FirstStep - A Mobile App That Lets You Invest Your Loose Change

AssociatedLshirajdesilva @ FirstStep on 19/09/2015 - 19:08

My team and I are working on a new fintech startup, called FirstStep, around a mobile app that lets you invest the loose change from your everyday electronic transactions into a diversified investment portfolio.

If you buy a coffee for $3.50, we invest $0.50 in an investment portfolio, comprising ETFs.

Our fees are 1% for accounts under $2,000 and 0.25% for accounts over $2,000.

We are currently pre-launch but taking early access signups on our website below. We hope to launch Q1 2016. We are also part of the Incubate accelerator program at the University of Sydney, and have had numerous press releases.

Our website is:
https://getfirststep.com

Disclaimer: As stated above, I am affiliated with FirstStep.

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Comments

  • coyney on 19/09/2015 - 19:21
    +2

    So essentially Acorns? https://www.acornsau.com.au/

    US: https://acorns.com/

    • Associatedshirajdesilva @ FirstStep on 19/09/2015 - 20:35

      Yes, it's a similar business model. Fees, however, will be completely different. FirstStep will charge 1% per annum for balances under $2000 and 0.25% for balances over $2000. Acorns is charging a flat $24 fee (per annum) for the first $5000.

      We are applying a percentage fee so as to not impact returns for small balances. This is important as users will be investing small amounts. For example, for a $200 investment portfolio, $24 would mean a 12% annual fee.

  • Diji1 on 19/09/2015 - 20:31
    +2

    Isn't this the second time you've posted this? And just copy pasta'd it to boot.

    • Associatedshirajdesilva @ FirstStep on 19/09/2015 - 20:37

      First time we've posted to the ozbargain forum.

    • nocure on 19/09/2015 - 22:31

      Yes.. I have read this here before , posted under a different user name.

      • Associatedshirajdesilva @ FirstStep on 20/09/2015 - 18:33

        We did post a deal here a few weeks ago, but this is our first time posting on the ozbargain financial forum. You probably read it when we had our deal up. No one else has posted on the forum, under a different user name, to my knowledge.

    • ShannonIngram on 20/09/2015 - 19:34

      Yep looks like first 2 posts taken down due to sockpuppeting & being unlicenced (https://www.ozbargain.com.au/deals/getfirststep.com). They still don't hold an Australian Financial Services Licence - seems a bit weird to be marketing this service without that key part being in place.

      • Associatedshirajdesilva @ FirstStep on 20/09/2015 - 20:22
        -1

        That is correct. We are not yet authorised to operate in Australia . We are currently open for early access signup which you can do on our website . In fact, a number of similar services launching in Australia soon are pending Australian Financial Services licensing as well. This is clearly stated on our website.

  • sickllama on 19/09/2015 - 20:45

    Cool idea. I wonder if those it would benefit most (i.e. those who don't currently save and invest) would be keen though?

    • Associatedshirajdesilva @ FirstStep on 20/09/2015 - 18:29
      +1

      We hope so! We hope we've made a product, that's so simple to use, easy to sign up to, all using a mobile app, and contributes small amounts over time to encourage people to start investing in a small way. We want young people to get into investing earlier and gain from time and compounding.

  • gimli on 19/09/2015 - 21:31
    +1

    I don't think ozbargainers are the best audience for this. They think about how they spend every cent.

    I am concerned about how you track peoples bank account. Do banks really allow you to do this?

    What are expected returns?

    • spychiatrist on 19/09/2015 - 21:38

      I disagree. I like the idea. OzBers who like to transact with their paypass will have the added benefit of investing pennies (no pun intended) that accumulate over time. It's money you won't necessarily miss.

      My concern is the guarantee that the millions of cents put in by investors will not go missing (investment climate excepted)

      • Associatedshirajdesilva @ FirstStep on 20/09/2015 - 18:32

        Because each user is investing such small amounts, investors’ money will be pooled together in a registered managed investment scheme (MIS) to acquire the underlying ETFs. The user in turn will own units in the MIS according to the amount invested.

        A custodian will be appointed to hold the underlying assets of the MIS. Its core function is to safeguard the assets for the beneficial owners. The custodian is required to hold $10 million in NTA. This is intended to ensure that the custodian has sufficient financial resources to operate and to meet operational liabilities.

    • Associatedshirajdesilva @ FirstStep on 20/09/2015 - 18:36

      As stated below, when you sign up, you provide FirstStep your bank details, in a similar way to what Pocketbook and MoneyBrilliant users have been doing in Australia for years. Our software works in conjunction with your bank's technology to allow for withdrawal of your loose change. We then invest it on your behalf.

  • bion83 on 19/09/2015 - 21:50
    +1

    Sounds interesting but you have to essentially hand over your bank login details which is red flag for me.

    Unless you can build your balance with voluntary contribution without having to give access to your bank account I wouldn't even consider it

    • Associatedshirajdesilva @ FirstStep on 19/09/2015 - 23:11

      When you sign up you provide FirstStep your bank details, in a similar way to what Picketbook and MoneyBrilliant users have been doing in Australia for years. Our software works in conjunction with your bank's technology to allow for withdrawals of your loose change. There is nothing more important to us than getting this process right.

  • c64 on 20/09/2015 - 09:11
    +1

    … That Lets You Invest Your Loose Change

    yeah, it's called a bank

    if it is only a couple of cents then the returns are not going to be huge in any case …

    • Associatedshirajdesilva @ FirstStep on 20/09/2015 - 18:24

      Your loose change contributions will happen automatically, and you might even find that your loose change over time, starts adding up to something substantial after a while! You will also be able to make one-time and recurring voluntary contributions of $5, $10, etc to your portfolio, on top of your loose change contributions, so we think you can grow a fairly reasonable portfolio this way.

    • Associatedshirajdesilva @ FirstStep on 20/09/2015 - 18:26

      I suppose the whole point of all this is to remove the standard barriers to investing, like large minimums and to help you get started in a small way. We let you control your contributions and your asset allocation.

  • SlickMick on 20/09/2015 - 10:16
    +1

    I don't get it. If I invest a few cents every time I make a purchase, I'll have less money in my bank. I would rather just choose how much to invest. But why would I give you a cut?

    • blackfrancis75 on 20/09/2015 - 11:13
      +1

      The difference is purely psychological. It makes investing ( or 'saving') unnoticeable for people who have a hard time otherwise

      • Associatedshirajdesilva @ FirstStep on 20/09/2015 - 17:01

        Yes exactly! And we also let you do larger one-time or recurring voluntary contributions to grow your portfolio

  • hickman120 on 20/09/2015 - 13:00
    +1

    I like the idea but what kind of returns are we looking at here?

    What monetary benefit would there be, investing this way instead of putting the same amount of cash into a 3.5% savings account?

  • usmanyousaf on 20/09/2015 - 21:02

    I am wondering if I have lets say 5000 with getfirststep, when and how I can withdraw this if I need it at any time?

    • Associatedshirajdesilva @ FirstStep on 20/09/2015 - 21:38

      You can withdraw your full balance at any time, at no cost, and have it back in your bank account within 3-4 business days.

  • rohanp16 on 21/09/2015 - 07:06

    I think this is quite an interesting idea - sure nothing is stopping anyone from investing in ETF's on their own but it sure does seem to make it a whole lot convenient ! Especially for people who are not the most financially savvy or have psychological barriers to it. Would it be possible to choose ETF's or is it one size fit all ?

    • Associatedshirajdesilva @ FirstStep on 21/09/2015 - 20:03

      Hi! Initially we will have a number of risk-based portfolios, for example, a conservative, a balanced and an aggressive portfolio, each of which will have different allocations of 4-5 pre-selected ETFs. It might be tricky for us to let each user choose ETFs, but we will be broadening our offering into themed investment portfolios, such as ethical stocks or maybe a Warren Buffet portfolio for example.

  • AndyRates on 21/09/2015 - 09:34

    Is the capital growth taxable? Do we get a annual tax statement?

    • Associatedshirajdesilva @ FirstStep on 21/09/2015 - 20:05

      Realised capital gains will be taxable and an annual tax statement will be provided.

  • [Deactivated] on 03/11/2015 - 22:09

    How about the scenario where it doesn't make a profit this year, you make a loss -%5 negative growth - what happens then to my current investment say the balance at the moment is $1000 ?

    Also when we do get the return profits if any? Is it paid monthly like a bank or end of the year? I'm assuming it is compounding interest.

    Can you give more details please :-)

  • scotty on 10/05/2016 - 16:44

    Are these guys still around? Been 8 months since this post, an the site is still saying "Get Early Access". Most LinkedIn page on the Team page are 404.

  • hjlochtenberg on 18/08/2016 - 14:58

    Looks like they've changed their fees… https://getfirststep.com/fees/

    Same as Acorns I guess, but slower

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