Raiz review Australia – is Raiz safe to invest with?

Raiz invest review (previously Acorns Australia) by an experienced and long term investor. Is Raiz safe and can it help you invest?

Raiz review Australia, is Raiz safe?

Raiz (previously known as Acorns Australia) was one of the first microinvesting platforms in the country, and is even now a publicly listed financial services company (ASX:RZI) headquartered in Sydney, Australia with over 300,000 registered users of the app. Raiz has over (AUD) $200 Million under management, with an average account balance of over $1200 per user.

Raiz has since diversified into other areas (such as superannuation and affiliate raiz rewards) but its main business lies in its function as a microinvesting platform. Investors can learn the ropes about investing through Raiz with a choice of six diversified ETF offerings, as well as and investing mechanics such as fractional investing and round ups.

“I think it’s a great introduction for novice investors, which is why it’s been so successful….”

Scott Pape, The Barefoot Investor

You don’t need any investing knowledge or minimum amounts of money to get started investing with Raiz, which makes investing both incredibly accessible and easy to do. Raiz is very popular with tech savvy millennials, where the ease and flexibility of passively investing their spare change has proved highly attractive. There are a few things you need to know about Raiz however, before you go signing up…

The Good

  • Round ups help automate contributions to grow your investment
  • Plug-and-play choice of pre-set portfolios
  • Can create your own using different ETFs (this is what I do)
  • Great mobile app
  • Choice of ethical investment option
  • Hold an Australian Financial Services Licence and listed on ASX

The Bad

  • $2.50 monthly fee can eat away small balances
  • Pre-set portfolios overly conservative
  • Advertising on app is annoying
  • Raiz gets read only access to your bank account and likely sells your aggregated purchasing data to investment fund managers and banks
  • Not CHESS sponsored (however funds are insured)

Verdict: Raiz is a great way to get started microinvesting
FREE $5 bonus sign up code: 35UTCH

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Raiz Invest can be accessed on the cloud through a web client, or on Android or iOS mobile devices through the Raiz Invest app

Introduction to Raiz Invest

Raiz Invest is a microinvesting platform which lets you ’round-up’ your spare change from purchases into the platform. This can then be invested into six different ETF portfolios depending on your personal level of risk. Raiz was initially launched as Acorns, but after growing it was rebranded and then publicly listed on the Australian Securities Exchange (ASX:RZI).

Raiz is a user-friendly, automated savings and investment tool which doesn’t seek to generate market-leading returns, though “the average Raiz customer has made 11% per annum since launch and 10.1% per annum in the last 12 months”.

Raiz Managing Director George Lucas

Raiz has also launched several other app features like Raiz Kids, Raiz Insure, Raiz Super and Raiz Rewards, but their core business is the Raiz Invest app.

How does Raiz work?

Raiz works by allowing you as an investor to gradually build up diversified investment portfolio through nifty mechanics like fractional investing and ’round up’ contributions. This means you can be investing small sums of money, and have them all building up and working for you, even while you sleep!

“I had always hoped for a product that’s available to anybody with a few dollars to invest, where investment could be automatic and your money placed in share-based investments without the hassle of going through a broker, paying brokerage or trying to save a big lump sum to get going.”

Noel Whittaker, Finance expert and Author of ‘More Money’ , on discussing Raiz

To start using Raiz;

  • Download the Raiz app on your phone or visit their website to register
  • Set up your account, password and verify your identity
  • Fund your account (min $5)
  • Choose your investment option
  • Set a regular contribution to start snowballing your investments! (you will need to provide bank details for the ’round-up’ mechanic)
  • Withdraw your investments any time you want, fee free!

If you enable the ’round-up’ contribution mechanic, after connecting your bank account to the system, whenever you make a purchase you can have it rounded up to the nearest whole value and the difference be added to your Raiz account. For example if you spent $8.20 at your local Aldi on a 500g bag of awesome coffee beans, you would then have 80c transferred to your Raiz account. When your round-ups reach $5, they are added to your investment pool. You can also make a lump sum deposit to get you started though, and make regular contributions into your account to build your snowball even faster.

Raiz review
Raiz Investment structure

Raiz investment choices

The six investment choices available through the Raiz Invest app are;

  • Conservative
  • Moderately Conservative
  • Moderate
  • Moderately Aggressive
  • Aggressive
  • Emerald (ethical investing fund)

These six investing themes are constructed from a combination of 9 different underlying ETFs (which you could also invest in directly through a conventional broker). Each investment choice contains a different percentage of the underlying ETFs, and Raiz automatically rebalance these portfolios on your behalf to account for market movements. These 9 ETFs (and the crypto fund) are;

  • State street Global Advisors Australian ASX top 200 – ASX:STW
  • iShares Asia top 50 – ASX:IAA
  • iShares Europe to 350 – ASX:IEU
  • iShares USA top 500 – ASX:IVV
  • Russel Australian Responsible Investing ETF: ASX:RARI
  • Betashares Global Sustainable leaders: ASX:ETHI
  • iShares Australian government bonds: ASX:IAF
  • Russel Australian Corporate bonds: ASX:RCB
  • Betashares Australian money market (cash): ASX:AAA
  • Bitcoin crypto currency – NOT an ETF!

As an example, the Rais Moderate portfolio theme consists of;

Raiz review
Raiz moderate portfolio according to their 2020 PDS

You need to thorughly review the Raiz Product Disclosure Statement to get a good idea of what each investment choice is made of, and how that aligns to your personal investing strategy.

Raiz Invest App

Raiz has a fairly well designed and user friendly mobile application, with secure 256 bit encryption to protect your identity, bank account and investments. I actually only use the Raiz Invest app and I don’t use the web client, because it is so convenient.

Raiz invest app
Raiz Invest app

Fees and costs of Raiz

You can choose to contribute into your Raiz Invest account as either regular automatic contributions, one off ‘lump sum’ contributions or via their ’round-up’ feature. These contributions (and any withdrawals) are fee free. Raiz don’t charge brokerage – however you may pay a fee depending on the ‘buy / sell ‘ spread of the 6 ETF choices.

Generally though, Raiz charge a $2.50 monthly account subscription fee on balances between $0 to $10,000 (i.e. you wont pay fees on a zero balance), and above $10,000 it switches to a .275% per annum percentage of your account balance. This means once you hit the threshold account balance of $10,000, the cost becomes $27.5 per year ($2.30 per month). Being percentage based, it then scales up from here.

Remember though, once you invest into the ETFs, each one will have an additional ‘underlying issuer fee’ or ‘Management expense ratio’ which is charged for management within the ETFs and is completely seperate from Raiz. These range from .196% to .418% depending on your investment choice, which in my opinion are pretty high for ETFs.

This means depending on your balance, your total ongoing fees (before brokerage) are probably somewhere in the range of 0.5% to .7% – which in my opinion is pretty high for a passive (index) investment product. For comparison, my USA ETFs cost me .03% and my Aussie ETFs cost me .07% – around 10 to 25 times cheaper!

For the full breakdown, check out the Product Disclosure Statement

Can you make money from Raiz?

Yes. When you have transferred money into the Raiz Invest app (via direct deposit, regular deposit or round up), and have chosen an investment option, that money is invested in the share market through the investment options combination of ETFs.

Raiz is a user-friendly, automated savings and investment tool which doesn’t seek to generate market-leading returns, though “the average Raiz customer has made 11% per annum since launch and 10.1% per annum in the last 12 months”.

Raiz Managing Director George Lucas

Generally speaking, if the market goes up – you will make money if you sell. But if the stock market goes down, you will lose money if you sell. A long term ‘buy and hold’ strategy ignores these ups and downs and lets the long term growth of the market compound.

How does Raiz make its money?

Raiz is a business, and makes its profit in three main ways

Account fees vs Maintenance fees

While it’s free to set up a Raiz Investment Account, once you have more than a zero balance Raiz will start charging you a $2.50 monthly fee. If you have more than $10,000 in your account, Raiz stops charging the monthly maintenance fee and instead charges an account fee of 0.275% per annum, charged monthly.

Netting the Buy/Sell spread

Although you don’t get charged brokerage, Raiz pockets a small amount when it buys and sells ETF units on your behalf. This is called netting the buy/sell spread.

Advertising and selling data

Raiz makes money by selling advertising on its platform. Whilst they claim to always respect your privacy (legally they must disclose your information to the Australian Tax Office though), you should be aware that like most financial services these days (including banks), that your ‘anonymised’ or ‘aggregated’ data is being provided to potential advertising sponsors or investors in the company. To find out more, check the details of Raiz’s privacy policy.

Customer Support from Raiz

Raiz offer email support with a 2 day expected turnaround. They are also active on social media, particularly twitter. I did not have much luck contacting them on other platforms.

Pros of investing with Raiz

Raiz is an awesome microinvesting platform that is great for getting started. It will help teach you the ropes, display the simplicity and power of index investing, let you benefit from fractional investing, Give you the psychological rewards of regular investing and setting up good wealth habits, allow you the power to choose your asset allocation based on risk tolerance, and let you come and go as you please with no cost penalties.

Investing for beginners

Raiz is dead simple to use and there are no entry barriers. At its core, this platform is for novice investors and is designed to help them become an investor and level up their finances.

Fractional investing

Like Stake, Raiz allows you to purchase fractions of shares – called fractional invesing. Within the Raiz Invest app, you are investing into some of the worlds best ETFs – and some of these have a pretty high unit price. With a conventional share trading platform, you would need to save up at least the amount of one individual share in these ETFs (and by the way, most investing platforms usually have a $500 minimum trade anyway). With fractional investing, this means you can be more consistent in your investing and can benefit from having your money invested as soon as possible rather than waiting.

Regular investing

One of the most powerful things you can do for your financial success is to regularly invest. It takes people a while to learn this on their journey to financial independance, and through Raiz’s round up and regular contribution tools you can establish these great habits right from the very start.

ETF portfolio

Because you are investing in a portfolio constructed with ETFs, investing in Raiz helps to reduce your risk through diversification. This is because the ETFs are actually big parcels of shares – for example the iShares USA top 500 – ASX:IVV consists of 500 of America’s biggest stocks.

Risk management and asset allocation

Actually, your Raiz portfolio’s should technically be even less risky than just owning one ETF, because they are made up of varying percentages of Nine ETFs! This way you can actually allocate your investments into one of the six funds depending on your personal risk tolerance and preference for asset allocation (ie aussie shares, international shares, bonds, currency).

Me particularly, I am all about that ‘high risk’ – so I personally go for the ‘agressive option’, but that might not suit your personal financial needs or goals.

Come and go as you please

Raiz have no limits as to how much or how regularly you can deposit / invest or withdraw. You can make them whenever you like, and come and go as you please*

*Whilst there is no brokerage charged, there may be a buy/sell spread on the ETF products that make up the six investment choices

Cons of investing with Raiz

For everything that I like about Raiz, there are a couple of pretty serious drawbacks in my opinion, which might influence how long you stay on the platform. This is basically

Fees eroding your returns

For low account balances, the $2.50 monthly fee could easily gobble up your investment returns. For example, $2.50 adds up to $30 per year of annual fees. So how do you know how much you need to offset the fees?

Well, historically the market has returned close to a 10% annual return, so one might think so long as you have a $300 balance or higher that you would be fine. Well, I don’t know about you but I would be pretty sad to see ALL of my returns wiped out by fees (and sadly, this happens to a lot of young Australians when it comes to their Superannuation).

Having a $600 balance would then potentially mean you could $30 net in profit (noting you would still have to pay tax on the full $60 as capital gains should you sell), and all the while you’ve paid a 5% management fee ($30 / $600 = 5%), before even considering the Management Expense Ratio of the underlying ETFs – and that is also ridiculously high in my books.

Still – its not that simple. Even using a 10% return is overly generous. Investments are volatile, and they fluctuate (go up and down in price over time), so it is best to use the 4% rule (a rule to predict a safe portfolio return) which means we would need closer to something like $30 x 25 = $750 portfolio balance to safely account for all of these fees and any volatility. This somewhat protects you from a situation where your investments go down by half (but you still keep getting charged fees). A $750 balance means you’d be paying 4% in fees (before adding in the ETF MER costs), so as you can see the bigger your balance is, the ‘cheaper’ it gets.

However, as we said in the pros list above, investing through Raiz isn’t really about the returns at all. Its more about the powerful psychology behind regular investing, and the process of learning to invest. I would consider this $30 yearly fee a very small price to pay for these powerful lessons.

Large investment balances

The more you have to invest in Raiz, the ‘cheaper’ your percentage fee becomes – an incentive you to stay on the platform. For balances above $10,000 though, you are switched to paying a .275% rate, rather than the $30 per year. This means if you have $20K invested, you are paying $55 per year.

When you are talking large investment balances like this, lets be honest here – you have graduated from Raiz, and are ready to tackle the big bad world of investing with a conventional broker. Check out the reviews of share trading platforms on here and find one you like.

Don’t expect incredible returns

Because Raiz investment options are constructed from Exchange Traded Funds, they will typically return much closer to the market index average, as opposed to the wild fluctuations that individual stocks can have. I personally think this is a good thing – just don’t expect the incredible returns you see plastered all over the ‘fake guru’ Instagram accounts. Index funds provide you the market average return, and are a boring, reliable, long term method to generate wealth and get rich slowly.

Another thing though… their aggressive portfolio really…. isn’t all that aggressive (well, not in my books anyway). It contains 10% of cash and fixed interest – 3% Australian government bond ETF, 4% Australian Corporate bond ETF, and 3% Australian money market ETF. How can 10% bonds and cash be considered aggressive? Lol.

Raiz review
Raiz invest agressive portfolio

Also, who decided on the asset allocation between Aussie, Asian, European and US shares? One might argue that US shares are more ‘aggressive’ than Aussie shares due to their relentless focus on capital growth rather than reliable dividends. Or perhaps that Asian shares might be more ‘aggressive’ than US shares because it is a developing market. Generally, these ETFs are all ‘large cap’ or ‘bluechip’ stock ETFs, meaning they only hold well established, giant companies – think the Apple, Microsoft, Commonwealth Bank, CSL etc of the world. In my opinion, that makes them (over the long term) pretty low risk. I just find that ironic.

Limited ETF choice

Although they do have a pretty good coverage of ETFs, they aren’t strictly broad market indexes – for example ASX:VTS is which holds over 3000 US companies the smaller companies within the index can have massive upside potential, but in general most of the performance comes from the top movers.

There is also no choice to invest in property directly, although you could argue you get exposure to the property market indirectly through shares in big Aussie manufacturing companies like CSL or other members of the ASX200 index which are heavily tied to the building and construction industry.

It would be cool to see an option for emerging markets, or some additional ETF options within Raiz. However, again, lets not get too ahead of ourselves. The entire purpose of Raiz is to teach you about invesing, not to be a long term ‘one stop shop’ for all investors needs along their entire investing career.

Custodian investment structure

Warning: If you invest through a Raiz Investment Account, the Custodian [InStreet] is the legal owner of your Investments and your rights in relation to your Investments differ from those of direct investors. You will not have rights to attend meetings of holders of your Investments, you will not have rights to make elections in relation to corporate actions for your Investments, and you may have limited cooling off rights.

Raiz Invest

Is Raiz safe?

For all of the reasons we have discussed in this article, yes, I think Raiz is a fairly safe microinvesting tool to be using. Reasons why I think Raiz as a microinvesting platform is fairly safe is because;

  • They hold an Australian Financial Services Licence and are a managed investment scheme who are regulated by ASIC
  • Raiz is a publicly listed Company on the Australian Securities Exchange and have to provide detailed company documentation
  • You generally are only investing small sums on the platform (once you have a decent portfolio, its generally better to invest it outside Raiz).
  • Raiz securely stores information in the cloud on a remote server with bank-level security, secure 256 bit SSL encryption and multi-factor account authentication is used to protect your identity, bank account and investments
  • Your funds are insured against fraud and criminal activity.

Reasons why I don’t like Raiz is because

  • Your underlying investments are actually held on trust by Instreet which I don’t know anything about. If the custodian collapses you still have a legal right to your shares, but as the collapse of BBY has shown Australians, this can be a drawn out process (especially if you need your cash!)

Just make sure you remember though that when you are talking about how safe investing is, it depends on how you have invested. For example, defensive investments like cash and bonds might be a safe bet in the short term, but long term they horrendously under perform aggressive or growth investments. It all depends on your personal circumstance as to what constitutes a ‘safe’ investment for you. Unfortunately, to get financial advice can be expensive (and the irony there is good financial advice is not all that profitable to sell). My personal take is that discipline, a diversified portfolio and a long term investing mindset is the best way to minimise your investment risk.

What happens if Raiz goes out of business?

If Raiz goes out of business, your investments would still be held on trust by a third party, independent custodian – with you as the beneficiary.

“Hypothetically, if Raiz was to suddenly go out of business, the assets are still held by the Custodian and the dollar value of every user’s account would be returned to them.”

Raiz Invest

Frequently asked questions

Answers to some of the most frequently asked questions about the Raiz Invest microinvesting app.

How much does Raiz Charge

Raiz charges a monthly account fee of $2.50 for balances up to $10,000, and for balances above $10,000 it is 0.275% per annum, charged monthly.

How much does Raiz cost

Raiz is free to download, sign up and create an account with. There is a small monthly fee.

How much does Raiz round up

Raiz rounds up to the nearest whole dollar. Your roundups are totalled, and when they reach $5 they are added to your Raiz Invest portfolio.

How much dividends does Raiz Pay

Raiz holds fractional ETFs which themselves pay dividends. Raiz collects these dividends on your behalf and automatically reinvests these into your Raiz investment account across your chosen portfolio.

How much to invest in Raiz

You can invest as much as you feel comfortable investing and are willing to lose. In order to balance cover out the cost of the $2.50 monthly account fee, I would suggest a target amount of at least $750 and an ongoing weekly contribution of at least $20.

Raiz how much can you make

With Raiz you are able to make a yield equal to the index you are investing in. If you split your portfolio into the four biggest index ETFs like I do, you should on average make 10% returns per year, less fees, costs and taxes. However past performance is no guarantee of future performance.

Raiz is a user-friendly, automated savings and investment tool which doesn’t seek to generate market-leading returns, though “the average Raiz customer has made 11% per annum since launch and 10.1% per annum in the last 12 months”.

Raiz Managing Director George Lucas

Is Raiz safe?

Yes, Raiz Invest is a fairly safe microinvesting tool to be using due to 256 bit SSL encryption and bank level security. It is however not CHESS sponsored and your investments are held in custodian structure which some may not like. Raiz holds an Australian Financial Services Licence, and is an ASX listed stock, making it subject to scrutiny and auditing from ASIC. Your funds are held by a third party custodian, and insured against fraud and criminal activity, such as cyber crime

Is the Raiz app Safe?

The Raiz app is safe to use. Raiz invest use the cloud to store information on a secure remote server with bank level security and data encryption. Nothing is stored on your phone meaning if it is stolen it is not an issue.

Can you lose money with Raiz?

Yes, your money is invested into real assets through Raiz Invest, meaning if the market drops then your raiz portfolio will drop accordingly. If you transfer money out of Raiz and sell these at a loss, you will lose money. However, in the long term market trends are always up.

What happens if Raiz goes out of business?

If Raiz invest goes out of business, your assets are still held by the custodian and you are entitled to be paid out the dollar value of these or have them transferred to another account. This may trigger a capital gains event and thus you could be liable to pay capital gains tax if your Raiz invest portfolio has increased in value

Is Raiz or Spaceship better?

Spaceship has much lower fees than Raiz making it the clear winner (currently .05% for portfolios over $5000 in Spaceship versus .275% for portfolios above $10,000 with Raiz). Spaceship also does not charge fees for balances below $5000. However! Raiz allows investors to build custom portfolios, as well as round up features – Spaceship does not currently offer these.

Do you Pay tax on Raiz?

Yes, you must pay tax on all realised capital gains in Raiz. Dividends are automatically reinvested into your Raiz portfolio, however you are still liable to pay tax on these dividends as income. You can get a comprehensive Raiz Invest Australia annual tax statement which can be used to file a tax return or provided to your accountant or financial advisor.

What is the best way to use Raiz?

The best way to use Raiz Invest is to select a portfolio based on your investing risk tolerance and time frame, set up a regular deposit, turn on round ups and then completely forget about the platform. If you are new to investing it can be tempting to check your profile several times per day, but this causes anxiety and increases the risk you will withdraw your money – adopt a long term mindset and all of the volatility will even out with long term growth

Is raiz a managed fund for tax purposes

Yes, Raiz invest is a managed investment scheme (ARSN 607 533 022 Raiz Invest Australia Fund) and you will receive a yearly statement of tax advice detailing how you need to report your taxable events.

How do I choose a Raiz portfolio?

You choose a Raiz portfolio based off your age, capital requirements and risk tolerance. If large gains and drops (volatility) makes you anxious, you may be a more conservative investor. For long term investors, the key to successful investing is selecting a high growth or high shares exposure portfolio, discipline and making regular contributions regardless of the markets performance.

What did Raiz used to be called?

Raiz used to be called Acorns. Acorns is an American investing company, and Acorns Australia was bought by an Australian company which rebranded to Raiz Invest Australia.

How does Raiz work?

Raiz works by tracking your credit cards, debit cards and bank accounts to round up purchases to the nearest dollar, and then contribute this rounded up figure into the Raiz Invest Australia Fund on your behalf. You can also make regular deposits into the fund. The Raiz Invest Australia Fund then invests this money, and you can select which portfolio you want exposure to. Raiz covers all aspects of investing, and automatically reinvests dividends on your behalf. The company itself makes money by netting a small difference in share prices, charging a management fee, displaying advertising and selling users aggregated purchasing data.

How do I cancel my Raiz account?

In the Raiz Invest app, from the Settings tab select Support and then Close account. Settings > Support > Close account. Follow the prompts. You can also close your account on the Raiz web client.

Is Raiz a broker?

No – Raiz is not a full service broker, it is a microinvesting platform and technically is a managed fund (Raiz Invest Australia Fund).

Is Raiz Halal?

No, Raiz is not Halal as they invest in non-shariah-compliant shares.

How long does Raiz take to deposit?

Raiz takes approximately 2 to 3 business days for deposits to be invested into your raiz account, and withdrawals can take up to 5 business days to be paid out.

What ETFs do Raiz invest in?

  • State street Global Advisors Australian ASX top 200 – ASX:STW
  • iShares Asia top 50 – ASX:IAA
  • iShares Europe to 350 – ASX:IEU
  • iShares USA top 500 – ASX:IVV
  • Russel Australian Responsible Investing ETF: ASX:RARI
  • Betashares Global Sustainable leaders: ASX:ETHI
  • iShares Australian government bonds: ASX:IAF
  • Russel Australian Corporate bonds: ASX:RCB
  • Betashares Australian money market (cash): ASX:AAA
  • Bitcoin crypto currency – NOT an ETF!

Is Raiz ethical?

Raiz has an ethical investing portfolio called the Emerald Portfolio which contains ethical investment assets. This contains the Russel Australian Responsible Investing ETF: ASX:RARI and the Betashares Global Sustainable leaders: ASX:ETHI

Are microinvesting apps worth it?

Yes microinvesting apps are worth trying if you are new to investing, or can’t afford to invest more than a few thousand dollars per year. As you learn and become more proficient at investing, there is a logical timeline when you will switch to a full service broker to hold the ETF or shares directly with lower fees.

What does the barefoot investor think of Raiz?

The Barefoot investor thinks Raiz invest is a great introduction to investing for notice investors.

I think it’s a great introduction for novice investors, which is why it’s been so successful. However, after a certain point the fees Raiz charges are too high for what amounts to a cute index fund app.

After all, I’ve always thought of Raiz (Acorns) as being a little like your first teenage love: Memorable, but you’re not going to stay with them long term.

Scott Pape, The Barefoot Investor

Tracking Raiz Invest performance and tax using Sharesight

sharesight
Sharesight is the best way to track your investment portfolio

Of course, no review would be complete without discussing the tax implications of Investing in Raiz. If you buy, hold or sell fractional ETFs on the Raiz platform you are going to eventually have to deal with tax – both Capital gains and dividend income. This is a huge pain in the behind, and why I outsource this crappy and time consuming job to Sharesight who automatically track all of my portfolio holdings, dividends, capital gains and tax liabilities.

Sharesight has the functionality now to track fractional shares of ETFs, which is a game changer for microinvesting platforms. Check out my detailed review of Sharesight and how it can save you time and money.

sharesight review
Sharesight can track fractional share investments on Raiz Invest

Conclusion – Is Raiz legit?

If you are just getting started on your journey to financial independence, then Microinvesting platforms like Raiz Invest are a good way to get started learning the ropes and ‘dipping a toe in the water’ without taking on any huge amounts of risk.

Remember though, with Raiz you are actually investing in underlying assets through their ETF offerings which are held under a custodian structure with InStreet. This means your investments are not legally held in your name, but you are the beneficiary. Your portfolio could go up or down in the short term – but in the long term should grow. Don’t expect miracles with Raiz, because ultimately you are going to be invested in some fairly diversified ‘blue chip’ index ETFs, and all of the investment choices carry with it some cash and fixed interest components which will lower total returns.

Finally, you should consider the fees and charges associated with investing through Raiz – generally speaking, investment portfolios below $500 or so might find most if not all of their investment returns gobbled up by fees, and portfolios, and portfolios in the thousands of dollars might be better off invested through a conventional broker where there are no ongoing management fees charged.

I will finish this review by quoting one of Australia’s leading financial commentators for his view on investing through the Raiz Invest app;

I think it’s a great introduction for novice investors, which is why it’s been so successful. However, after a certain point the fees Raiz charges are too high for what amounts to a cute index fund app.

After all, I’ve always thought of Raiz (Acorns) as being a little like your first teenage love: Memorable, but you’re not going to stay with them long term.

Scott Pape, The Barefoot Investor

Raiz Sign up code

If you want to earn $5 for signing up, feel free to use this Raiz sign up code: 35UTCH

Further reading

For more information on microinvesting, check out my full breakdown on the entire microinvesting topic here.

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One thought on “Raiz review Australia – is Raiz safe to invest with?

  1. Thanks for the informative review. I started using Raiz a few months ago. Not enjoying the $2.50 fee but I have made about $7 in returns in the past month on the Aggressive portfolio.. I’ll see how it goes over the next few months. I also have my ‘Big Girl’ account in Self Wealth but I contribute to that less often as it needs to be larger amounts. That was the motivation with putting tiny amounts in Raiz.. I’m happy so far I suppose..

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