Stockspot review from an experienced and long term investor on the path to Financial Independence. Is this Robo advisor safe to trust with your money, and can it actually help you invest?
Stockspot is an Roboadvisor based in Sydney, Australia. Stockspot learns about your personal situation and investing preferences, and then uses this to assign you a custom investment portfolio built using Exchange Traded Funds with exposure to Stocks, Bonds and Gold. So is it worth it?
- Only need $2000 to open an account
- Incredibly simple to use
- Personalised portfolios based on your preferences
- Fully automated rebalancing
- Portfolio themes allow you to focus on certain asset classes
- Assets are held on your CHESS sponsored HIN
- Higher fees than if you just buy the ETFs yourself
- $5.5 monthly fee erodes returns of low fund balances – on a $2000 balance these fees work out to be 33% of your total return!
- Fees erode future growth – you miss out on compounding
- Fees quoted do not include the additional underlying management fees of the individual ETFs used in the portfolio construction
Verdict: Stockspot is an easy way to automate your investing, but you will pay slightly more for the convenience.
Through Stockspot, assets are held in your name, under your HIN and are fully CHESS sponsored. Stockspot has a focus on broad diversification, automation and on keeping fees low – which lets the boring investing tick away in the background building wealth while you get on with your life
“We’re trusted by thousands of clients to manage hundreds of millions of dollars. That’s because we always act in our clients’ best interest, and we’re completely independent from the funds we recommend.”Chris Brycki, Founder and CEO Stockspot
This article will provide a brief introduction to roboadvisors, cover how Stockspot could be used on the path to Financial Independence, and explore my experience using Stockspot.
Introduction to Stockspot
Stockspot is a Roboadvisor which asks questions to learn about you and your investing preferences. Based on your risk tolerance and investing time-frame, Stockspot will assign you to one of ten different investment portfolios which are invested across Shares, Bonds and Gold. Stockspot then automatically manages your portfolio
“Good advice can add around 3% per year in better performance. This extra return comes from selecting the best low-cost products, Maintaining a suitable investment mix for your situation and investing goals, Helping you avoid costly investment mistakes with behavioural coaching, and automatic rebalancing so your portfolio remains healthy.”Chris Brycki, Founder and CEO Stockspot
Stockspot targets a combination of capital growth, dividends and inflation hedges from both aggressive and defensive assets depending on particular investors risk return preference. The Stockspot AI automates boring investing tasks such as dividend reinvesting and portfolio rebalancing, using low cost ETFs in order to maximise performance and keep costs low.
They have a focus on keeping costs low, because their motto is;
‘Every dollar that you save on fees is an extra dollar added to your returns’Chris Brycki, Founder and CEO Stockspot
Stockspot is regularly audited and reviewed, and you can log in to the member investor centre as it is all cloud based, meaning you can see your portfolio and returns online at any time.
How Stockspot works
Stockspot have ten different investment portfolios depending on risk tolerance and investment timeframe. Generally, the longer the investment timeframe the higher the tolerable or acceptable level of risk. These range from Amethyst (conservative) through to Topaz (high growth), with an option for the standard portfolio or the ethically focused portfolio.
Stockspot Investment portfolios
The five base investment portfolios are
- Topaz: High growth
- Emerald: Growth
- Turquoise: Balanced
- Sapphire: Moderately conservative
- Amethyst: Conservative
With a choice of further opting for a ethically focused version of each of these base five investment portfolios
Stockspot Investment asset classes
These portfolios are constructed using ETFs from the following asset classes;
- Australian shares: The top 300 listed companies on the ASX including Telstra and BHP.
- International shares: Some of the largest global companies such as Apple, Toyota, and GE.
- Emerging markets: Companies from BRICS economies (Brazil, Russia, India, China, South Africa).
- Bonds: Government bonds, these are very low risk and provide reliable fixed interest returns.
- Gold: Protection against inflation and market volatility.
Stockspot investment themes
Once you have your base portfolio, you can further diversify your portfolio with Stockspot investment themes. These mirror the main asset classes, with the inclusion of property – allowing you to concentrate your portfolio on a favourite asset class.
Stockspot only offers themes to investors on the Gold, Platinum and Diamond membership tiers. By selecting a theme, investors can weight their portfolios more heavily toward this asset class, ranging from 5% to 10% of your overall portfolio depending on your investment preferences.
Investors can select up to 3 themes from the following;
Stockspot Total market ETF themes
- US shares
- Global ex-US shares
- European Shaes
- Japanese shares
- Chinese shares
- Asian bluechip shares (large companies)
Stockspot Active stock picking ETF themes
- US Technology
- Asia Technology
- Consumer Staple
- Gold Minders
Stockspot Australian ETF themes
- Australian Dividend shares
- Australian Bluechip shares (large companies)
- Australian emerging markets (small companies)
- Australian socially responsible companies (ethical companies)
Stockspot property ETF themes
- Australian property
- Global property
- Global Infrastructure
Stockspot defensive ETF themes
- Defensive: High interest cash (fixed interest)
- Defensive: Australian corporate bonds
- Defensive: Australian inflation bonds
- Defensive: Global bonds
Is Stockspot CHESS sponsored?
Yes, Stockspot uses CHESS sponsorship for your holdings. Your investments are purchased via ETFs listed on the Australian Securities Exchange, which are allocated to your personal Holder Identification Number (HIN) and not held on custodian arrangement.
For more information on CHESS sponsorship vs custodian arrangements, check out this 5 minute video from the ABC about who owns your shares
Stockspot review: Fees
Stockspot charge fees on a sliding scale depending on your membership tier, which in turn depends on the value of your Stockspot investments. Basically, the more you have invested with stockspot, the cheaper the management fee becomes. These fees do not include the management fees of the underlying ETFs, which get automatically deducted from those ETFs returns, so its worth looking closely into those.
|Amount Invested||Membership Tier||Fee|
|Under $10,000||Bronze||$5.5 per month|
|$10,001 – $50,000||Silver||0.66% Per annum|
|$50,001 – $200,000||Gold||0.66% Per annum|
|$200,001 – $2,000,000||Platinum||0.528% Per annum|
|Over $2 Million||Diamond||0.396% Per annum|
Kids can also invest for free, provided they are under 18 years of age and have a balance under $10,000.
How to join Stockspot
You can join Stockspot by heading to their website and clicking the ‘Get Started’ button on the top right hand side. Follow the prompts to create your account.
Stockspot review: Account types
Stockspot allow you to invest in pretty much any way you need to. You can create accounts for the following profiles;
- Self Managed Super Fund
- Company Structure
- Trust Structure
Stockspot review: Sign up quiz
This is the Quiz that Stockspot gave me when I signed up, along with the answers that I gave
Captain FI’s Stockspot experience.
I started with a small investment in Stockspot – the minimum $2,000 balance. This performed in line with index performance and generally I was pretty happy with how it ran. Because of the ‘phased in’ approach it left me with pretty much just a 50/50 split of Australian shares (VAS) and Bonds and Cash (iShares Composite Bond ETF) which I felt was a little awkward at first.
After meeting with the team at Stockspot and having a good chat to Marc and Chris about the underlying investments, they made me feel more comfortable about it all – including the use of defensive assets. I then invested another $8,000 to meet the $10,000 ‘Fully phased in’ minimum.
At $10,000, the investment strategy is ‘fully diversified’ across Australian, Global, Emerging Markets, Bonds, Cash and Gold (although they told me they will be looking to fix this soon so that even people buying in with the minimum balance can expect to be fully diversified from day 1 soon).
My plan was to monitor the performance of my Stockspot holdings and see how they perform against my other investments over time – the idea being if they outperform my ETFs, then it kind of makes sense to invest more in Stockspot – especially since it is all automated and done for me. I actually contributed $20,000 all up over the past few years, but recently withdrew my entire balance (which was approx $20,300) because I am going to be refinancing my investment property shortly and needed access to some funds to keep the bank happy.
All in all, it was a bit of an unceremonious end to the trial but I needed to access the equity for my own cash flow management purposes. I was also a bit concerned regarding the fees I was charged, between the underlying ETF fees and the additional.66% fee charged by Stockspot it was getting around close to that undesirable 1% figure – a fee which can cost you a third of your nest egg and up to half of your passive income in retirement according to this article on Passive Investing Australia.
Frequently asked questions about Stockspot
Answers to some of the most frequently asked questions about Stockspot, some of which has been provided by Stockspots media team.
How to use stockspot themes
Stockspot offer themes to investors on the Gold, Platinum and Diamond membership tiers. By selecting a theme, investors can weight their portfolios more heavily toward this asset class, ranging from 5% to 10% of your overall portfolio depending on your investment preferences. Investors can select up to 3 themes.
Stockspot customer support
Stockspot answers both phone and email, and I think has pretty awesome customer service. I spoke with them at length before revealing my intentions to review the platform, and I was definitely happy with what I saw.
They are active on social media, and will generally reply bloody quickly if you tag them in anything, indicating their customer support and social media department is quite well staffed and active.
How Safe is Stockspot?
Stockspot use bank level 256-bit SSL/TSL certificate encryption, and your investments are held under your own HIN (thats the important bit for CHESS sponsorship). If Stockspot go bust, because you own all your shares you can then theoretically just yoink them over to any other broker of your choosing.
Stockspot also guarantee that they never sell or share your information with third parties or advertisers, and have a corporate culture of privacy and responsibility.
What is the minimum amount to invest through stockspot
The minimum amount to open a stockspot investing account is $2000.
Does Stockspot have an app
Yes Stockspot has an app for both iOS and android users. Launched in 2018, the Stockspot portfolio app gives investors a quick snapshot of how their portfolio is performing and shows upcoming events such as dividends and reinvestments.
How does Stockspot work?
Stockspot surveys you with a number of detailed questionnaires. Based on your response the AI assesses your investment timeframe and risk tolerance. The AI then assigns a portfolio to you based on what is most appropriate for your investment preferences.
Why invest in stockspot?
Stockspot suits a passive investor who would benefit from outsourcing all of their investing activities. This reduces your stress, anxiety and maximises your returns. Stockspot have a focus on keeping fees low, and are a much cheaper option than a conventional active fund manager.
How good is Stockspot
Stockspot is pretty good. I rate them an 8/10. The only way they could be better? Allow more aggressive investing options, and lower their fees.
Feedback from Stockspot
After I reached out to Stockspot, they wanted to offer a few more closing points to help answer any questions you might have about how stockspot works.
Asset allocation in Stockspot
Stockspot’s high growth portfolio has outperformed the ASX 300 (i.e. 100% shares) over 1, 3, and 5 years even though it had a 20-30% allocation to defensive assets. It is a common myth that owning some defensive assets detract from performance.
Gold has been one of the best performing asset classes in the last few years and it will continue to be important for growth-focused investors given it acts like a zero-coupon inflation protected bond.
This provides investors with defensiveness against inflation and an expansion in the monetary base. The implications of the RBA’s recent yield curve control makes gold an even more important asset for all portfolios (including high growth/FIRE investors)
Performance of Stockspot
We pick the best low fee ETFs through our independent ETF research (we don’t take commissions from the providers) and continue to review the investment choices to ensure they give the best possible return and diversification.
Our strategic asset allocation, selection of ETFs and rebalancing helped our portfolios outperform 100% of similar funds in the last 5 years.
No Stockspot fees for kids account (up to $10,000) or until they turn 18. Anyone that invests less than $10,000, the first 6 months is free.
This was designed to give beginner investors a chance to grow their portfolios to the recommended $10,000 level. We encourage all clients to reach this level within 6 months so that the management fees don’t erode their returns.
On average, most clients are paying for 0.66% or less to us. This fee includes all brokerage, rebalancing and tax reporting.
If someone DIY invests via a stockbroker they don’t usually get the benefit of expert ETF selection, auto rebalancing, and top-ups – which suit people who want to be more hands-off.
Auto rebalancing that we did in March 2020 added between 1% and 1.9% in extra returns for our clients.
Stockspot is an Roboadvisor based in Sydney, Australia. Stockspot learns about your personal situation and investing preferences from a questionaire, and then uses this to assign you a custom portfolio built using Exchange Traded Funds with exposure to Stocks, Bonds and Gold. Assets are held in your name, under your HIN and are fully CHESS sponsored. Stockspot has a focus on broad diversification, automation and on keeping fees low – although there are fees and you need to carefully consider them as they do add up and will erode your performance over time – its worth comparing a few alternatives including what it might cost you in brokerage if you DIY.
The portfolios range in risk tolerance but even their most ‘high growth’ option the Topaz portfolio, has 22% in defensive assets. If you are the kind of investor that just ‘wants it taken care of‘ and could not think of anything worse than dealing with investing yourself, or perhaps investing makes you extremely anxious – then Stockspot could be a good option if you wanted to use a RoboAdvisor – I had a positive experience with Stockspot but no longer use them.
Having said that – if we are dealing with significant sums of money and you enjoy investing and creating your own portfolios, then you may simply be better off in terms of total fees to go build a portfolio through an online such as Pearler. If in doubt, you should seek financial advice from a qualified, independent financial advisor, and read as much information as possible to educate yourself.
Financial Disclaimer: CaptainFI is NOT a financial advisor and does not hold an AFSL. This is not financial Advice!
I am not a financial adviser and I do not hold an Australian Financial Services Licence (AFSL). In this article, I am giving you factual, balanced information without judgment or bias, to the best of my ability. I am not giving you any general or personal financial advice about what you should do with your investments. Just because I do something with my money (or use a particular service or platform) doesn’t mean it is automatically appropriate for your personal circumstances. I do not recommend nor endorse any financial or investment product, and my usage or opinion of any product should not be interpreted as an endorsement, advertisement, or intent to influence.
I can only provide factual information based on my journey to Financial Independence, and that is provided for general informational and entertainment purposes only. I make no guarantee about the performance of any product, and although I strive to keep the information accurate and updated as it changes, I make no guarantee about the correctness of reviews or information posted.
Remember – you always need to do your own independent research and due diligence before making any transaction. This includes reading and analysing Product Disclosure Statements, Terms and Conditions, Service Arrangement and Fee Structures. It is always smart to compare products and discuss them, but ultimately you need to take responsibility for your use of any particular product and make sure it suits your personal circumstances. If you need help and would like to obtain personal financial advice about which investment options or platforms may be right for you, please talk to a licensed financial adviser or AFSL holder – you can take the first steps to find a financial advisor by reading this interview, or by visiting the ASIC financial adviser register and searching in your area.