Remember your first online purchase? Gingerly keying in your card details and hitting enter. The quick rush of adrenaline you get from shopping and the nerves that you had trusted your card 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.
All legitimate concerns.
In this article we’ll answer some common questions we get from clients about how we look after 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?
- Will you sell my personal data?
- What happens if Stockspot stops operating?
Is Stockspot regulated?
Stockspot is authorised by the financial regulator, ASIC, to provide personal investment advice and managed discretionary account (MDA) services.
Our mission is to re-engage a generation of Australians locked out of the market for personalised investment advice due to the high costs, conflicts of interest and outdated technology.
For this reason we take regulation around digital financial advice as a serious issue. We want the digital financial advice space to remain free from the conflicts of interest and 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.
Stockspot does not receive kickbacks or commissions from the funds we recommend to you. In fact we have actively lobbied the government to close this loophole because we still see many traditional advisers recommending poor investment products.
We only recommend investments designed to grow your savings and help achieve your financial goals.
Stockspot Pty Ltd (ACN 163 214 319) operates as an Authorised Representative (AR No. 453421) of Sanlam Private Wealth Pty Ltd (ABN 18 136 960 775) AFSL Number: 337927
Is my money safe with Stockspot?
To boost safety when you invest with Stockspot, all of your investments and cash are held in your own name on your own Holder Identification Number (HIN) rather than mixed up with other peoples. This also keeps your investments ringfenced (i.e. individually separately held) from a tax perspective and to ensure 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 peoples, as is done in 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?
You can make a withdrawal from your portfolio back into your linked bank account at any time.
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 some or all of your portfolio and transfer the funds into your linked bank account. The process typically takes 4 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, market risk.
However ETFs are one of the safest 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 by 35% to 58% compared to just owning a portfolio of Australian shares. Taking less risk and achieving similar returns.Based on 5 year historical realised volatility (p.a.) as a percentage of the S&P/ASX All Ordinaries realised volatility as of 31 December 2019
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.
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.
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. Our bank-level web security keeps your information safe and secure with our 256-bit SSL/TLS certificate. We keep your personal information secure and will never sell it to outside third parties.
We use various other measures to ensure your data and account are secure, such as database encryption, penetration tests and Certificate Signing Request technology. We’ve also introduced optional two-factor authentication (2FA) to add a second layer of security to withdrawals made on your account.
What happens if Stockspot stops operating?
Your money and investments remain safe.
In the unlikely event Stockspot stops operating, you simply keep holding your cash and investments. All assets are held in your own name when you invest via Stockspot. Cash is held in an individual Cash Account and 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.