Forsyth Barr launches Sharesies competitor with robo-advice

Forsyth Barr's DIY investment app Tempo charges a flat, uncapped, 0.85 per cent fee, and additional fees per funds invested in.

After more than three years in development and millions of dollars spent, major investment firm Forysth Barr has spun out an investing app to compete with Sharesies.

The app called Tempo leverages Forsyth’s existing financial advice provider licence, allowing it to make ongoing investment recommendations to users - a feature few online DIY investment services are allowed to have.

“We have established Tempo as we believe it will appeal to a broad spectrum of New Zealanders and make our expertise available to those that are working hard to accumulate wealth or achieve a financial goal.” Forsyth Barr managing director Neil Paviour-Smith said.

The app has launched to select customers by invitation-only, however, was expected to launch widely in a matter of days following regulation protocols.

Users would be required to follow all anti-money laundering regulations, such as proving their identity, and were asked questions about their risk profile and financial goals.

Based on the answers, the app recommended a mix of 15 funds for the user to invest in - some of which were managed by Octagon Investment Funds, Forysth Barr’s boutique service.

Tempo collected a flat, uncapped 0.85 per cent management fee on money invested, while additional fees were also charged per fund invested into, which varied depending on the manager and whether the fund was actively managed or not.

The user could tailor the portfolio mix, and deposit or withdraw money at any time, however the app did not allow them to have a conversation with a Forsyth Barr financial adviser.

Investor’s money would be held with the third-party custodian Adminis - the same as passive DIY investment platform Kernel.

Forsyth head of wealth development Chelsea Leadbetter said this was not Forsyth’s means of catching up to Sharesies and other DIY investing apps, rather it was a means to make Forsyth’s advice more accessible to more customers.

“I wouldn’t say it was related to competition per se ... It was really about looking at how we help more people and make it [investing] more accessible in terms of advice.

“What’s changed over the last three years or so is clearly the retail investing market. But, this idea was certainly before that.”

A survey of 1000 New Zealanders conducted for Tempo, showed the majority did not have a long-term financial plan, nor did they know how to start one.

Out of the respondents who had never invested in a sharemarket, 22 per cent did not know what companies to invest in.

“People want more confidence and fewer choices.” Blair Willems, head of Tempo, said.

He said it did not have an expectation for user sign ups.

Tempo would be operated as a subsidiary to Forsyth Barr with separate staff in different offices.