InvestSmart Review; Is it really simple investing? (2024)

Take a deep dive into InvestSMART, an Aussie investment provider that is leading the way in hands-off, low-fee investments. Find out what InvestSMART has to offer by way of investment options, weigh the advantages and disadvantages of their Professionally Managed Account structure and determine if they are the right investment company for you and your financial objectives. Here’s my full InvestSmart review..

Verdict: The portfolio management through InvestSmart is convenient and diversified, but fees can impact returns and customisation can be limited. Talk to a financial advisor if you’re not sure if InvestSmart suits you or not.

In the world of investing, finding the right investment option and provider can be a daunting task, especially for those just getting started. That’s where InvestSMART comes in, offering an excellent range of investment solutions designed to take the guesswork and hassle out of investing, no matter your individual investing needs.

In this article, we introduce you to InvestSMART and provide insights into its fee structure, ownership, available investment portfolios, and much more. Whether you’re a seasoned investor or just starting, InvestSMART aims to break down the walls of investing through simple but effective management and easy-to-understand fees.

CaptainFI is not a Financial Advisor and the information below is factual review information, not financial advice. This website is reader-supported, which means wemay be paid by advertising on the site, or when you visit links to partner or featured sites. For more information please read myPrivacy Policy,Terms of Use, andFinancial Disclaimer.

What is InvestSMART?

InvestSMART is a financial services company that specialises in providing investment solutions to people who want a return on their hard-earned cash. They aim to simplify the investment process by offering a range of investment portfolios and professionally managed accounts to suit different risk appetites and investment goals.

Where are they based?

InvestSMART is based in Sydney, Australia and therefore they mainly cater to Aussie investors. They operate through an online platform including a website and an app, making it convenient for investors to access and manage their holdings from the comfort of their homes.

How does InvestSMART work?

InvestSMART works by allowing investors to create an account on their platform and choose from a selection of investment portfolios. Users can choose from a range of investment options, both single asset class and diversified, curated by InvestSMART’s team of experts and designed to align with different risk profiles and investment objectives. Once a choice of investment has been made, users must then open their Professionally Managed Account (PMA) and allocate funds to their chosen portfolio. InvestSMART then handles the day-to-day management of the investments within the portfolio.

Who owns InvestSMART?

InvestSMART is currently owned by Ron Hodge and Nigel Poole, who co-founded the company in 1999 as FloatNews. After renaming it to InvestSMART in 2001, they sold the business to Fairfax Media in 2007, but the pair took back ownership in 2013.

How much do they charge in fees?

To discuss how much InvestSMART charges in fees, it is essential to first understand the fee structure of managed investments. When you purchase an investment under a PMA, you will be exposed to three main types of fees:

A management fee is charged by the company that manages your investment, in this case, InvestSMART, as a way for them to cover the expenses associated with doing so, the largest of which is the salaries of the investment managers. InvestSMART pioneered capped management fees in Australia, and their current rates are 0.55% p.a. for investment amounts up to $100,000 and a flat rate of $550 p.a. thereafter. For example, an investment of $10,000 will incur a fee of $55 per year, while an investment of $500,000 will only incur a fee of $550.

Brokerage fees are charged when you buy or sell an investment. They are essentially a commission for the company’s services in facilitating, or brokering, the sale. Think of it like a real estate agent, who takes a commission when they successfully pair a vendor and a buyer. InvestSMART’s brokerage fees are $4.40 per trade or 0.088% of the trade’s value, whichever is higher. Do the math, and this works out to be a flat rate of $4.40 up to and including $5,000, and 0.088% thereafter.

Indirect costs are charged by the company that owns the ETF (InvestSMART uses third-party Exchange Traded Funds) and these costs range from 0.09% to 0.3% annually.

Is InvestSMART a managed fund?

InvestSMART investors have what is known as a Professionally Managed Account (PMA). While similar to a managed fund, PMAs leave the investor with full beneficial ownership of their investments, but with the day-to-day running of the investment account still being managed by a professional. This affords investors the luxury of not needing to choose between managing their own investment with their limited investing knowledge (potentially resulting in diminished returns) and having a professional manage their assets in a pool with other investors’ assets (taking away beneficial ownership) and potentially taking a substantial fee, eating away at any profits.

“At the heart of everything we do, our purpose is to make investing rewarding, accessible and affordable by employing smart technology and even smarter people.”

investsmart.com.au/who-we-are

What investment portfolios can you choose from?

InvestSMART offers a diverse range of investment portfolios to cater to individual risk profiles and investment preferences. These portfolios span various asset classes, including Australian and international shares, fixed income (bonds), managed funds, property and cash.

InvestSMART has 5 diversified portfolio options: conservative, balanced, growth, high growth and ethical growth. For those seeking a single-asset class portfolio, there are another 5 options: Australian equities, international equities, property & infrastructure, investment income and hybrid income.

These portfolios are regularly reviewed and rebalanced by InvestSMART’s team to ensure they remain aligned with their stated investment objectives. Learn more about each InvestSmart portfolio here.

What types of investment accounts are available?

InvestSMART offers various types of investment accounts, including the basic individual account. If it’s just you and your money, then this is the account for you. If you and your partner have joint finances and feel that investing should be no different, then perhaps InvestSMART’s joint account is for you. Maybe, though, you and your partner are already financially set (congratulations!) and are now looking to give your children a headstart. InvestSMART has your kids covered, too, with their “Trustee for Child” accounts.

Additionally, for the more financially savvy among us, InvestSMART provides individual and corporate Self-Managed Super Fund (SMSF) accounts. Through this plethora of account types, InvestSMART allows investors to choose the account structure that best assists them in achieving their financial goals. Ensure you do your due diligence and consult a financial advisor for personal advice before purchasing any type of investment.

Advantages of using InvestSMART

InvestSMART is a great Aussie investing company whose users enjoy countless benefits:

• Professional Portfolio Management: InvestSMART’s team of experienced investment professionals actively manage investment portfolios, saving investors from the guesswork of making complex investment decisions.
• Transparency: Through the PMA structure, investors have transparency into, and retain full beneficial ownership of, the underlying holdings within their portfolios, promoting greater visibility and understanding of their investments.
• Diversification: The range of diversified investment portfolios offered by InvestSMART allows investors to broaden their investing horizons and reduce overall investment risk.
• Convenience: InvestSMART’s online platform enables investors to easily access and manage their investments at any time, providing flexibility.
• Accessibility: InvestSMART caters to a wide range of investors, making investment solutions accessible to both investing veterans and those new to the investing world.

“We recognise over the long-term, no one asset class is guaranteed to deliver consistent returns. We believe you should invest across all asset classes in different proportions to manage risk and achieve your financial goals.”

investsmart.com.au/who-we-are

Disadvantages of using InvestSMART

A low-fee, set-and-forget investment provider is excellent, but like every business, InvestSMART has both benefits and potential downsides:

• Fees: Like any investment provider, InvestSMART charges management fees, which can impact investment returns. Investors should carefully consider the costs versus the potential benefits and weigh these fees against those charged by other investment providers.
• Limited Customisation: Due to the professionally managed nature of InvestSMART portfolios, the level of customisation available to individual investors may be limited compared to that of directly managed investments.
• Market Risks: All investments carry inherent market risks, and InvestSMART’s portfolios are no exception. Investors should know that their investment performance is subject to market fluctuations and potential losses.

FAQs about InvestSMART:

Investing is a complicated topic, and most people have lots of questions that they would to have answered by someone in the know. Below are some answers to FAQs about InvestSMART:

Can you customise your portfolio?

While investors enjoy the freedom to choose from a range of pre-defined investment portfolios and select the one that best aligns with their risk profile and investment goals, beyond this, the level of customisation available is next to none, as this is taken care of by investment professionals at the company.

Does the InvestSMART website have tools and resources?

The InvestSMART website provides an abundance of tools and resources to assist investors in effectively managing their investments. These are subdivided into 3 sections: “Compare and Save,” filter tools and calculators. The website also dedicates an entire section to insights, keeping investors in the loop about important news and market updates that could affect their investments.

You can access the InvestSmart FSG (Financial services guide) on their website too.

Is there an App?

Yes, InvestSmart offers a mobile app that helps investors access and manage their investments on the move. The app provides a user-friendly interface for monitoring investment portfolio performance, making investment decisions, and staying informed about market developments. Essentially, the app does most of the same things as the website, but from the convenience of your smartphone!

Conclusion – Is InvestSMART really worth it?

With a diverse selection of investment portfolios, convenient online access, and a transparent PMA structure, InvestSMART strives to simplify the investment process, for all investors. While it provides benefits such as professional management, diversification, and accessibility, investors should also consider the associated fees and potential limitations, including minimal customisation. Ultimately, there is only one person who can decide if InvestSMART is worth it for you: you! Oh, and maybe your financial advisor. So, what are you waiting for? Give them a call, do some research and get started on your journey to financial independence and freedom.