My own review and journey with ACORNS
Mindset:
- to be able to save and invest into a diversified portfolios of ETFs with less requirements, with as little as $5 and less clicks from your mobile devices.
Requirements in account opening:
- funding account (BSB and account number or user login)
- spending account (optional only if you want to have the Roundups function for 'spare change' feature)
- setting of a profile
Personal profile
- full name
- address
- mobile number
- PIN
- Password
- TFN (Can be supplied at a later date)
Financial profile (this will enable the app to choose the portfolio that is suitable for you)
- employer
- type of work (full-time or whatever)
- approximate net wealth
- investment time horizon
- yearly income
I was able to open an account in less than 10min without providing documents. I made an initial contribution of at least $5.00 and have chosen 'moderately aggressive' portfolio (I can change this anytime as there are no switching fee)
They confirmed my account creation later on via email.
What I made as my initial funding account was my CBA account and using my user credentials such as login name and password.
I also setup initially as my spending account the same CBA account but this time, since I have several accounts, I chose my credit card.
Later on, out of curiosity, I tried to change my funding account to my Ubank Debit account (not the savers account) and have used the BSB and account number and not the Debit Card number. I decided to use this account since it has the 'sweep' mechanism where it will pull funds from the linked Usaver account. Also, for those that are familiar with UBank, even if overnight sweep is disabled (objective is to not maintain any amount in the Debit Account to maximise the interest on the Usaver account), the amount should be automatically debited from the linked Usaver account.
For the first 2 weeks, I tried and have successfully done the 3 different methods to fund my account:
- Made credit card transactions and set up automatic roundups
- Lumpsum deposits
- Recurring deposits (Acorns have daily, weekly and monthly)
In addition, reading further about the PDS, below are the features and benefits.
The significant features of the Acorns Grow Australia Fund are:
- Micro investing
Acorns is a micro-investing product designed to make investing and saving simple. Acorns is offered through a mobile or web-based App and you can apply for an Acorns Investment Account with just $5.00.
- Investment Portfolios
You can choose a Portfolio into which your Acorns Investment Account will be invested. The Portfolios have been constructed by a team of financial industry experts, and a Nobel prize-winning economist. Each Portfolio is comprised of ETFs that are quoted on the ASX.
- Interests in a Managed Investment Scheme
Your Acorns Investment Account is an interest in a registered managed investment scheme, being the Acorns Grow Australia Fund
- Fractional investing
One of the key features of Acorns is the ability to allocate fractional interests in ETF Units to individual Investors. The Acorns system will facilitate the purchase of the relevant number of ETF Units required across the Fund, and allocate fractional interests in these ETF Units to individual Investors, corresponding to the amount of funds they have invested in their Selected Portfolios. The whole ETF Units themselves will be held in a pooled account with the Custodian on behalf of all Investors who have been allocated a fractional interest in that ETF Unit. Excess fractions will be held in a "house account" for and on behalf of Acorns Australia as principal. Fractional interests allow you to consistently invest funds (including your virtual spare change) as it becomes available, rather than having to wait until you have enough money to buy a complete ETF Unit.
- Withdraw at any time
You can request a withdrawal of all or part of your investment from your Acorns Investment Account at any time. We will dispose of sufficient Investments in your Acorns Investment Account to pay the withdrawal proceeds in cash within 5 Business Days. There are no fees or penalties for cash withdrawals. Some withdrawal requests may be subject to rounding.
The significant benefits of the Acorns Grow Australia Fund are:
- No switching fee
Acorns does not charge switching fees if you change your Selected Portfolio. So you can change Selected Portfolios without paying extra fees or brokerage (see Transaction Costs on page [xx] for an explanation of applicable buy/sell spreads).
- No trading fees
Acorns does not charge fees for making contributions into or withdrawals from your Acorns Investment Account. Acorns also does not charge any brokerage, trading or transaction fees for purchasing the ETF Units that are allocated to individual investors.
- Regular savings
Acorns is based on the principle that regular investment, even if in small amounts, can lead to large savings over time. You can contribute to your Acorns Investment Account frequently (at no additional cost) by enabling RoundUps, or by setting automatic recurring deposits. Small change can add up over time.
The Fund and the Portfolios
The Acorns portfolio is purposely simple: Your money gets spread among six basic index funds. The weighting in each fund depends on your risk profile, which you can dial up or down on your iPhone. More aggressive settings put more money in stocks. But you always have some money in each fund, remaining diversified among large and small company stocks, emerging markets, real estate, government and corporate bonds.
Acorns simplified the often tedious and complex process of investing. But that doesn’t mean the investment strategy is any less sophisticated. The portfolios were designed with help from Dr. Harry Markowitz, a Nobel Prize winning economist, who is commonly referred to as the father of modern portfolio theory
“Investing in a broadly diversified portfolio for the long term is the right choice for most people,” Dr. Markowitz said in a statement. “Acorns enables this to happen automatically in tiny increments with minimal cost. This has the potential to help people across all demographics.”
Start investing with Acorns today! Get $5 when you use my invite code:
app.acornsau.com.au/invite/XD8VBS
REFERENCES:
Performance as of 22/April/2017