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Sharesies Kids Accounts Review

We review Sharesies Kids Accounts, the dedicated offering that has zero membership fees, 5,000+ investment options, auto-invest options and, most importantly, the option of parental control (up to age 25)
Updated 16 May 2023

Summary of Sharesies
  • Sharesies' Kids Accounts launched in early 2021, offering the benefits of the core Sharesies service without ongoing membership fees. 
  • Investing options include over 136 NZX-listed companies, 36 NZX ETFs, 8 Managed Funds (unlisted), 1852 ASX-listed companies, 228 ASX-ETFs, 2200+US-listed companies and 770+ US ETFs.
  • There is no minimum investment - you can invest from as little as 1c into any fund, ETF or NZX, ASX and US-listed company. Investors manage their portfolio via the Sharesies website.
  • Sharesies offers a dedicated auto-invest function for Kids Accounts, known as a Kids Order. This splits deposited money into four funds managed by AMP, Pathfinder (an ethical fund manager, and manager of two of the Kids Order funds), and Smartshares.
  • Sharesies is cost-effective for Kids Accounts with small balances, with no annual fees or minimum order fees.
  • Managed funds charge annual fees (usually 0.30% to 1.30%, depending on the fund), which are deducted from any returns by the fund manager - you won't see separate charges in your Sharesies balances.
  • From the perspective of user experience, Sharesies goes beyond all expectations and delivers a friendly platform that is rich in design while making investments easy. The offering is unrivalled by way of investment choice among competing investing platforms.

​Our Review
In this guide, we outline what Sharesies is, what shares, ETFs and funds they offer to young New Zealand investor, the pros and cons of Sharesies, and the fees. We cover:  
Disclaimer: MoneyHub is not a Financial Adviser, and this guide has been published to explain investment fundamentals and outline the pros and cons of Sharesies as an investment platform.

Warning: "Investor" Facebook Groups, Instagram Influencers and Whatsapp Groups
  • Media reports have cited the existence of Facebook groups that discuss companies to invest in. The "advice" given is, most likely, not sufficiently reasoned to constitute any form of financial advice. We ask potential investors to be careful of following "tips" and "exclusive insights" etc. that suggest investing in a particular share.
  • Our view is that you should never invest in something just because you read it on Sharesies-related (or unrelated) social media communities. As this article states - "trading data seen by Stuff shows that Sharesies investors make up a disproportionately high percentage of trades in small-cap stocks, and they've lost a lot of money in the process".
  • We believe that while most Sharesies members invest in robust companies, MoneyHub is aware of the existence of speculative behaviour and has also been quoted in Stuff.co.nz regarding unproven, small-cap investments.
  • Please be very careful - investing in unknown companies and losing money is emotional and gives the opposite experience that long-term investing offers. If you are unsure what to invest in, our guide to investments you can own forever has must-know information.
Related guides:
  • Worried about what happens to a child's investment if Sharesies collapsed or shut down? Our easy to read custodian guide explains what you need to know.
  • Investing for Kids platforms are increasingly popular - our dedicated guide explains all the options
  • Want to know how to trade or invest in the NZX? Our NZX in a Nutshell guide explains what you need to know.
  • Want to compare ETFs with shares? Our dedicated ETFs vs Shares guide has you covered.
  • Want to know about ethical investing and the opportunities available? Our ethical investing guide has you covered.

The Specs of Sharesies Kids Accounts

For the purposes of this review, we cover the New Zealand-orientated shares and funds:
  • ​Shares on Offer: Over 136 NZX-listed companies, 36 NZX ETFs, 8 Managed Funds (unlisted), 1852 ASX-listed companies, 228 ASX-ETFs, 2200+US-listed companies and 770+ US ETFs. (our comparison of Sharesies, Hatch and Stake is outlined here). 
  • ​Portfolio Management: Sharesies offers a member-login via their website and phone app for day-to-day investing and portfolio management. Investors can continuously track their investments with either tool.

The fees are as follows: 
  • NZ Shares: Fees are 1.90% with a $25 NZD cap (which will apply for any trade above NZ$1,316).
  • US Shares: Sharesies members have access to an additional 4,000+ companies and exchange-traded funds (ETFs) across the New York Stock Exchange (NYSE), Nasdaq, and Chicago Board Options Exchange (CBOE). Transaction fees are simple: 1.90% (with a US$5 cap; there is also an exchange fee of 0.5% between NZD and USD. Our Sharesies vs Hatch vs Stake Guide outlines the offering in detail, and how it compares to alternative platforms.
  • Australian Shares: Sharesies members have access to 2,000+ Australian shares and ETFs. Like US shares, transaction fees are simple: 1.90% with a AU$15 cap. There is also an exchange fee of 0.5% between NZD and AUD.
  • Sharesies has an auto-invest feature that lets you set-and-forget investments into a Global, Responsible, or DIY order. There’s also an order suited to kids, only available via Kids Accounts.

Investment Products include:
  • Cash (i.e. bank deposits in New Zealand banks)
  • New Zealand Fixed Income (i.e. investments in government bonds or company debt)
  • New Zealand Shares (i.e. shares in Spark, Fletcher Building and Air New Zealand), NZ ETFs and NZ managed funds (unlisted)
  • Australian Shares (via the ASX, ETFs and managed funds)
  • US Shares and ETFs
  • International Fixed Income bonds and deposits (via index funds)
  • International Shares (via index funds, or purchasing US shares directly)

Setting up a Sharesies Kids Account

  • To sign up for a Kids Account, you don’t need to be the kid’s parent or caregiver. But you’ll need an adult’s Sharesies account to link the Kids Account to. The adult Sharesies account doesn't need to have any investments.
  • You’ll need a proof of address and a form of ID, as well as the child's IRD number. This guide from Sharesies has more specific details. 
  • You can then deposit money, set up auto-investing and use any other functionality offered by Sharesies.

Understanding the Rights and Obligations when Investing on Behalf of a Child via Sharesies Kids Accounts

When you sign up for a Sharesies Kids Account, you do so on behalf of a child, and all money invested becomes the property of the child. To help explain this better, Sharesies has expanded the relevant Kids Account terms and conditions.

Setting up a Kids Account:
  • Kids Accounts are for anyone under 18 years of age.
  • As an adult, you'll need to have a separate Sharesies account in your name (as trustee) for saving and investing money on behalf of a child.
  • When you apply to create a Sharesies Kids Account, you must confirm your intention to establish a "bare trust" for the child. This means that the named child is the beneficiary of the Kids Account. As the parent or guardian, you'll be the trustee and administer the Kids Account for their benefit.
  • Important: All money deposited into a Sharesies Kids Account is, legally, a non-reversible gift to the beneficiary (i.e. it's the child's property and theirs to keep).
  • Adults must only use the Sharesies Kids Account (i.e. deposit or withdraw money) for the sole benefit of the beneficiary.

Transferring control of a Kids Accounts:
  • Sharesies requires that at a specific transfer date, the beneficiary (i.e. child) will be entitled to the money and investments in their Kids Account.
  • The default transfer age is set at 25 years old, but parents or guardians can change the transfer age to any age from 18 to 25 years old in the settings
  • Important: once the child reaches their transfer age, the parent or guardian cannot adjust the transfer age for the beneficiary.
  • After the transfer age is reached, the beneficiary can request to take control of their Kids Account without the permission of the parent or guardian.
  • When this happens, Sharesies converts the Kids Account to an adult account in their own name. If the beneficiary does not want to take control of their Kids Account, the parent or guardian can continue to operate the Kids Account for the child's benefit.

Who are Sharesies Kids Accounts Suited to?

With interest rates at record lows, even the most generous Kids Bank Account offers very low returns. Sharesies Kids Accounts are an alternative (although a completely different category of risk) for boosting the financial security of young New Zealanders.

​Our view - Sharesies Kids Accounts are Best For: 
  1. ​Anyone looking to start building up a child's investment portfolio, paying transaction fees along the way. 
  2. No membership fees.
  3. While both InvestNow and Smartshares offer a range of funds and ETFs with no annual subscription fee, Sharesies is by far the most flexible in terms of investment opportunities. No other kids account offers so much choice, functionality and opportunity for such low fees.

Standout Features:
  1. Flexible investing with no minimum investment, perfect for children looking to get into the sharemarket.
  2. User-friendly website and app for monitoring investment performance.
  3. 170+ NZX-listed companies, ETFs and managed funds, with management fees between 0.30-1.30% (charged by the fund manager, not Sharesies).
  4. The diverse number of funds means you can focus on particular industry sectors in specific countries, such as Australian property, New Zealand property and global emerging markets.
  5. The numerous socially responsible funds (managed by Pathfinder) will likely appeal to parents looking for ethical investments.
  6. Low transaction fees for NZX-listed companies: You pay 0.5% for orders up to $3,000 and then 0.1% for amounts over $3,000. For example, a $4,000 investment would cost $16 in transaction fees ($3,000 X 0.5% + $1,000 X 0.1% = $16). A $200 investment would cost $1 ($200 X 0.5% = $1). This is significantly cheaper than the share trading options offered by ASB Securities and Direct Broking, and eliminates significant costs when buying shares.

But be aware:
  1. Certain funds not marked as “sustainable” may make investments in companies trading in weapons, tobacco, nuclear and other “unethical” business. The US 500 fund is an example of that.
  2. As is the case with any investment, markets go up and down. The Dotcom bubble in the early 2000s sank global indexes, as did the 2008 Global Financial Crisis. Shares and indexes are now at record highs, but this is no guarantee of future earnings.

The Bottom Line, Limitations and Alternatives

What We Like
  • Sharesies Kids Accounts are a simple, low-fee initiative for young investors (and their parents and guardians) to make small, ongoing contributions to benefit as adults. With thousands of options, there may be a lot of choices but managed funds, auto-invest functionality and ETFs make it a lot easier.

​Limitations
  • Very few - Customer support is limited to email, in-app and social media, and the team won’t offer any form of financial advice as to what fund(s) to invest in. 
  • Sharesies isn’t for the short term, but, arguably, neither is investing for children. While investors are free to buy and sell at any time, to get the most out of ETFs, managed funds and shares, it's realistic that the timeframe involves a 5-10 year investment plan.

Alternatives
  • Hatch Kids Investment Accounts - US-listed investments, with US$0.50 transaction fees and no membership fees
  • Child’s Account with InvestNow - managed fund and Smartshares investment options, with no transaction fees or ongoing fees (excluding fund manager fees, although these are not charged by InvestNow). As a background, InvestNow makes money by charging investment funds and Smartshares a fee to list on their platform. The benefit is that investors don't pay any additional fees and have a wide range of options.
  • Our View: Given the choice of NZX, ASX and US shares, as well as a number of managed funds, Sharesies Kids Accounts offer an unrivalled selection of investments - far greater than Hatch and InvestNow.
  • Know This: Sharesies Kids Accounts won't be for everyone, and both Hatch and InvestNow have merit in what they offer young New Zealanders.

4 Must-Know Sharesies Kids Accounts Facts

As a parent, you'll have control of the account until your child turns 25 (or 18 if you select this option)

Sharesies Kids Accounts are designed for parents wanting to invest for the long-term. For this reason, the investments are held under parental control until 25 (by default) or 18 (at the discretion of the parent).

Sharesies Kids Accounts may not always be the cheapest option for investing - there are some specialist alternatives

There are transaction fees for investments bought and sold.

Like Sharesies Kids Accounts, Hatch Kids Investment Accounts and InvestNow Child’s Account are both free services by way of membership fees. Hatch is focused on US shares, whereas InvestNow is primarily managed funds and Smartshares. 

Given the choice of NZX, ASX and US shares, as well as a number of managed funds, Sharesies Kids Accounts offer an unrivalled selection of investments - far greater than Hatch and InvestNow.

Sharesies for Kids' fund choice offers excellent investment diversification for parents reluctant to pick a specific share or sector

Sharesies offers managed funds from Pie Funds, Pathfinder, AMP Capital and Smartshares. You can also invest in ETFs rather than shares, which follow sectors or indexes, rather than individual companies. 

The benefit of a managed fund is diversification - you’re putting money into a number of companies, so if one doesn’t perform as expected the strength of other companies will balance out the bad eggs. For example, the NZ Top 50 ETF invests in the 50 largest New Zealand listed companies, so you are well diversified. Other ETFs invest in 500 or more companies, meaning you are even more diversified.

You can make regular investments via the auto-invest feature, and there's a dedicated Kids Order

If you’d like to make regular contributions to your Shares for Kids account, Sharesies makes it easy. You set the amount you want to invest/pay, the frequency (i.e. weekly, monthly) and then the start date. 

Sharesies has a dedicated Kids order - this is focused on maximising growth - with international shares (who meet ESG standards) being a major component. For more details about auto investing, Sharesles explains the features here and our ethical investing guide covers ESG in detail. 
Related guides
Other investing platforms: