Kids give robo advice a boost

Robo adviser Stockspot hit a new milestone in January, with a total of $600 million under management for its 11,000 clients.

“This has been our biggest year since opening in 2013. We’ve managed to grow our funds under management to $600 million, up 89% on this time last year, and 170% from two years ago,” says Chris Brycki, Stockspot founder and CEO. A substantial proportion of the inflows have come through an increase in the number of kids’ accounts.

“Our kids’ accounts have grown 130% year on year to December 2021 and our total assets under management for these kids’ accounts has grown more than 158% in the same period,” he says

“What we offer is a hassle-free way parents or grandparents can invest for their kids by offering kids’ accounts that are fee-free for amounts up to $10,000 or when a child turns 18.”

He says one reason parents are opening these accounts are the returns: between 3% and 10% (the average return last year was8.86%), which ismuch better than the standard bank account return of 0.55%.

“With the closure of the Dollar mites accounts by CBA, parents see this as an attractive alternative to just leaving their children’s money in a low-interest account.

“Parents were starting these accounts as a replacement for the traditional Christmas gift of bikes and Barbies. We have been told they have bought enough things online in the last two years during lockdown, so they want to instead buy their children something more valuable and longer lasting.

“Other parents tell us they want to teach their children the value of saving and investing, and the discipline required for that.”