Frequently Asked Questions

There are lots of people and organisations who pitch to investors that they can help. Some of them are great, others not so much. OpenInvest is the first attempt in Australia to bring some of the world’s most credible and experienced investment managers together in the one place, so that you the investor can compare them, and select the one you like the best. Whilst these “direct platforms” do exist in other countries, OpenInvest is unique in committing to always being free of any conflicts of interest.

A stockbroker will personally help you manage your portfolio, calling you to discuss possible trades, and making those trades when you agree with their recommendations. The stockbroker may or may not know about asset classes other than Australian shares and may or may not know about other investments you are making, e.g. with another stockbroker. A stockbroker will generally charge you for making share trades. OpenInvest recognises the value in taking a whole-of-portfolio approach, outsourcing management of your portfolio to a company expert in asset management. The focus is on the whole portfolio, not individual trading. Thus, you are charged for the management of the portfolio, which is performed by professional investment managers. You pay 0.1% per trade (capped at $9.50) for domestic assets and 0.15% per trade (capped at $14.50) for international assets. 

If OpenInvest offered its own model portfolios we would have a conflict of interest in that we would benefit from investors selecting our model portfolios instead of any of the available investment managers. Therefore, it would be hard for us to resist encouraging you, by subtle or non-subtle means, to choose our model portfolios. The financial services industry is full of conflicts of interest, which is why we have established OpenInvest with a commitment to investors and to investment managers that we will never offer our own model portfolios.

We try and keep fees as low as possible, whilst still acknowledging that OpenInvest is a commercial entity, that receives a component of the management fee you pay, as well as transaction costs we impose. We use this to run the technology, reporting, operations, and legal compliance of OpenInvest.

OpenInvest has gone live with the four most obviously needed model portfolios. We will listen carefully to our clients and respond with innovations and new model portfolios that clients want. While we do not currently have specific ESG models, the investment managers may incorporate this into the way they manage their model portfolios.

The OpenInvest Administration Fee is 0.35% per annum, or $35 for every $10,000 invested over a year. This fee covers all the account operation and oversight, custodian, and audit fees, as well as brokerage on any ASX listed security. The OpenInvest fee also pays for the legal structure, technology, and reporting provided by OpenInvest.

There is also an Investment Manager Fee, which varies by model portfolio. This covers the professional management of your portfolio, including the expertise, intellectual property, research, analysis, modelling, asset allocation, and buying and selling decisions by your investment manager.

There are additional costs and charges that may be levied within some ETFs and managed funds, if those are part of the model portfolio you choose. These underlying costs are the Indirect Cost and Transaction Cost ((see our Fees page or the PDS for further details). OpenInvest charges the following transaction costs:

1. 0.1% per trade (capped at $9.50) for domestic assets 
2. 0.15% per trade (capped at $14.50) for international assets.

It’s hard to compare like-with-like, because there is nothing like OpenInvest. However, if we look at four different alternative investing scenarios, you can get a sense of the charging basis under each one:

1. A stockbroker – generally, an investor pays for each and every transaction. These fees can add up to a significant amount. There are often additional fees for portfolio administration and tax reporting services.
2. A financial planner – Generally, the investor pays the planner, one or more investment managers and also a platform fee to cover the cost of administration of your portfolio. Such fees can often add up to about 2% of your portfolio value.
3. Online broker – with an online broker you pay only for each trade you make. If you don’t trade often, you don’t pay very much. Of course, as you have no one to advise you, you may well be in a poorly diversified portfolio, or holding onto stocks that are falling, without knowing if you should sell.
4. Pick your own managed funds - If you invest in managed funds, you will get the benefit of professional investment management. However, it’s not always easy to access these products, and even if you can, it may not be clear how much you should invest into each fund to address each asset class.

We’ve started by consolidating the typical value chain of investing, while still maximising the value investors receive. Where investors have a good idea of what they want, we’re offering access to professional investment managers without the in-between steps or practitioners (and associated fees). For investors who are accustomed to doing their own trading, unadvised, using OpenInvest costs a bit more, but with significant value for those fees. OpenInvest believes that the advantages of having extensive professional resources in your corner, including the greater peace of mind you get from mitigating the risk inherent in all investing, make our fees incredibly reasonable.

Your fees are based on the daily value of your investment account, calculated monthly in arrears, and deducted by OpenInvest directly from the cash account which is part of your investment account.

OpenInvest provides the legal structure, technology, trading and operations. Each Model Portfolio has a recommended minimum investment amount so that investors will generally have exposure to every security in their chosen Model Portfolio. You can’t obtain the portfolio directly from your manager because they don’t provide these functions. They are not expert in these things, only in making the right decisions about investing, just as OpenInvest isn’t an investment manager, but is a technology and operations business. The right way to think about it is that you obtain a managed portfolio, together with updates from your chosen manager, via a partnership between your chosen manager and OpenInvest.

Your chosen investment manager doesn’t make recommendations to investors, it tells OpenInvest what changes to make, and OpenInvest makes those changes to every investor who has selected that portfolio. Of course, your chosen manager will always keep you up to date as to why they are making changes, and how they are thinking, generally.

OpenInvest provides the legal structure, technology, operations, reporting and legal compliance to allow your portfolio to be managed by your chosen investment manager.

Insights are various articles and videos by investment managers explaining interesting things in the world of investing, in particular, the things they think are most important that are affecting investment portfolios.

When you invest on the OpenInvest Marketplace, you are investing in the OpenInvest Portfolio Service ARSN 628 156 052 (Service), an IDPS-Like managed investment scheme that is a financial product registered with ASIC under the Corporations Act. We act as the responsible entity and trustee of the service which means we have a fiduciary duty to you – including to act honestly, with due care and diligence, and in your best interest as an investor.

The Service provides you with an Investment Account that contains a portfolio of investments that is professionally managed by your chosen investment manager and in accordance with your chosen investment strategy, referred to as a Model Portfolio. Unlike most other managed investment schemes where investors are issued units in a pooled fund, the portfolio of investments in your Investment Account is beneficially owned by you and kept separate to the portfolios of other investors. This means you can view the investments in your Investment Account, change Model Portfolios and contribute to or withdraw your investment at any time.

Your chosen Investment Manager will manage the assets in your portfolio in accordance with the parameters in each Model Portfolio. Where the Investment Manager believes it is necessary to make a change to the assets in a Model Portfolio, it tells OpenInvest what changes to make, and OpenInvest makes those changes to every investor account who has selected that portfolio. This is why we have chosen to use an IDPS-Like managed investment scheme as the investment vehicle for the OpenInvest Marketplace – it allows us to trade on your behalf in accordance with your chosen Model Portfolio without having to seek your instructions every time the Investment Manager wants to make changes to the portfolio – therefore ensuring that your investments are updated quickly and efficiently as market conditions change, and with reduced trading costs through the netting of transactions.

When you invest with your chosen investment manager via OpenInvest, you're investing in the OpenInvest Portfolio Service, which is registered with and regulated by ASIC and subject to all the protections afforded under Australian law.

Your investment is administered by OpenInvest and held on trust for you by our custodian, Link Fund Solutions. This means your assets are held for safekeeping, on your behalf, by Link Fund Solutions and you hold a right to receive the benefit of the investments in your Investment Account. While investments are held and traded at a ‘pooled’ level (meaning many small investments are handled as one large one) each investor has a separate Investment Account which reflects their own individual position.

As required by law, the OpenInvest Portfolio Service is regularly audited by BDO Australia, one the world's largest auditors. As an independent and external auditor, Deloitte is responsible for, among other things:

• Auditing the Scheme financial statements;
• Auditing our compliance with our Australian Financial Services Licence conditions; and
• Auditing our adherence to the compliance plan for the Service.

Deloitte also has an obligation to report to ASIC if it believes that OpenInvest has significantly contravened the law. Audited Scheme financial accounts will be made available to investors, in accordance with OpenInvest’s principle of transparency.

This is the most important part of OpenInvest; selecting the category that’s right for you. We provide more information to help you make the right decision, in our blog, here. We also suggest that you refer to the Target Market determination and if you are in any doubt, you should talk to your accountant.

Yes, by all means, discuss OpenInvest with your accountant, or even a financial adviser, if you have one. If they want to talk to us to better understand who we are and what we do, please ask them to get in touch with us.

Each of the model portfolios is managed to seek a particular return over the long term, taking into account the risk that goes with all investing. You can see more about each category here, and we have written an article that explains the connection between Risk and Return here.

We publish performance figures by Investment Manager per model on the individual Manager pages which can be found here.

Every Model Portfolio has a recommended minimum investment amount, which is an amount that ensures you obtain broad exposure to the securities in that Model Portfolio. If you invest less than the recommended minimum, you may not own all securities for that Model Portfolio, however, when you add additional money to your Account, the Administrator will seek to acquire those securities for you.

Once you have established your account with OpenInvest and your initial transfer amount has been invested in your chosen model portfolio, you can add more money to be invested at any time via the Add Money interface within the Account Maintenance section of your Investor Portal.

There is no minimum amount you can transfer into your account. However, the cash portion of your portfolio may need to meet a minimum threshold before assets can be purchased.

We don’t charge you any fees when transferring additional money into your investment account. However, as outlined on our Fees page, there may be transaction costs levied when assets are added to your portfolio.

Investment management companies are full of educated, trained and experienced professionals, whose job it is to study data and trends, and assess different economies and companies in order to make the right investment decisions. By selecting an investment manager to manage your portfolio, you maximise the chances you will obtain a superior return, grow your wealth over time and rather than potentially making less optimal decisions on your own.

Some investment managers also have advisers they employ, so you can go directly to them for them to look after your portfolio. But you will have to pay for the cost of this adviser. Others don’t employ advisers, nor do they provide an online solution to enable you to choose between managers, and then have your manager manage your portfolio together with providing you with regular updates and explanations.

We have chosen some of the best, most highly qualified investment managers, based on their track records, depth of resources and commitment to providing not only managed portfolios, but also clear and transparent explanations to investors.

Yes, it is our intention to provide more choice by adding more managers into the future.

Yes, you are never locked in to your chosen manager.

Yes, if you feel your circumstances have changed or you weren’t in the right category to begin with, it's very easy to change.

Yes, you are not locked in. You can leave the service at any time. Make a withdrawal, close your account, after all it is your money, you are in control.

Your securities are YOUR securities, not OpenInvest’s. They are held on trust for you by the custodian, Link Fund Solutions, a highly respected custodian.

OpenInvest provides an intuitive Investor Portal so you can log in at any time and see at a glance:

• the overall status of your investment account
• the composition of your portfolio
• how your portfolio is performing
• updates from your investment manager
• insight articles and videos from your investment manager
• any communication from OpenInvest
• upcoming events you might be interested in

We use a single Holder Identification Number (HIN) as it creates a number of efficiencies for investors while you retain flexibility and control. OpenInvest consolidates the shares held by all investors on a special purpose HIN. This means we are always able to trade efficiently, based on instructions from your selected investment manager, we minimise trading and settlement costs on your behalf and keep your portfolio efficiently aligned with your manager’s model. This allows OpenInvest to offer you the service for a simple, low fee.

As all of the shares, funds, and ETFs held by all investors in OpenInvest are held on trust by the custodian, you can be assured that your assets are safe and readily available to you, and that you always know which shares, funds, and ETFs are yours.

You can always see via your Investor Portal which shares, funds and ETFs are yours, how much you paid for them, how they’re performing, what’s your tax position, etc. They are YOURS. It's just that they are legally held and protected by the custodian, Link Fund Solutions, to ensure we can efficiently manage everyone’s portfolio based on directions from your chosen investment managers.

We both do. Your chosen investment manager is making all the decisions as to what to buy, hold or sell. But OpenInvest does all the trading based on the decisions of the investment managers. OpenInvest is also responsible for all of the legal compliance, technology, and tax and portfolio reporting.

OpenInvest is regulated by ASIC. It was founded by experienced financial services executives (who work in the business), and staffed by other experts in building technology, running investment platforms and ensuring everything is always compliant according to the law. But OpenInvest doesn’t legally hold onto any of your securities – they are held at all times by the custodian, Link Fund Solutions.

The investment managers are experts in making investment decisions. They too are regulated by ASIC.

No, this is exactly why we founded OpenInvest and why we have structured it the way we have. Everything must be transparent, and OpenInvest commits to you, the investor, and to investment managers, that we will never play favourites, that we will treat all managers equally, that we will never compete against the managers by establishing our own model portfolios. For this reason, the OpenInvest share of the Investment Management Fee has to be the same, so we never have an incentive to treat one manager better than the others.

Not only do we have no incentive to do so, but doing so would completely undermine our business, because OpenInvest has been established based on the principle that we have no vested interests, no conflicts of interest, and no alignments with other entities, and that we will always present participating investment managers on an equal footing. We have also committed to investors and to investment managers that we will never do so.

Yes, OpenInvest is a Responsible Entity, regulated by ASIC pursuant to the Corporations Law. We have many obligations we have to comply with, including having an independent auditor who does an annual audit on how well we are satisfying these legal obligations. ASIC has awarded OpenInvest a licence on the basis we have the skills and experience to operate in a legal and compliant manner, and has appointed two of our co-founders, Andrew Varlamos and James Beckford to be Responsible Managers on the licence. You can see more about their backgrounds here.

If you have a query or complaint, you can either:

- call OpenInvest on 1800 954 549 between 8:00am and 6:00pm Monday to Friday; or

- send it by email to complaints@openinvest.com.au

We will deal with any complaint and respond to you as soon as practicable and may ask you for further information that we think is necessary to enable us to properly consider the complaint. If we cannot resolve the matter within 30 days of receiving your complaint, we will provide a written explanation to explain our assessment. See the PDS Enquiries and Complaints section and our Complaints Management Policy on our website under Key Documents.

If your complaint is not dealt with to your satisfaction within this timeframe, you may refer your complaint to the Australian Financial Complaints Authority (AFCA), of which we are a member, and which is an independent entity, at no cost.

The contact details for AFCA are:

Mail - GPO Box 3, Melbourne, Victoria, 3001

Telephone - 1800 931 678

Website - www.afca.org.au

Email - info@afca.org.au

A Product Disclosure Statement (PDS) is issued by us as the responsible entity and trustee of the Service. It contains information about the Service including its key features and benefits, risks, how it works, as well as the costs, fees and charges that we may receive and what your rights and obligations are as an investor in the Service

We are bound by the contents of this PDS and cannot act inconsistently with its terms. The PDS may also be updated by a supplementary PDS or replaced by a new PDS. Where such changes are significant to your investment, such as a change in fees, you will be given at least 30 Days written notice before such changes take effect.

Our responsibilities and obligations as the responsible entity and trustee of the Service are governed by the Constitution for the Scheme, as well as the Corporations Act and general trust law. The Constitution contains a number of provisions relating to the rights, terms, conditions and obligations imposed on both investors and us. You may request a copy of the Constitution from us free of charge by contacting support@openinvest.com.au.