advice to retail clients’. RG255 is the regulation on providing digital financial product advice to retail clients. We recommended that digital finance advice should be subject to the same regulation as traditional wealth managers.
We comply with all relevant Australian financial advice regulations and we go several steps further than most traditional financial advisers like keeping our clients’ money separate and in their own names via their own HIN.
Stockspot does not receive commissions from the funds/ETFs we recommend. In fact, we have actively lobbied the government to close this loophole for products like LICs because we still see many traditional advisers recommending poor investment products.
Is my money safe with Stockspot?
When you invest with Stockspot, your shares are owned by you, and safely registered with the ASX under CHESS sponsorship.
All of your investments and cash are held in your own name on your own Holder Identification Number (HIN) rather than pooled with other people. This also keeps your investments ringfenced (i.e. individually separately held) from a tax perspective and ensures asset protection.
We think it’s better for clients to own shares in their own name/legal entity. When you mix shares and assets with other people, as is done by some investment services, there is a risk that your assets won’t be accounted for correctly, and you rely on the creditworthiness of the counterparty.
In this article we explain why it’s safer to own your investments directly.
Each Stockspot client owns their portfolio individually on their own individual HIN – it’s a safer way of investing and means you can get full tax benefits from your investments. Your portfolio is owned by you and managed for you according to the investment recommendation we provide based on your personal financial circumstances.
Can I access my money whenever I need?
Once you set up Two-factor authentication (2FA) to secure your account, you can make a withdrawal from your portfolio back to your linked bank account at any time. Our client care and operations teams closely monitor all withdrawals and may contact you to verify account information ahead of processing a withdrawal.
When you start investing with Stockspot we suggest that you only consider investing if you have an investment horizon of at least a few years. This helps to ensure that you have the best chance of success when you invest. However, if you need money to fund unforeseen expenses or your circumstances change, it’s easy to withdraw your money at any time.
You can withdraw your investments by requesting a withdrawal under ‘Transfer money’ in your Stockspot dashboard. Once you submit the request we’ll sell down your portfolio as instructed and transfer the funds to your linked bank account. The process typically takes four business days before you see the money in your account in line with the ASX’s settlement timeline.
Are there any risks investing in ETFs?
Yes, There is market risk.
However due to their diversified nature, broad index ETFs are one of the safer ways to invest and reduce your investing risk. This is why we recommend them.
Investing always comes with some market risk. To achieve a higher potential return than leaving your money in the bank you have to be willing to accept some ups and downs along the way.
However, compared to buying individual shares, ETFs allow you to reduce your risk through broad diversification. Stockspot carefully spreads your money into different market sectors (like healthcare, technology, utilities), countries and asset classes to reduce your risk.
Doing this while maintaining a long-term outlook helps to ensure you’re well positioned to weather all types of market conditions and reduces the bumps along the way. Our portfolios have been able to reduce risk compared to just owning a portfolio of Australian shares. Taking less risk and achieving similar returns.
ETFs are also less risky than other types of investments like managed funds and Listed Investment Companies (LICs) because of their structure. ETFs are open-ended funds which means that you can be confident that they will always trade very close to their fair value (Net Tangible Assets) and your money won’t get ‘locked up’ which can happen with managed funds.
How does Stockspot protect my data?
When going through our sign-up process, we ask for your personal information to help verify your identity and ensure we’re giving you appropriate investment advice. Personal information is stored securely and only shared with third parties in accordance with our Privacy Statement.
We use various other measures to ensure your data and account are secure, such as database encryption, penetration tests and Certificate Signing Request technology.
Two-factor authentication (2FA) provides an extra layer of bank-level security.
We keep your personal information secure and will never sell it to outside third parties.
Will you sell my personal data?
We will never sell your personal information to unrelated third parties or advertisers like some other investment products and round-up apps do. The only way we make money is from our clients paying us directly. We think it’s wrong to be profiting from selling our client data to advertisers.
What happens if Stockspot stops operating?
Your money and investments remain safe.
In the unlikely event Stockspot stops operating, you simply keep holding your investments. All investments are held in your own name when you invest with Stockspot. All ETFs are held on an individual client Holder Identification Number (HIN) with the ASX sub registry. You can simply move them to another adviser or broker or withdraw from your portfolio.