This article is brought to you by Six Park, a partner of Savings Guide. This Six Park review is my own.
Before we get started.
If you like what you see in the review below, Six Park is offering Savings Guide readers three months of free investment management. Learn more here.
Ten years ago, financial advice was predominantly for those with a higher net worth. The fees, charges and perceived value of financial advice were not geared towards everyday investors. Some financial advisors would require a minimum of $50,000 to $100,000 to invest in order to work with you. The barrier to entry for financial advice was effectively set way too high.
Six Park is an investment platform looking to solve this. Six Park’s mission is to reduce the barrier to entry for those wanting to receive personalised, professional financial advice and management. Six Park do this by delivering automated investment management online, lovingly called ‘robo-advice’.
How does Six Park work?
Six Park delivers you ‘robo-advice’ – effectively, it provides highly automated investment advice and management that is personalised to your circumstances, overseen by experts and delivered online.
Six Park asks you a series of questions to find out your investment time frame, your risk profile and appetite, and your experience as an investor. Based on your answers, Six Park’s algorithms then recommend an investment strategy and, if you accept it, Six Park will invest your money according to the recommendation.
Six Park will create an account for you, on their platform, with their broker and with Macquarie Bank. This will enable you to deposit funds into a Macquarie Bank Cash Management account, ready and waiting for when you hit the minimum investment amount of $10,000. Upon hitting the $10K mark, your money will be invested in a portfolio of exchange-traded funds (ETFs) that reflects your accepted investment strategy.
Features of Six Park
Some of the core features of using Six Park for your investment strategy include:
Six Park utilises a passive investment strategy. Six Park are not trying to pick individual stocks and beat market returns; they are investing for the long run, in low-cost ETFs that focus on broad diversification. Warren Buffett has famously called this type of strategy the ‘smartest way to invest’.
Six Park has a team of investment professionals behind them. Robo-advice helps define your personal investment drivers, and your appetite and capacity for risk with rapid ease; it doesn’t mean there aren’t real people guiding your portfolio though. Six Park has a solid panel of experts that guide and direct how the investments should be made.
Assets are held in your name. This means your shares in ETFs, as well as your cash management account, remain in your own personal name rather than being pooled with other people’s investments. So, if Six Park stopped operating, your money and investments would still be accessible.
It costs less than using a financial advisor. Six Park have removed a heap of overheads that have plagued the financial planning industry. They instead have a swish platform that makes it fast, efficient and inexpensive for people to get personalised financial advice. They charge a very small management fee on the money you have invested with them (fees can be seen below).
Six Park customer support is based in Australia. This means the phones are answered by real everyday Australians who understand your situation. There is phone, email and live chat support available at all times of the day. To me, this is really important; if I am investing large amounts of my money, I want to know I can speak to someone.
Six Park does not pay or receive commissions from any financial providers. The advice you receive is transparent, and you have access to portfolio reporting 24/7 that shows your overall returns as well as performance for each asset class.
How does Six Park invest your money?
Six Park invest your money in exchange-traded funds (ETFs).
What is an ETF?
In simple terms, ETFs are similar to a managed fund that buys investments in particular asset classes. An ETF is essentially a holding device for shares in individual companies. An ETF that owns international shares does just that: owns a portfolio that invests in actual international companies.
ETFs are listed on the ASX or other international markets for investors to buy. The reason ETFs are so popular is that you can quickly obtain strong diversification into multiple industries and countries, normally for a far lower fee than a traditional managed fund.
What types of assets does Six Park invest in, within the ETFs they select?
- Australian shares
- International Stocks
- Listed international property
- High yield cash assets
- Australian fixed income and bonds
- Listed international infrastructure
- Emerging share markets
What investment portfolios does Six Park have on offer?
Conservative portfolio: The Six Park conservative portfolio invests your money as follows; 82.5% defensive assets and 17.5% growth assets. This is considered a lower risk investment and is trying to protect your money while getting a ‘little’ growth where possible.
Conservative balanced portfolio: The Six Park conservative balanced portfolio invests your money as follows; 62.5% defensive assets and 37.5% growth assets. This is considered a low to medium risk investment that is giving people a little more exposure to growing their money.
Balanced portfolio: The Six Park balanced portfolio invests your money as follows; 40% defensive assets and 60% in growth assets. This is considered a medium risk investment and is giving investors a slight bias towards growth assets while protecting a large portion of their existing money.
Balanced growth portfolio: The Six Park balanced growth portfolio invests your money as follows; 22.5% defensive assets and 77.5% in growth assets. This is considered a higher risk investment, as for the first time you have over three-quarters of your money in growth-focused assets.
Aggressive growth portfolio: The Six Park aggressive growth portfolio invests your money as follows; 15% defensive assets and 85% in growth assets. This is the highest risk investment that Six Park offers and is likely preferable for those who have a longer-term outlook on their investment strategy. Portfolios that focus on growth can see more day to day volatility in my experience.
Six Park fees and pricing
Six Park have three tiers of pricing (also known as fees) for different account sizes. These fees cover the services they offer you; that being advice and the ongoing management of your investment.
- 0.5% per annum, for balances between $10,000 – $199,999
- 0.4% per annum, for balances between $200,000 – $499,999
- 0.3% per annum, for balances over $500,000
These fees cover everything Six Park offers you; including all trades, rebalancing, reporting and expert oversight. There are no hidden fees, no entry or exit fees, and no charges for depositing or withdrawing money.
Other fees not charged by Six Park, but instead charged by the ETFs they invest in
Each of the ETF issuers charges an indirect fee. This is usually between 0.10% and 0.25% but can vary. These fees are included in the price of your ETF units and are not for Six Park – they are deducted from the returns you get from within the ETF itself.
How to set up a Six Park account
To set up a Six Park account, you will need to set aside roughly 15 minutes. The set-up is broken down into three easy steps:
Step 1: Tell Six Park about your personal situation
In this step, you will answer a range of questions that help Six Park understand your appetite and capacity for risk, and how long you plan to invest. While completing this step you will outline how much you have to invest, your age, your personal situation and more.
Step 2: Review your investment strategy and see your recommendation based on your answers
Here you will get to see the investment strategy that Six Park proposes for you. It will be a strategy based upon the answers you’ve provided in step 1. It will suggest which ETF portfolio mix is best for your situation and outline the reasons why. Prior to seeing this investment strategy, you will be asked to accept a ‘statement of advice’ or SOA, which is the legal document required to be confirmed before the advice is provided. This happens in the face-to-face world with financial planners and financial advisors also.
Step 3: Proceed to set up the required accounts
Here you finalise your account with Six Park. This allows Six Park to create your brokerage account with Open Markets, the broker Six Park uses to buy and sell your desired ETFs, and your cash management account with Macquarie Bank, where your funds will sit until they are ready to invest into the ETFs. All of this account set-up happens online, making it quick and easy for you to complete.
Six Park review
Robo-advice, in general, is something that fascinates me. I feel that the perceived value of financial advice has taken a real nose dive since 2008 (when the global financial crisis officially began) and feel that platforms such as Six Park can be a great way for everyday Aussies to start dabbling in financial advice again, albeit without the large fees, trailing commissions and conflicted agendas of yesteryear.
Things I really like about Six Park:
- Backed by a team of financial experts.
- Australian company with good customer service.
- Cool ‘My Account’ that showcases your investments and tracks them.
- A passive investing model that uses ETFs, just like Warren Buffett suggests.
- Low fees for personalised financial advice.
- Great tips and tricks sent via email each week.
Things that could be done slightly better:
- I would like the minimum to invest to be set at $5,000 to give more people a chance to play.
- I think there is a need to better explain that ‘Open Markets’ will send you a letter after opening your brokerage account; I received a letter and was confused who this was, though it was simply the brokerage element of Six Park.
Overall, I really like Six Park. The set-up process was easy and I love the fact that Six Park is an Australian start-up that is changing the way people receive financial advice.