How Acorns and Stockspot could change your financial future - The Emporium Barber

How These Two Apps Could Change Your Financial Future

How Acorns & Stockspot Works 

Remember that big empty bottle of whisky your grandad used to keep his spare change in, and when he emptied it the whole stack of coins equated to $237.70? Well, times have changed. As a generation that finds it notoriously difficult to save money there are robo-advisors and investment apps out there that can help you, with automated investing. Robo-advisors have been successful in the US and Britain and are automated investment advice and fund management services that have minimum human intervention. All you have to do is complete your personal details, advise on investment goals and your personal situation and what kind of risk tolerance you want and the robo-advisor will recommend a portfolio of exchange-traded funds (EFTs) to invest in.

How An EFT Works

An EFT is a shopping basket of securities that contains bonds, stocks, commodities or even a combination of these on the Australian Stock Exchange (ASX). They are popular because they are simple, relatively cheap and give the investor access to a diversified product. You merely buy or sell them through a broker.

We take a look at two of the most popular micro-investing platforms on the market – Acorns and Stockspot – and see what they have to offer.


“From little things big things grow,” so sang Paul Kelly, and this is how you can envisage the spare-change investment app called  Acorns, that works as a smartphone app. Founded in the US by father-son duo, Jeff and Walter Cruttenden. It was launched in August 2014 and is part robo-advisor, part automated savings tool that targets beginner investors. 

Investors can make small investments that will add up over time, with the beauty of the product being it will help you jump start an investment strategy even If you don’t have much money. So, you can turn your spare change into investments, giving you the power of investing small sums of money.

How it works is pretty simple: you let the app link up to your bank account and credit cards and every time you make a purchase, the app rounds-up your purchase in your Acorns investment account. A minimum account balance of $5 will kick-start your Acorns account off.

So, if you purchased a pair of Armani jeans that total $120.40 then head off and grab a latte at $4.50 the app will add .60c from your jeans, and .50c to be invested in a diversified Exchange Traded Fund (EFT). Once this amount totals $5, it is invested in your EFT of choice. You also have the capacity to have a direct set amount deposited on a daily, weekly or monthly basis. These can amount to as little as $5.

Acorns have five different EFTs you can invest in, ranging from conservative to aggressive, so it is up to you what kind of risk you are prepared to take with your pocket change. What we like about the Acorns concept is that it kind of forces you into getting into a saving habit, without really getting you into the habit. You just set your round up figure and carry on living life as normal; it’s not as if you are going to miss the 20c round up after your purchase of that Mars bar, is it?

"People generally associate investing with lots of dollars.
"Once [people] find out that you can invest spare change, it's a really attractive concept."
- Jeff Cruttenden, co-founder and CEO of Acorns.

Australians have really taken to the product as they realise it is a powerful investment tool that will make them save when normally they would not.

You need to be aware that there are tax implications for using these kinds of apps. You will be liable to pay capital gains taxes, and Acorns doesn’t offer tax-loss harvesting assistance that some robo-advisor apps do. In that we mean they can reduce capital gains taxes by harvesting losing investments to offset any gains from winning ones.

At the time of writing, Acorns was only available as an iOS or Android app.

How Acorns Fees Work

Of course, investing your money isn’t free, and Acorns management fee is $1.25 a month on balances less than $5,000 and 0.275% per annum for over $5,000. You might think the $1.25 fee doesn’t sound much, but it all adds up when you have a small balance. If your round-up amount totals $12.50 for the month and Acorns takes away $1.25, that’s 10% of your contribution gone. However, the more you are spending (that is round-up) the fee goes down. If you are a student, there are no management fees for four years for college students with a valid .edu email address.


Stockspot is Australia’s largest and fastest growing digital investment advisor and fund manager. Pretty much the same setup concept as Acorns, Stockspot gets to know you so they can work out the best investment strategy for your circumstances, then they create the right mix of assets for your portfolio. However, with Stockspot you receive a Statement of Advice and an annual review of your situation; it’s up to you to select an investment strategy with Acorns.

Unlike Acorns, the minimum investments are set at $2,000 and are free from management fees for the first six months if you invest under $10,000. The company boasts that it does not try to beat the market, with their strategy concentrating on long term returns for the investor.

“We also know investors are likely to chase things that have been popular in the past, but that doesn’t guarantee they’ll do well”
– Chris Brycki Stockspot founder

They automatically rebalance your portfolio without charging brokerage fees, and you will notice over time your initial target mix will change as some investments perform better than others. Their rebalancing model was developed by Nobel Prize winning economists.

If you invest $50,000 or more you get greater control to chose investment themes you care about; with Acorns you choose one of five portfolios, while all dividends are paid directly into your account. When it comes to fees if you invest up to $10,000 it will cost you $6.60 a month, 0.792% up to $50,000 and reduces the higher you go.

Like most things involving money and investing you need to determine what is best for you. Just because investing in savings has worked out for a mate you need to be wary that it may not work out for you, and you should ensure you are aware of tax implications.

If you plan to do so, it would be worth your while in getting professional financial advice, and you can read about Australia’s best financial advisors here.

Trent Pridmore
Trent Pridmore


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