Interesting analysis here
https://moneykingnz.com/sharesies-january-2023-fee-changes-are-they-good-or-bad/
I see those investing tiny little amounts like a few dollars a week are venting a fair bit of steam about the changes with not a second thought for whether the platform (losing perhaps $30-40m a year if no changes were made) is actually sustainable.
Can't help myself observe that human nature is always a funny thing eh...people wanting service for below the real cost of providing it are always going to be disappointed in the long run either through the business itself failing or the price changing.
So why bother bringing this up here ?
Well there is something for people to think about.
Maybe you invest at about $50K a time then that's $100 brokerage per investment with Direct Broking @ 0.2%
If that went through Sharsies under their old fee structure of 0.5% for the first $3,000 and then 0.1% thereafter the brokerage would have been $62.
Not really worth worrying about that difference I reckon but it's much bigger now
Under their new structure there's a price cap of $25 per trade so they are only one quarter the brokerage of Direct on a $50K order and one eighth of the Brokerage on a $100K order. Their price caps on Australian and US investments are even more attractive. Hmmm
I guess the question that must be considered, is what if Sharsies which is obviously facing serious financial pressure with its operational losses goes belly up and hundreds of thousands of individual share parcels need to be unwound by the receivers. I guess if this is a real concern you can action a sizeable investment through Sharsies and then transfer it into your own name for $15.
Reading this under how does Sharsies make money We earn interest from any money in your Wallet. No interest whatsoever appears to be paid on the balance of funds you hold with them so that needs to be factored into the situation too.
$200 brokerage to trade $100K on Direct or $25 through Sharsies. Hmmm...I think this is something now worth thinking about over the holidays.
Who can blame Sharesies for making changes to their pricing structure in an effort to stop hemorrhaging cash?
I bring this up because it appears to represent a new opportunity for more serious investors to save a lot on brokerage. Will they execute decent sized trades for you in a professional manner? I have no idea. Does anyone else know?
In my experience, the sharesies order system leaves a lot to be desired vs competitors like jarden direct. Things I have found bothersome include slow order cancellation, slow order placement, orders in last 30 minutes of trading are often placed the next day, orders in last 15 minutes of trading ALWAYS placed the next day, no DRP, no market depth data. From memory jarden direct gives you live depth data for 3 months after a buy or sell order, whereas sharesies is going to charge 15 a month. I wouldn't want to make such large orders without live depth data, so feel the $200 to $25 comparison is not quite the truth. If you include paying for live data + transferring out (as I often do) I think the Sharesies offer alright but nothing to get excited about for most retail investors. I doubt there are many retail investors in NZ that trade in 100k blocks, and I wonder if they get special rates at the other brokers...
Appreciate the feedback, thanks. Sounds like the service standards are a very long way south of what I'm used to. For example, I sometimes place an order within 4-5 minutes of market close to take advantage of price anomalies thrown up under the last 15 minute price match system. 9 times out of 10 that order is placed in time to be executed as part of the final price match process. Obviously, there's no chance of doing that through Sharsies.
I also think that notwithstanding their price changes at the rate they're burning through cash the chance of this becoming a gigantic mess, (that could take many months or even years), for receivers to clean up is very real. They can't keep burning through $3m a month for long. Even their revised fee structure looks unsustainable to me. I expect pricing to be further revised in the near future or they will go under.
I suspect their business model may in fact be systemically flawed in that they've attracted hundreds of thousands of extremely low / (no?), value customers that are ostensibly impossible to service in a profitable way. I think this all ends in tears and a gigantic mess for everyone involved.
Funnily enough just received this email this evening.
QuoteDear XXXXX,
With 2022 coming to an end, we would like to thank you for choosing Jarden Direct.
In August we announced details of our joint venture with FNZ and Hatch. Over the past few months, we have been working closely with both businesses to plan how we will leverage our collective capability to provide you with more extensive products and services.
In the new year we will reach out to ask how you would like our platform and services to evolve. In the meantime, it's business as usual, please don't hesitate to get in touch with the team if you have any questions.
For our clients using Direct Broking, your migration to Jarden Direct will be ready in the new year. If you would like your account to be one of the first to try the platform out, please contact the team at info@jardendirect.co.nz
Have a wonderful Christmas and Happy New Year!
Kind regards,
The Jarden Direct Team
Emphasis added. Be interesting to see how that unfolds in 2023.
They have market depth. It costs $10 a month.
Their new $15 monthly plan includes market depth and no fees on $5k of trades per month plus no fees on $10k of auto investments. Per Basil's link that plan works out the best value for money if you invest or trade $800+/month. I will move to that plan. I pay for market depth anyway so it is costing me an extra $5 a month with the bonus of zero trade fees on the first $5k + $10k, so for me it will be cheaper than what I pay now.
I use it for accumulations that I then transfer over in bulk to my CSN. It's cheaper that way. It will still be cheaper with the new $15 transfer fee. Transfers are usually 1-2 days. It won't work for someone who is not buying (or selling) every month.
Limit orders are instant. At market orders are probably the same but I don't use them. I have never had any issues with timing of placement, except for orders in the the last 15 minutes of the day. Sometimes they do not get placed until the following morning. How I get around that is placing out of the money orders at least 30 minutes before the close. These sometimes get executed in the closing 15 minutes if my price is reached.
Regarding slow cancellations, I find cancellations happen straight away if the market is open - often an order still appears open but a page refresh changes that. But when the market is closed they won't be cancelled until it opens again. It's a pain given the funds are locked up, but it's not a biggie now that I know to cancel orders 30 minutes before closing time.
My only complaint is the lack of DRP. Again, I transfer out in time for any DRP in which I want to participate.
Despite the security they (supposedly) offer regarding client funds separation, which I do not doubt, I ultimately prefer to have the shares under my CSN, not theirs - hence the accumulate > transfer >accumulate > transfer approach.
In summary, it's not for everyone but so long as you know how they operate and work within those guidelines, it is actually very handy.
When Sharsies came out I quite like the idea. Seemed a good way of getting newbies interested in shares and investing. I am quite happy with my Direct Broking account so didn't see the need ot change.
The thing I didnt like was share being held in trust in sharsies name. I much refer my trades to be in my name. I know you can transfer the name over - but who can be bother with that extra level of admin.
I' havent seen sharsies accounts. But it would cause me concern if they went bust and some one had to unravel the shares held in trust to get them back to the legitimate owner. Sure as heck you wont be able to trade those shares quickly.
My experience with Sharesies is much more like Ferg's as opposed to Plata's.
Quote from: Ferg on Dec 22, 2022, 09:13 PMThey have market depth. It costs $10 a month.
Their new $15 monthly plan includes market depth and no fees on $5k of trades per month plus no fees on $10k of auto investments. Per Basil's link that plan works out the best value for money if you invest or trade $800+/month. I will move to that plan. I pay for market depth anyway so it is costing me an extra $5 a month with the bonus of zero trade fees on the first $5k + $10k, so for me it will be cheaper than what I pay now.
I use it for accumulations that I then transfer over in bulk to my CSN. It's cheaper that way. It will still be cheaper with the new $15 transfer fee. Transfers are usually 1-2 days. It won't work for someone who is not buying (or selling) every month.
I agree if you are making trades every month then it is likely the sharesies subs are the best option. I know you can buy the market depth, up until recently I was using jarden direct every few months to keep my live data that way. I have not yet spent the time to pick this apart and make comparisons, maybe after xmas I'll bother. I feel like the transfer fee may become quite influential on what broker is best. Fricken subscriptions, making life complicated. I think after this change pursuing an ETF heavy strategy on Sharesies might be less viable vs going direct with smartshares.
Quote from: Plata on Dec 22, 2022, 10:48 PMI think after this change pursuing an ETF heavy strategy on Sharesies might be less viable vs going direct with smartshares.
Smartshares on Sharesies used to have no fees. They now incur standard trading fees. I'm guessing that will change under the new pricing model if one does the auto-invest option.
The reason I no longer do SS directly is 100% due to the delays in getting orders placed by Link MS or whoever administers the orders (I was doing automatic payments). I often found that I (and I am guessing everyone else) bought on the same day at the highest price of the month when I did it directly with Smartshares.
The delays from my making a payment and the trades being executed was a number of days, sometimes up to 2 weeks or more from memory. I think they bundle orders and then process in bulk on particular days (which allows them to front run on the underlying stocks? I don't know but it wouldn't surprise me). I played that game for maybe 4-6 months before I transferred my Smartshares over to Sharesies.
The pricing of some funds is definitely cyclical. I now execute trades via Sharesies at prices I am happy to pay at what I think are low cyclical points, not the prices they decide.
What was really frustrating with trading directly with SS was placing an extra order today based on a good price, and then waiting days and days for that to execute. Eventually the trade would be executed but at a price I would not have paid. That was the deal breaker for me. AFAIK you cannot have a limit price when dealing directly with Smartshares. I might need to run some numbers to check my method is better.
Quote from: Ferg on Dec 22, 2022, 11:06 PMSmartshares on Sharesies used to have no fees. They now incur standard trading fees. I'm guessing that will change under the new pricing model if one does the auto-invest option.
The reason I no longer do SS directly is 100% due to the delays in getting orders placed by Link MS or whoever administers the orders (I was doing automatic payments). I often found that I (and I am guessing everyone else) bought on the same day at the highest price of the month when I did it directly with Smartshares.
The delays from my making a payment and the trades being executed was a number of days, sometimes up to 2 weeks or more from memory. I think they bundle orders and then process in bulk on particular days (which allows them to front run on the underlying stocks? I don't know but it wouldn't surprise me). I played that game for maybe 4-6 months before I transferred my Smartshares over to Sharesies.
The pricing of some funds is definitely cyclical. I now execute trades via Sharesies at prices I am happy to pay at what I think are low cyclical points, not the prices they decide.
What was really frustrating with trading directly with SS was placing an extra order today based on a good price, and then waiting days and days for that to execute. Eventually the trade would be executed but at a price I would not have paid. That was the deal breaker for me. AFAIK you cannot have a limit price when dealing directly with Smartshares. I might need to run some numbers to check my method is better.
Smartshares (direct) only action purchases once per month on the 20th, which are then allocated to you on the 30th. These new shares are created at NTA. Buying and selling on the NZX is frequently at very different pricing to NTA, some very substantial premiums/discounts for the smaller less liquid funds. I'm not sure how the two market-makers operate but they don't seem terribly active or efficient.
Yeah for sure the smartshares market prices are normally higher than their NTA from what I have seen. Seems like there are a few bots that know the live NTA at a given point in the day and conspire to give whomever is buying or selling a shit deal. For some of the etfs, I think it would be quite difficult to avoid getting screwed if you were investing more than a few grand... liquidity just isn't there.
Quote from: Plata on Dec 23, 2022, 10:34 AMYeah for sure the smartshares market prices are normally higher than their NTA from what I have seen. Seems like there are a few bots that know the live NTA at a given point in the day and conspire to give whomever is buying or selling a shit deal. For some of the etfs, I think it would be quite difficult to avoid getting screwed if you were investing more than a few grand... liquidity just isn't there.
This was what I used sharesies for, to beat them at their own game, by purchasing small amounts of say the top 5 holdings of whatever index.
Highly annoyed about the quadrupling of fees, but hey, what are we going to do in a small hsitty investor market. Back to the house swapping game I guess...
Quote from: Ferg on Dec 22, 2022, 09:13 PMThey have market depth. It costs $10 a month.
Their new $15 monthly plan includes market depth and no fees on $5k of trades per month plus no fees on $10k of auto investments. Per Basil's link that plan works out the best value for money if you invest or trade $800+/month. I will move to that plan. I pay for market depth anyway so it is costing me an extra $5 a month with the bonus of zero trade fees on the first $5k + $10k, so for me it will be cheaper than what I pay now.
I use it for accumulations that I then transfer over in bulk to my CSN. It's cheaper that way. It will still be cheaper with the new $15 transfer fee. Transfers are usually 1-2 days. It won't work for someone who is not buying (or selling) every month.
Limit orders are instant. At market orders are probably the same but I don't use them. I have never had any issues with timing of placement, except for orders in the the last 15 minutes of the day. Sometimes they do not get placed until the following morning. How I get around that is placing out of the money orders at least 30 minutes before the close. These sometimes get executed in the closing 15 minutes if my price is reached.
Regarding slow cancellations, I find cancellations happen straight away if the market is open - often an order still appears open but a page refresh changes that. But when the market is closed they won't be cancelled until it opens again. It's a pain given the funds are locked up, but it's not a biggie now that I know to cancel orders 30 minutes before closing time.
My only complaint is the lack of DRP. Again, I transfer out in time for any DRP in which I want to participate.
Despite the security they (supposedly) offer regarding client funds separation, which I do not doubt, I ultimately prefer to have the shares under my CSN, not theirs - hence the accumulate > transfer >accumulate > transfer approach.
In summary, it's not for everyone but so long as you know how they operate and work within those guidelines, it is actually very handy.
It is always good to understand the system and make it work for you, rather than the other way around ;D
My question is, what if someone wanted to put a $1M trade through? That would be $3000 in brokerage elsewhere, does their $25 trade cap still apply?
The problem with these fractional share brokerages is that they are modelled on Robinhood in the US, who makes money from selling client order flow to HFT. This is illegal for Australian shares, and HFT is not operating in NZ so this avenue of revenue is not available to them (other than selling orders for US shares to US HFT operators who might not be that interested due to tiny volumes).
Thanks to all those who have contributed. I get it that some initial customers are annoyed although I think the basis for their annoyance is misplaced.
As a service provider myself I can tell you that the provision of services at below cost is simply not a sustainable business strategy and I think small, disaffected customers need to consider how fortunate they have been to get such ridiculously and unsustainably priced service for so long and be thankful to the founders and subsequent investors in Sharsies who have burned through a whopping $25 million dollars meeting their needs ! Pricing still looks extremely cheap and unsustainable to me going forward so enjoy that for as long as it lasts before it gets reviewed upwards quite significantly again in due course.
Had a bit of a think about this in terms of does it work for me. My view as far as I am concerned time = money so for me to bother running a Sharesies account side by side with a direct broking (DB) one, (I have too much on call with DB to run a non-interest bearing wallet with Sharsies as my stand alone broker), to save decent money on the brokerage I'd need to be buying $100K at a time, fixed fee $25 with Sharsies and $200 with direct broking, saving $175. But are you really saving $175 ? No.
Here's the catch, every time I transfer $100K into the Sharsies wallet the clock starts ticking to execute the investment because $100K at (assuming 4.5% on call with DB from February 2023 when RBNZ put the cash rate up) generates $375 per month in interest with DB but nothing with Sharsies. You have to execute the investment within 2 weeks to make it even marginally worthwhile which means there's more prospect of "forcing" the transaction through, being a price "maker", rather than a price taker and getting a better price. The risk is you end up paying more and executing more quickly. That and taking into account there's no interest on the Sharesies wallet this all brings me back to the highlighted blue part above. Feels like a dog chasing its own tail situation to me.
It was well worth considering the whole thing though. I also think the point I made in the post #2 above about the prospect of Sharsies entering receivership at some stage is a very pertinent concern.
Conclusion - For me, lets see what Jarden do with their Hatch thing next year.
Quote from: Basil on Dec 23, 2022, 01:48 PMHere's the catch, every time I transfer $100K into the Sharsies wallet the clock starts ticking to execute the investment because $100K at (assuming 4.5% on call with DB from February 2023 when RBNZ put the cash rate up) generates $375 per month in interest with DB but nothing with Sharsies. You have to execute the investment within 2 weeks to make it even marginally worthwhile which means there's more prospect of "forcing" the transaction through, being a price "maker", rather than a price taker and getting a better price. The risk is you end up paying more and executing more quickly. That and taking into account there's no interest on the Sharesies wallet this all brings me back to the highlighted blue part above. Feels like a dog chasing its own tail situation to me.
Its funny how moving from a zero interest environment to one where you can easily get 4-5% interest on your money, changes EVERYTHING lol. Methinks a lot of companies are going to find themselves in a whole different world now that people aren't prepared to hand over their dosh in return for nothing but a future promise of a return.
yep thanks MR B for the articles very interesting.
Quote from: Basil on Dec 23, 2022, 01:48 PMIt was well worth considering the whole thing though. I also think the point I made in the post #2 above about the prospect of Sharsies entering receivership at some stage is a very pertinent concern.
Conclusion - For me, lets see what Jarden do with their Hatch thing next year.
That would be a disaster for the NZX. Participation rates took decades to repair from the legacy of distrust created by the 1987 share market crash and by the 2006 to 2010 finance company collapses.
Quote from: KW on Dec 23, 2022, 01:54 PMIts funny how moving from a zero interest environment to one where you can easily get 4-5% interest on your money, changes EVERYTHING lol. Methinks a lot of companies are going to find themselves in a whole different world now that people aren't prepared to hand over their dosh in return for nothing but a future promise of a return.
You better send that memo to Kathy Wood at the ARK innovation fund, It seems her earlier one got lost in the mail lol. Down more than 65% this year, WOW, I bet investors are "thrilled" with that!
https://www.nzherald.co.nz/business/sharesies-announces-restructure-redundancies-likely/GSFASJY7UVFOVIQ7SYB3DCY73Y/
Announcing staff layoffs as part of a wider restructuring - no details as to what else this entails but it's hard on the heels of their fee increases this week. Your concerns appear to be even more... pertinent, Basil.
Quote from: Hectorplains on Feb 02, 2023, 10:20 PMhttps://www.nzherald.co.nz/business/sharesies-announces-restructure-redundancies-likely/GSFASJY7UVFOVIQ7SYB3DCY73Y/
Announcing staff layoffs as part of a wider restructuring - no details as to what else this entails but it's hard on the heels of their fee increases this week. You concerns appear to be even more... pertinent, Basil.
if it was me I'd be getting my shares out of the trust and into my own name.
I've watched a video or two of the founders and what they are trying to achieve, and I admire their vision and goal of making investing accessible to all.
Trying to service the needs of micro investors in a profitable way, and seeing the vitriol some of them post when the fees changed to something that still looks extremely cheap), I suspect the founders however well-intentioned and idealistic they may be, are really in a very, very difficult fight for their invested capital to try and make their business model profitable.
The founders can expect even more vitriol from micro investors when they inevitably have to adjust their fees upwards again to something that has a more realistic chance of being sustainable.
Yes I suspect the founders will have lost their capital. I'm not too concerned about Sharesies going bust. I don't think it's that likely and trust that the trustee system will safeguard my shares, but I've only got a small percentage of investments with them. I quite enjoy making a daily "cup of coffee" investment each day. Instead of buying a coffee I buy $5 worth of a small "play for fun" portfolio of AUS and US shares.
I agree the level of vitriol is very high.
Quote from: Raven on Feb 03, 2023, 11:46 AMYes I suspect the founders will have lost their capital. I'm not too concerned about Sharesies going bust. I don't think it's that likely and trust that the trustee system will safeguard my shares, but I've only got a small percentage of investments with them. I quite enjoy making a daily "cup of coffee" investment each day. Instead of buying a coffee I buy $5 worth of a small "play for fun" portfolio of AUS and US shares.
I agree the level of vitriol is very high.
I'm quite sure your shares are "safe"
But shares are quite a liquid asset class. Who knows how long it would take to get your shares out of the trust if Sharesies did go bust. I can't imagine it would be done over night. And what value would those share be when the are liquidated?
Use MFB as an example. Say you hold and on the same day they declare significant profit down grade, Sharesies folds. What then
Quote from: Raven on Feb 03, 2023, 11:46 AMYes I suspect the founders will have lost their capital. I'm not too concerned about Sharesies going bust. I don't think it's that likely and trust that the trustee system will safeguard my shares, but I've only got a small percentage of investments with them. I quite enjoy making a daily "cup of coffee" investment each day. Instead of buying a coffee I buy $5 worth of a small "play for fun" portfolio of AUS and US shares.
I agree the level of vitriol is very high.
The shares may be safeguarded but if the company goes bust they will need to be distributed. This means selling them as many people wont have enough shares to have a minimum parcel to hold under their own name, or a brokerage account to transfer them to. So if Sharesies dump all their shareholdings on the market they will depress the share price significantly since the NZX is very low volume.
Secondly, they may not be safeguarded - they may have been used as collateral for loans, in which case a secured lender will have first dibs on them. This is standard practice for brokers who operate margin accounts (those that allow you to buy then pay, rather than paying then buying).
I'm inclined to agree with KW's cautionary post above. From vague memory wasn't there a thread in the other place about the Halifax N.Z. brokerage that failed and if I recall correctly, didn't it take years to sort that mess out?
Basil, KW & Minimoke - all fair comments, and I would definitely be getting out if I thought there was a genuine likelihood of Sharesies platform collapsing.
Quote from: Minimoke on Feb 03, 2023, 12:18 PMI'm quite sure your shares are "safe"
But shares are quite a liquid asset class. Who knows how long it would take to get your shares out of the trust if Sharesies did go bust. I can't imagine it would be done over night. And what value would those share be when the are liquidated?
Use MFB as an example. Say you hold and on the same day they declare significant profit down grade, Sharesies folds. What then
I think in any potential liquidation the shares would be distributed out of trust / nominee company, in-specie to individual shareholders but with their platform having overseas shares and the numbers of investors this process, if it ever happens, that could take a very long time.
Just a thought. I think Sharsies lost $26m last year, (from memory). With the downturn in the market maybe they will lose more this year? How long are those sorts of losses sustainable?
From Sharesies T & C's, parts 3 and 4:
If we become insolvent or otherwise materially default on our obligations, your Wallet and Portfolio will be protected from the claims of general creditors, including any bank holding your money and CDO for any money or Shares held in the NZX depository account.
We will keep detailed records of all money in your Wallet and Investments in your Account. The money in your Wallet and Investments in your Account will be held on bare trust for you by Sharesies Nominee or another approved third-party custodian, at our direction.
Sharesies Nominee is a non-trading company that exists to hold our clients' money and Investments secure and separate from our own (although we may hold a buffer of our own money in the same account).
hopefully the nomiee company protects the holders as the damage to the NZ market doesnt bare thinking about...the average punter has taken decades to come back to the market.
Quote from: KW on Feb 03, 2023, 12:22 PMThe shares may be safeguarded but if the company goes bust they will need to be distributed. This means selling them as many people wont have enough shares to have a minimum parcel to hold under their own name, or a brokerage account to transfer them to. So if Sharesies dump all their shareholdings on the market they will depress the share price significantly since the NZX is very low volume.
Secondly, they may not be safeguarded - they may have been used as collateral for loans, in which case a secured lender will have first dibs on them. This is standard practice for brokers who operate margin accounts (those that allow you to buy then pay, rather than paying then buying).
I get your point about minimum shareholding - I don't know how they would handle that. But first though is they would distribute out to the owner and that minimum then became their problem. Which means brokerage might be more than shares are worth. There maybe something in fine print (that I can't be bothered looking up) that allows trustee to sell in the absence of owner instruction.
And I gather distribution is out to the owner. Who Is the shareholder. But to distribute the owner needs to have a CSN. If Raven, for example, doesn't have a CSN then no distribution until that is done. Which further delays the process and adds to trustee costs.
I don't share Ravens confidence - these low margin platforms seem very vulnerable to me.
Minimum shareholdings and no CSN's would well complicate things.
Given Sharesies claims about half a million users I suspect that their demise would actually become a political problem. As has been pointed out, the reputational damage to the market would be substantial. Obviously not the in the same league as a major trading bank collapse, but perhaps similar to one of the smaller ones going under. I wouldn't be surprised if some sort of white knight rescue package might be cobbled together to allow a more orderly wind-down before an actual collapse occurred.
hopefully no loans secured against the nomiee company and that is unlikely.. surely not !!! ???
"these low margin platforms seem very vulnerable to me."
the trustee could off market transfer them and its a simple process.
someone here stated they buy on the SHAZ platform and then transfers them out to a CSN.
Quote from: Onemootpoint on Feb 03, 2023, 01:08 PMFrom Sharesies T & C's, parts 3 and 4:
If we become insolvent or otherwise materially default on our obligations, your Wallet and Portfolio will be protected from the claims of general creditors, including any bank holding your money and CDO for any money or Shares held in the NZX depository account.
Just note the very specific wording in that T&C - it says protected from "general creditors" which is true, owners of the shares would have equitable priority over general creditors in a distribution. However, they do not say anything about "secured creditors", and its secured creditors who have first dibs on everything. The devil is always in the fine print.
Quote from: Minimoke on Feb 03, 2023, 01:17 PMI get your point about minimum shareholding - I don't know how they would handle that. But first though is they would distribute out to the owner and that minimum then became their problem. Which means brokerage might be more than shares are worth. There maybe something in fine print (that I can't be bothered looking up) that allows trustee to sell in the absence of owner instruction.
And I gather distribution is out to the owner. Who Is the shareholder. But to distribute the owner needs to have a CSN. If Raven, for example, doesn't have a CSN then no distribution until that is done. Which further delays the process and adds to trustee costs.
I don't share Ravens confidence - these low margin platforms seem very vulnerable to me.
The difficulty and cost of distributing in specie is why they would just sell everything and settle in cash to everyone's account. I have no doubt the T&Cs allow for this.
Quote from: Waltzing on Feb 03, 2023, 01:44 PMhopefully no loans secured against the nomiee company and that is unlikely.. surely not !!! ???
Its known as hypothecation, or rehypothecation
https://www.investopedia.com/terms/r/rehypothecation.asp
The devil is in the detail - what type of account are Sharesies people trading on. With a standard broker most people are trading on T+2 accounts - ie. you buy the shares and then 2 days later you pay for them. You have 2 days to get funds into your account to settle the trade. This allows people to day trade without ever spending a cent, as your broker nets out the buys and sells and covers the settlement payments. A T+2 account is technically a margin account, even though its not how you think of margin (as in borrowing money from the broker to buy shares). And any shares held in a margin account are automatically available to the broker to rehypothecate even if you dont have any outstanding funds owing on that account, or have bought shares that you have not borrowed against. This is because if you fail to pay up for shares bought on T+2 terms the broker can take other shares that you own and sell them in order to settle the account. You have basically agreed to give the broker dealing rights over your shares.
Quote from: Raven on Feb 03, 2023, 01:40 PMGiven Sharesies claims about half a million users I suspect that their demise would actually become a political problem. As has been pointed out, the reputational damage to the market would be substantial. Obviously not the in the same league as a major trading bank collapse, but perhaps similar to one of the smaller ones going under. I wouldn't be surprised if some sort of white knight rescue package might be cobbled together to allow a more orderly wind-down before an actual collapse occurred.
If (and it is an If) there was any sort of Sharesies collapse, it would be this generation's 1987 moment - scare off a heap of mum and dad investors from the share market.
Clearly Sharesies have to do something, losses aren't sustainable.
I've mucked around with "spare change" amounts for sh1ts & giggles, but the new pricing is still workable and plans can be work for you. Maximum brokerage $5 USD for US shares or $15 AUD for Australian shares....sheesh! Not exactly over the top.
Quote from: KW on Feb 03, 2023, 02:12 PMIts known as hypothecation, or rehypothecation
https://www.investopedia.com/terms/r/rehypothecation.asp
The devil is in the detail - what type of account are Sharesies people trading on. With a standard broker most people are trading on T+2 accounts - ie. you buy the shares and then 2 days later you pay for them. You have 2 days to get funds into your account to settle the trade. This allows people to day trade without ever spending a cent, as your broker nets out the buys and sells and covers the settlement payments. A T+2 account is technically a margin account, even though its not how you think of margin (as in borrowing money from the broker to buy shares). And any shares held in a margin account are automatically available to the broker to rehypothecate even if you dont have any outstanding funds owing on that account, or have bought shares that you have not borrowed against. This is because if you fail to pay up for shares bought on T+2 terms the broker can take other shares that you own and sell them in order to settle the account. You have basically agreed to give the broker dealing rights over your shares.
Sharesies trades are pre-paid. You have to have the money in your account before the trade can be processed.
Quote from: Raven on Feb 03, 2023, 02:18 PMSharesies trades are pre-paid. You have to have the money in your account before the trade can be processed.
Thats a good thing. Now you just need to check that they havent inserted any nasty little dealing rights in the T&Cs hoping no one will ever read the fine print lol
Quote from: KW on Feb 03, 2023, 01:56 PMThe difficulty and cost of distributing in specie is why they would just sell everything and settle in cash to everyone's account. I have no doubt the T&Cs allow for this.
A bit of digging and Sharsies say (my emphasis)
"You own all of the investments you have through Sharesies. In legal terms, you're referred to as the 'beneficial owner' of your investments—you get the benefits of owning them. In other words, you're the owner entitled to the full value of your investments, and if you make a gain, it's yours.
You control when you want to buy, sell, withdraw or participate in corporate actions made available on Sharesies. We act on your instructions. We don't make investment decisions for you."
I can't find any Sharesies Nomineee Ltd trust type document - which isn't helpful as I would have expected full disclosure would detail how your shares are treated in the event of closure.
surely they cant sell on market without disruption and it more likely off market transfer to institutions.
its doubtfuly the trust deed doesnt have extensive clauses cover everything in sundry.
doubt any loans on the parent oeprator has loans secured against the trustee.
Customer feedback is "interesting" to say the least and that's before they are about to make major cutbacks on staff. https://nz.trustpilot.com/review/www.sharesies.nz
After reading quite a lot of those reviews there's no way I would invest through them.
Quote from: Basil on Feb 03, 2023, 04:08 PMCustomer feedback is "interesting" to say the least and that's before they are about to make major cutbacks on staff. https://nz.trustpilot.com/review/www.sharesies.nz
After reading quite a lot of those reviews there's no way I would invest through them.
Small sample size - but enough to at least cause me to dust off my barge pole.
Quote from: Basil on Feb 03, 2023, 04:08 PMCustomer feedback is "interesting" to say the least and that's before they are about to make major cutbacks on staff. https://nz.trustpilot.com/review/www.sharesies.nz
After reading quite a lot of those reviews there's no way I would invest through them.
For several years I volunteered on a large user help board for a very well known social media site. Many of those negatives feedbacks smack of the stock standard scammer trying to gain access to someone elses account with the old lost my access stuff, of trolls, etc. People saying things like share transfers take weeks. I've done quite a few on Sharesies. Some happen within an hour, never had one take longer than next day. I agree the feedback does not look good, but as an actual user I can only disagree with most of the negatives.
Interesting article in BusinessDesk this morning updating on Sharesies.
Key points include:
Sharesies completed an oversubscribed raise of $20 million, valuing the company at $750 million.
They have been cash flow positive ($500k/month) since March. Annualised revenue is $71m ($28m in FY2024.)
They have 880,000+ people with accounts, including 100,000 in Australia.
Chair Jon Macdonald wants to counter the view that Sharesies is "for beginners" — they have 1,500+ investors with portfolios over $1m.
An IPO remains a "future option", but there are "no current plans."
Quote from: Hectorplains on Oct 10, 2025, 10:42 AMInteresting article in BusinessDesk this morning updating on Sharsies.
Key points include:
Sharesies completed an oversubscribed raise of $20 million, valuing the company at $750 million.
They have been cash flow positive ($500k/month) since March.
Annualised revenue is $71 ($28m in FY2024.)
They have 880,000+ people with accounts, including 100,000 in Australia.
Chair Jon Macdonald wants to counter the view that Sharesies is "for beginners" — they have 1,500+ investors with portfolios over $1m.
An IPO remains a "future option", but there are "no current plans."
Another Wellington success story there, follows in the footsteps of Weta Digital, trademe & Xero. Quite a few more recent tech startups in Wellington finding success as well: Henry, Storypark, Totora are some I have heard about recently growing pretty fast and attracting overseas investors.