InvestSMART

The Process

When you BPAY your funds before 6 pm on a business day, they will typically arrive in our PMA Trust Account the following business day.

We will email you that we have received your partial or total funds, depending on the amount you have sent.

Once we have received the total funds for investment, we will then send your funds to the share brokerage account opened in your name. This transfer typically takes overnight as well.

When your funds arrive at the share broker the next business day, we will begin to purchase holdings in line with your chosen portfolio.

Once the shares/ETFs have settled (T+2), we will enable the online platform for you to view and administer your holdings. We will send you a welcome email explaining how to access the online platform.

This process takes about 4-5 business days from when we receive your total funds.

Why does it take 4-5 business days and not immediately?

We're proud to offer low and capped management fees for our InvestSMART investment products. At the heart of everything we do, our purpose is to make investing rewarding, accessible and affordable.

To keep fees low and capped, we take a process-driven approach. For instance, our trading team can keep costs down by trading once a day during a specific period. This means that funds received are actioned the following business day.

Settlement periods

As with any ASX listed share or ETF, there is a two business days settlement period. The ASX explains this here. This settlement period means your holdings won't settle until two days after the transaction takes place.

Your investments are held in a CHESS sponsored brokerage account. This adds an extra layer of protection and can offer more tax advantages as you can transfer holdings to your share trading account and not be forced to sell them. However, this means that getting funds from your bank account to the brokerage bank account adds an extra step. We are in the process of investigating CMA accounts to improve this.

Withdrawals typically take 4-5 business days from the day you verified the withdrawal request.

Because of the delay with data reflected in the My Account section, you may see your cash component in your PMA larger than usual.

This increased cash holding is temporary and shows that the cash has been 'freed up' and will shortly be sent to your nominated bank account.

Why does it take 4-5 business days and not immediately?

We're proud to offer low and capped management fees for our InvestSMART investment products. At the heart of everything we do, our purpose is to make investing rewarding, accessible and affordable.

To keep fees low and capped, we take a process-driven approach. For instance, our trading team can keep costs down by trading once a day during a specific period. This means that withdrawal requests that are verified and submitted are actioned the following business day.

Settlement periods

As with any ASX listed share or ETF, there is a two business days settlement period. The ASX explains this here. This settlement period means your funds won't be available until two days after the transaction takes place.

Your investments are held in a CHESS sponsored brokerage account. This adds an extra layer of protection and can offer more tax advantages as you can transfer holdings to your share trading account and not be forced to sell them. However, this means that getting funds from your brokerage bank account to the InvestSMART bank account adds an extra step. We are in the process of investigating CMA accounts to improve this.

What can I do to help?

Please be aware of the four to five day withdrawal period and factor in potential public holidays that may extend the process. 

Related topics

The InvestSMART Capped Fee Diversified Portfolio range invests in Exchange Traded Funds (ETFs) across a range of different asset classes including Australian shares, international shares, cash, fixed interest, property and infrastructure.

ETFs are great for managing risk, keeping costs low and providing a diversified portfolio.  

Our range of diversified portfolios focus on investing over several asset classes in different proportions to provide different risk vs. return profiles tailored to suit the requirements of all investors.

So, how do you know which portfolio to invest in?  

The core investment philosophy at InvestSMART focuses on the principles of diversification, low fees and investing for the long term. Exchange Traded Funds (ETFs), in comparison to unlisted managed funds, provide a cost-effective method to ascertain these goals. They also have liquidity benefits, being easier to buy and sell at short notice.

ETFs provide broad diversification by only needing to purchase a small number of securities. In contrast, when buying and holding hundreds of individual securities to achieve a similar level of diversification, greater costs are incurred in brokerage and fees – imagine the brokerage to buy 200 individual stocks!  

ETFs are also great for managing risk. When you invest in an ETF, you lessen individual company risk and sector risk. By holding a basket of individual stocks, you are not limiting your exposure to individual sectors of the market. 

In using ETFs, InvestSMART has the capacity to pass on these lower costs to the investor in the form of capped fees and low-cost investing. As fees compound over time, even a slight increase in fees can result in substantial differences to your return. 

You can read more on ETFs here.

We invest across a broad range of asset classes, as no one individual asset class is guaranteed to deliver substantial and consistent performance – once again it comes back to one of InvestSMART’s core principles of diversification.  

Cash 

 Provides protection against the volatility of markets in times of market downturns. Why is there cash listed in my portfolio? 

Bonds 

As a defensive asset, bonds provide a consistent income. They are less volatile in comparison to equities. 

Domestic Equities 

Delivers strong returns over the long term, even when considering exposure to global and domestic downturn. Share value often fluctuates in the short term. 

International equities 

Australian shares make up a mere 2% of the globes total market capitalisation. International equities provide access to potential returns in sectors that are underweighted in the Australian equity market (such as technology) and additional diversification benefits.  

Property & Infrastructure 

Provides growth in line with inflation, or real income growth and is less volatile in comparison to equities. 

Full holdings for each portfolio can be found here, under Investment Preferences:

  1. On the portfolio you are interested in, select 'learn more'
  2. Scroll down to 'key facts'
  3. Select the subheading called 'holdings'

From here, you will be able to see asset allocation by percentage, and also a comprehensive list of the holdings. 

How InvestSMART manages risk

Unfortunately, there is no way to completely avoid risk. As such, we opt to manage risk instead. The best way to mitigate risk and achieve better long-term risk-adjusted returns is through the process of diversification

We manage the portfolio's risk by maintaining and rebalancing the portfolios in line with the associated risk profile mandate. The risk profile mandate also corresponds with the recommended time frame.

Over time, with an adequately diversified portfolio, it is still possible to achieve an acceptable return. This is based on research by Nobel Prize-winning economist, Howard Markowitz, on the Modern Portfolio Theory. His theory demonstrates how you can combine numerous assets with different volatilities to minimise overall portfolio volatility.

When one portion of your portfolio is performing poorly, another is expected to be performing above average and balance out the negative effects of the asset lacking in performance.  

How investors can manage risk

Investors can manage risk by investing in a portfolio that is suitable to meet their goals and timeframe. Each of our portfolios has a mandate that explains the risk profile and suggested timeframe, which can be found here

Diversification in line with adhering to the investment timeframe significantly reduces the risk on your portfolio. 

InvestSMART offers a range of model portfolios that investors can choose from, which may fit their self-determined risk profile. There are a number of tools that can be used to get a better understanding of your risk profile.

Whilst we do not manage risk on a client-by-client basis, we do manage risk when selecting securities for these models.  

Diversification is all about managing risk. To put it simply, diversification means spreading your investment risk across a variety of assets and asset classes. This way, if one asset or asset class performs poorly, your other investments help to offset this poor performance, protecting your capital. The more uncorrelated assets and asset classes you invest in, the less risk you face of an underperforming asset damaging your overall return. This is where the use of ETFs comes into play - they provide a means to diversify across asset classes; and also are well-diversified within asset classes. 

Diversification can seem complicated to some investors – but this doesn’t have to be the case. There are currently lots of options available for investors who want to diversify but need a little bit of help in doing so. At InvestSMART we offer a range of already diversified portfolios that you can use to complement and diversify your existing investments or use as a total portfolio solution.   

Building a diversified investment can sound intimidating. However, the process isn’t as complex as it seems. To help you out, InvestSMART has developed a variety of tools and resources. Our Portfolio Manager allows you to track your assets and monitor your net wealth. You can also use the InvestSMART HealthCheck tool to help understand how well diversified your portfolio is, and whether your asset allocation is appropriate in achieving your desired financial objectives.