Raiz Investment: Is It A Safe Bet?

Raiz is a micro-investing platform and app that allows users to invest their spare change in exchange-traded funds (ETFs). It was one of the first micro-investing apps to launch in Australia back in 2016 and has since expanded to Indonesia and Malaysia, with plans to expand to Thailand and Vietnam. The app is fully supported by the Australian Securities and Investments Commission (ASIC) and employs bank-level security and artificial intelligence technology to keep users' personal information safe. However, some users have expressed concerns about the security and trustworthiness of the company, as well as the high fees associated with the app. So, is Raiz a safe investment?

Raiz's security and encryption

Raiz is a micro-investing platform that allows users to invest their spare change in exchange-traded funds (ETFs). It is one of the first micro-investing apps to launch in Australia, with over 600,000 accounts as of November 2022.

While Raiz is a popular investment platform, some users have expressed concerns about its security and the safety of their investments. Here is an overview of Raiz's security and encryption features:

Security and Encryption

Raiz employs bank-level security and artificial intelligence technology to protect users' personal information on its servers. This ensures that users' data is secure and cannot be accessed or compromised by unauthorised individuals.

Additionally, Raiz operates in the cloud, which means that your account and investments remain safe even if you delete the app or switch to a new device. The cloud-based system also ensures that automatic round-ups and recurring deposits continue to be processed even if the app is not installed.

Independent Custodian

Another layer of security is provided by Raiz's use of an independent custodian, Perpetual Corporate Trust Limited. This means that even if Raiz ceases to exist, your investments are still held in trust by the custodian, ensuring that your assets are protected and your money is returned.

Regulation and Compliance

Raiz is fully supported by the Australian Securities and Investments Commission (ASIC). This regulatory oversight means that in the event of a breach or loss of funds, ASIC holds Raiz liable for your money. This provides users with an added level of protection and peace of mind.

Risk Considerations

While Raiz employs robust security measures, it is important to understand that all investments carry some level of risk. The specific risks associated with investing in Raiz products are outlined in the Product Disclosure Statement (PDS), which users should carefully review before making any investment decisions. It is also recommended that investors consult with a licensed adviser to fully understand the benefits and risks of any investment product.

Trustworthiness and safety of investments

The trustworthiness and safety of investments are important factors to consider when choosing a financial platform. Raiz, a micro-investing platform, offers a range of features that aim to provide a secure and trustworthy experience for its users.

One of the key concerns for any investor is the safety of their funds. Raiz holds user funds with an independent custodian, Perpetual Corporate Trust Limited, which means that even if Raiz ceases to exist, the assets associated with your investments will still be held in trust by the custodian. This provides a level of security for investors, knowing that their money is protected. Additionally, Raiz employs bank-level security and artificial intelligence technology to safeguard users' personal information on their servers.

Raiz also offers a range of investment portfolios to suit different risk profiles, from conservative to aggressive. Users can choose to invest in exchange-traded funds (ETFs), shares, and even physical units in real estate. The platform is designed to be accessible to novice investors, with no background knowledge of financial markets required. However, it is always recommended that investors consult a licensed financial adviser before making any investment decisions to fully understand the associated benefits and risks.

While Raiz provides a secure platform, there are some considerations to keep in mind. One concern raised by users is the annual fee of around $30, as well as a monthly maintenance fee for accounts with less than $15,000. These fees can impact overall returns, especially for smaller accounts. Additionally, there have been mixed reviews of Raiz's customer service, with some users reporting issues with their responsiveness and evasiveness in addressing queries.

In conclusion, Raiz offers a range of features that promote the trustworthiness and safety of investments on its platform. The use of an independent custodian and bank-level security measures provides a level of protection for user funds and personal information. However, as with any investment, there are inherent risks involved, and it is essential for individuals to carefully consider their financial situation and risk tolerance before making any investment decisions.

Performance and customer satisfaction

Raiz, previously known as Acorns or Acorns Australia, is a downloadable smartphone app that allows users to invest their spare change in exchange-traded funds (ETFs). It was one of the first micro-investing apps to launch in Australia in 2016 and has since expanded to Indonesia and Malaysia, with plans to enter Thailand and Vietnam. As of November 2022, Raiz hosted over 600,000 accounts, had more than 280,000 active users, and managed over $1 billion in funds.

One of Raiz's key selling points is its accessibility. The app is designed to be user-friendly and does not require users to have any background knowledge of financial markets or trading. Users can start investing with as little as $5, and the app offers a range of predetermined portfolios to choose from, catering to different risk profiles. Raiz also provides features like "Round-Ups," which allow users to multiply their savings by investing their spare change.

However, despite its popularity and positive features, Raiz has also received negative feedback. Some users have reported issues with customer service, describing the team as "evasive" and "slow to react." There are also concerns about high fees, especially for newer or smaller investors. The app charges a monthly investment fee of between $4.50 and $5.50, which can be a significant percentage of a small portfolio. Additionally, accounts with less than $15,000 are subject to a monthly maintenance fee of $3.50.

Security and trustworthiness are other areas of concern for some Raiz users. While Raiz employs bank-level security and encryption to protect users' personal information, there are still doubts about the safety of investing through the app. All investments carry some risk, and users worry about the potential loss of their funds if Raiz were to cease operations. However, it is important to note that Raiz uses an independent custodian, Perpetual Corporate Trust Limited, to hold users' investments. This means that even if Raiz went out of business, users' assets would still be safely held by the custodian, and the value of the ETFs would be returned to the investors.

Fees and costs

Raiz is a micro-investing platform and app that allows users to invest their spare change in exchange-traded funds (ETFs). It is a simple and accessible way to enter the stock market, with no limits on deposits or withdrawals.

Raiz's fees have been a point of contention for some finance commentators. 'The Barefoot Investor' author Scott Pape has described the app as a "great introduction for novice investors but ultimately...after a certain point [its] fees are too high for what amounts to a cute index fund app".

There is an annual fee of around $30. For accounts with less than $15,000, there is a monthly $3.50 maintenance fee but no account fee. Accounts with $15,000 or more won't be charged a maintenance fee but will be charged an account fee of 0.275% per year. The investment fee is between $4.50-$5.50 per month, which can be a large percentage of a newer investor's portfolio.

If you only put in a small amount of money, you pay a higher management fee. The fees are dependent on the amount of your investment.

One user on productreview.com.au said that the annual fee is a "small drawback" and "if you're working, [have] linked your accounts, and are rounding up, you won't mind".

It is important to note that Raiz is not the cheapest product on the market, and there are other micro-investing apps available, such as Spaceship, which is fee-free for deposits under $5000.

Features and benefits

Raiz is a micro-investing platform that is delivered via a downloadable app. It allows users to invest their spare change in a selected mix of exchange-traded funds (ETFs). It is based on the principle that regular investing, even in small amounts, can lead to big savings over time.

• Raiz is easy to use and requires no background knowledge of financial markets or trading.
• It offers a range of ready-made investment portfolios to choose from, including conservative, moderately conservative, moderate, moderately aggressive, aggressive, and emerald (ethical investment).
• There are no limits on the number of deposits or withdrawals, and these can be made at any time.
• The app offers automatic round-ups, allowing users to contribute money to their Raiz portfolio as frequently as they like.
• It is possible to invest very small amounts of money, with as little as $5 being enough to enter the market.
• The app offers discounts on a wide range of products, from shoes to airfares, where users can get up to 10% off.
• Users can buy physical units in a trust, i.e., shares in real, physical houses.
• The app employs bank-level security and artificial intelligence technology to keep users' personal information safe.
• Raiz is fully supported by the Australian Securities and Investments Commission (ASIC), meaning that in the event of a breach or loss of funds, they are liable for users' money.
• If Raiz ceased to exist, an independent custodian, Perpetual Corporate Trust, will still hold the assets associated with users' investments in trust, so their money is returned.

Frequently asked questions