Investment administration firm Link Market Services could offer investors access to a range NZX-listed funds via its just-launched online broking platform, according to the group’s head of business development NZ, Stan Malcolm.
The Link ShareMeUp mobile app, first reported here in March, currently offers investors a relatively cheap way to accumulate holdings in a range of 14 NZX-listed stocks including the Salt Funds Management Carbon Fund.
Malcolm said while the first tranche of NZX securities available on ShareMeUp are mostly mainstream firms, Link would look to add more over time with the potential to bring on other exchange-traded funds and listed investment companies.
“We have the ability to buy listed funds… and we’re in talks with the NZX [re its Smartshares range],” he said.
ShareMeUp investors drip-feed a minimum of $50 each week, fortnight or month into one or more of the approved NZX securities. Link aggregates the orders into a wholesale broking deal, automatically allocating individual holdings across through its registry system.
For the time-being ShareMeUp will only offer access to NZX-listed companies using Link as registry – an arrangement that underpins the administrative efficiency of the new equities-buying service. Link provides registry to about 100 of the 180 NZX main board stocks, including the 30-odd Smartshares exchange-traded funds (ETFs).
As well as top 50 firms like Auckland Airport, Spark and a2, the current ShareMeUp list also includes the recent start-up cannabis company, CannaSouth.
Stock liquidity would be a factor limiting what other companies join the service, Malcolm said.
Brokerage ranges from a minimum of 99 cents per trade to 1.98 per cent plus a ‘merchant fee’ (fixed at $1 plus a 0.1 per cent variable charge component) to cover the outsourced cash transactions.
Malcolm said the total ShareMeUp costs become more cost-effective if clients invest in more than one company. For example, an investor putting $50 each into six stocks would incur brokerage of $5.94 and a merchant fee of $1.30 compared to minimum $90 for a traditional broking service (based on six trades at $15 per).
He said ShareMeUp also avoids ongoing custody costs (of a minimum $15 each month) as clients hold all securities directly.
The new Link service, which also feeds into NZX data feed supplied by Auckland firm Reap, is targeting savvy share investors who favour dollar-cost-averaging strategies, Malcolm said.
However, ShareMeUp is a buyers’ market only: clients must find their own broker to sell shares, incurring extra costs.
“The whole purpose is to give another option to more easily invest in NZ shares, rather than sell,” he said.
Link may look at providing a sell service at some point, Malcolm said, with the potential to also add offshore stocks in the future.
The ShareMeUp venture is the first of its kind for the ASX-listed group, which has a strong presence in its home base of Australia and in the UK.
In a release, Link NZ head, Marcelle Ashcroft, said, the company “is committed to continuing to position ourselves as leaders in the market when it comes to developing innovative ways to meet clients’ needs”.
Malcolm said ShareMeUp already has signed up a number of users.