Shares / Micro Investing - Raiz, Spaceship, Vanguard etc

Hi,

Just looking for some general advice from people who may have used these apps and platforms for investing purposes. I'm just starting out in the world of investing - looking to purchase my IP this year with a separate goal for that however i wish to also dabble in the shares world or at least start learning the ins and outs. I don't think i wish to trade as i have a 10 month old and returning back to work full time soon. I think i would for now like a transfer and forget strategy until i have the time to actually focus and figure out what is performing best.

Correct me if i am wrong...

Apps like Raiz and Spaceship are pretty simple micro investing apps that are more suited to people starting out. They allow low value deposits but from what i can see their fees are actually pretty high if you work them out as a percentage of the $ you end up putting in on a regular basis.

Raiz is $3.50 per month for balances under $15k after which it jumps to 0.275% p.a and Spaceship is $2.50 per month with no extra fees. You have no choice in where your money essentially gets invested in. Seems that Spaceship, fees wise, is cheaper though.

Commsec is slightly more complicated and you need to know where you would like your funds to be invested as they have 7 themed investment options however Vanguard has been left off. This is not good for small amounts as you pay a brokerage fee of $2 per $1000 transaction and anything over that is 0.2%.

Vanguard has a $500 initial deposit with $500 each deposit thereafter with $9 per trade at the time of buy or sell so i assume that it is $9 for each $500 transaction if you choose to say only deposit the $500 increments? So from what i can see here, it is best to deposit less frequently and larger amounts? Sort of like CommSec.

Now i'm a bit confused about the annual fee and/or portfolio management fees. It states that the
annual fee depends on which portfolio you choose i.e VAS is 0.1%, VGS is 0.18% and VDHG is 0.27% (Products) however it also states here: https://www.vanguard.com.au/personal/en/our-fees, that there is a 0.27% investment management fee yet this website here CommSec Pocket vs Raiz vs Spaceship Voyager - Which is Better in 2020? (Review for Beginners) – WalletLab quotes that the "Vanguard Pocket is charging 0.2% p.a" but i can't find this quoted anywhere on the official website. Am I missing something? What are the additional fees?

Stockspot
$5.50 per month for balances under 10K after which it switches to 0.66% per year. Seems really expensive. Why are they so expensive? What benefits do they have over the other platforms?

Selfwealth has flat fee $9.50 per trade with no portfolio fees or min deposit amounts. Min trade is $500. Seems this one is the better one out of the three in terms of cost? But some websites state there is a FX fee on Deposit and Withdrawal of 0.6% which mind you CommSec has as well and some website state there are no additional fees. Does anyone know? I assume this does not apply to me anyway as i am not trading and only investing in ETF's?

Stake seems to be where you buy US shares with $0 brokerage but i think that is only for US where it is $3 for AU? 70 bps for deposits and withdrawals which is essentially US$0.70 per AU$100 transferred in or out. They also have withdrawal fees of $2 and wire transfer fee of $5 and the min deposit is $50 and min trade is $50. But again i am only investing in ETF's so some of these fees won't apply to me, is this correct?

My thinking is i start off with Spaceship and build the balance to say $5k, then transfer to possibly Selfwealth or split into Stake and try the US market. Thoughts?

Wanting to also invest cash my son receives from Xmas / Birthday presents. It will be in my name though so which one would be better for that? What are the tax implications of these apps / platforms? Do you pay CGT on the additional amount you make in the year or is it only when you "withdraw" the money into your account?

Thanks a bunch

 

CMC now has free buy orders for trades upto $1000.

If I were you you I would just buy an ETF such as VAS or VHDG through CMC Markets frequently enough to stay under $1k per trade and call it a day.

 

CMC Markets allow one trade per day, up to the value of $1000, with zero brokerage. You can buy any listed stock/LIC/ETF so that might be an avenue for "micro-investing" worth exploring.

 

Some of these low / no fee brokers mean you dont have any ownership and title. If I buy something I would like to know I actually own it. Not a entitlement or a maybe.

 

In what instances or at least how do you ensure that you own what you buy? Through which platforms if it’s not through the above mentioned ones?

 

I don't know about platforms but I believe the reference is to receiving one of these as proof the holding is in your name and you wholly and solely own the shares or ETF units.

https://asxonline.com/content/dam/a...settlement-procedure-guidelines/asx015440.pdf

 

Yes @geoffw. As you know I am old school and, like a lot of stodgy investors, want my purchases to be held in my name against my Holder Identification Number and in no way associated with anyone else.

I get the lesser price of brokerage for many but for me that's not a consideration - although with the arrangements I have brokerage isn't large. Proof of ownership is.

 

I think we are saying the same thing but in a different manner.

 

So I asked Spaceship about this and this was their response:

We actually hold the underlying shares that the unit price reflects. Thats why if you head to portfolio you can see the target allocation. Each portfolio actually buys, sells and holds the shares shown.

This still means I don’t specifically own the shares?
Correct I won’t have $5000 initially to invest for my son but eventually I will have it built up to that as we have started to also contribute a small amount each week to the portfolio. I take it that it is best to wait for it to get to that balance or even $1000 and move it into the likes of CMC markets or Self Wealth since then we actually own the shares?

 

Correct... Think of it this way.some cheap brokers hold ALL investors in one HIN and their internal accounting recognises each individual interest. Or a custodian. If its not legally onwed & they went belly up it could be difficult for a liquidator to determine who gets what if the two numbers dont match. That occured witha few broker collapses (Opes Prime ?) Now lets assume someone internally has misappropiated holdings. There may be nothing or less. But in theory each investor should get their part. Well at least its value. Perhaps.

Compare this to someone who pays a little more for broker sponsored chess holdings. They hold legal title at all times. Broker can go under and it poses no concern. Another broker can assume the holding and promptly transact.

Theft of title occurs in loads of industries incl where wealth is evident. Crypto, shares, art, etc. Usually by taking title or exposing it to risk.

I wonder how many people would take a cut to a mortgage rate to have a lender that wants all land title in their name ? Nobody.

 

A better way to master investing - Tiger Brokers

Heard about this one yesterday