Some cool new FinTech services I'm playing with

02 December 2016Matt Hilton

I've always been a bit of a finance geek.

I'm that one who spends his time poring over the fine-print in credit-card insurance PDSes.

I'm that one who floods your feed with refer-a-friend bank account offers in the hope to score free stuff.

(On occasions, friends have even told me with concern that my account had been compromised because some company has been posting ads about their investment services. Yeeeeah.... I didn't get hacked. That was me :D)

Having nerded out on investment properties, index funds, superannuation, credit card rewards schemes, frequent flyer programmes etc for the past 10 years or so, I've been across most if not all of the consumer-focused mechanisms for investing your money and hacking your financial life towards success. I've also been dismayed at some of the awful gaps in the market, which, especially around financial services and investment, is still based on a world where the "magical finance people" keep all the knowledge locked away, far out of reach of the everyday consumer.

It kills me.

I've been thinking and scheming for many years on different approaches that could be taken to finances and investment to unlock diversification to those with smaller amounts to invest (typical managed funds entry amounts are ~$5k for high-fee retail, or ~$500k to access lower-fee wholesale funds!!!), and democratise investment. Minimum amounts need to go away, fees should be low, diversification should be the default, and automation should be built in.

That's why I was so thrilled to stumble across a new service recently - it addresses every single one of these points above. No minimums. Automatic diversification. Low fees. Automatic investing.

It is so awesomely aligned with what I've been hoping for, in fact, that a close friend actually commented "Did you build this, or did they steal your ideas? This is exactly what you've been talking about!"


The service I'm talking about is called Acorns (yes, that's a refer-a-friend link ;)).
Their term for what they offer is "micro-investing".

Acorns allows you to invest with near-to-no minimums ($5 min), invests in low-fee index funds (cheap and automatically diversified), and automates the investing process. They also have a killer "round-up" feature, where you can link your spending card account (credit or debit), and they tally "round ups" over the week. You buy a coffee for $3.50, they add a 50c round-up to your tally. You can configure how aggressive the round-ups are. Once your tally hits $5, they automatically pull $5 from a separate nominated account (or it can be the same one) and invest it.

To top it off, it's backed by an incredibly user-friendly website and app. The sign-up process is a breeze.


No advisers, no restrictions, no pressure, no trailing commissions. You have control, and automation makes it so easy that investment happens without you even thinking about it.

I've been running it for a few months, and my account balance has just tipped over $200 primarily from round-ups. Nice!

Of course, the underlying investment here is in the stock-market. That means it's higher-risk than cash investment, and should be looked at as a medium-to-long term vehicle. This isn't a savings account. And I'm not an adviser or qualified financial person either, so take my ravings with a grain of salt and make your own decisions :)


Another really cool one I was referred to by a friend is BrickX. This one is particularly interesting for Aussies, who seem to have an unreasonable expectation and belief in the stability and performance of housing and retail real-estate. That aside - BrickX is a really innovative service that allows you to diversify in this typically illiquid, concentrated market, whilst still maintaining the sense of tangible & personal property ownership that is lost when investing via REITs or real-estate-focused managed funds.

BrickX uses a crowd-sourced approach to purchasing property. They have a procurement and management team who analyses the market and finds individual properties to purchase which they believe will provide average to above-average returns. You can then invest by buying a "brick" in the house. This is effectively a share in the cost and ownership of the property. You get monthly dividends paid, regular revaluations and updates on the value of your bricks.

This all works via a BrickX's private marketplace. You can buy a brick in one of two ways - when a new property is up for initial offer, or when an existing brickholder is wanting to sell the number of bricks you'd like to buy. Brick prices are therefore subject to supply/demand pricing.

A BrickX investment is potentially less liquid than a comparable investment in a REIT/managed-fund, because you rely on someone wanting to buy the bricks you want to sell in order to cash out. This is very similar to stock market investment, but on a much smaller market scale which increases liquidity risk. You also incur the risk that one or all of the properties on the BrickX platform are mismanaged and lose some or all of their value. This is the trade-off you need to weigh up vs full-blown property investment or real-estate-focused managed funds.

Again - not an advisor, and none of this is advice. Just a finance fanboi.


What I love most about these startups is that they're focused on taking the power away from the traditional big players in finance. They seek to break down misconceptions that investment is "too risky" or "too hard", that "property is a sure-bet" etc. They democratise financial knowledge by educating their customers, and bringing the minimum investments down to amounts manageable by every-day people. You don't need a degree in economics to invest in these vehicles. You definitely should spend time learning and understanding how they work though.

Overall, these new FinTech companies are incredibly exciting to me. I can't wait to see what comes next, and see these kind of platforms hit the mainstream!