After ASIC issued a stark warning to people using retail broking services to try their hand at day trading, Six Park co-founder Pat Garrett makes a clear case for robo-advice and the need for greater accessibility for investors.

Speaking to Financial Standard, Mr Garrett said he was disappointed to see so many hobby day traders losing money in the markets.

“I wasn’t surprised that the numbers increased but I was very surprised at the magnitude of the increase,” Garrett said.

“What was so distressing about it was seeing three to four times the number of accounts becoming active every day and the holding period for the stocks being purchased compressing to one day.”

Six Park has now lowered its minimum investment to $5000 from $10,000 and is waiving investment management fees for three months.

“There’s too many people that aren’t accessing the services that are available to help them with their investment management,” Garrett said.

Six Park has a direct to consumer offering but also works with financial advisers.

“To get our service capabilities available to advisers to serve a much broader client base than they do now with their holistic advice, it would be helpful for the regulators to further clarify some of the guidelines around how scaled personal advice could work,” Garrett said.

He pointed to J.P. Morgan, Goldman Sachs, BlackRock, Charles Schwab and Fidelity overseas each offering a low-touch, low-cost digitally led investment management service as proof of its potential value in Australia.

“The advice gap was realised overseas years ago and as a result robo is managing hundreds of billions of dollars of assets for consumers overseas,” Garrett said.

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Published May 7, 2020

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