Recently, I shared a Spreadsheet that helps you decide on the best Sharesies plan for your needs for when investing in ETF funds and/or international shares.
Sharesies provide an offering for funds and individual shares from the US, Australia and NZ.
Kernel have now released their own platform for investing in US ETF’s and shares.
There are three pricing plans.
1/. The core plan. 1.5% foreign exchange rate fee on any buy or sell orders.
2/. The plus plan. $5 a month or $50 a year, plus an additional 0.6% exchange rate fee.
3/. The premium plan. $15 a month or $150 a year, plus an additional 0.4% exchange rate fee.
Like Sharesies, Kernel offer a range of pricing plans. I find Kernels pricing much simpler since it is all calculated in New Zealand dollars, and there are just less price points in general. Kernel also bundle all costs into the pricing plans. With Sharesies there are a bunch of potential costs, albeit very small, not included in their pricing plans.
However, it can still be a challenge to decide on which pricing plan is best for you.
I have saved you the time and come up with a few new calculators.
The first one is for comparing which Kernel pricing plan is best for you.
With Kernels’ pricing you want to be investing a significant amount at a time.
If you are investing anything less than $460 a month, you will be paying 1.5% in fees. The calculator only includes plan and foreign exchange rate fees too. You would have to add any other fees such as the cost of investing in a particular fund. Anything less than $460 a month, you are best in the core plan.
Anything between $460 and $4,300 a month and you are best in the Kernel plus plan. Note that even at the high end of that range ($4,300) you are still paying 0.7% in plan and foreign exchange rate fees.
Above $4,300 a month and you are best off in the premium plan.
You can play around with the Kernel fee calculator here.
Just note that Kernel are currently offering half price for their plans for the first year. The calculator provided doesn’t include that as it is the long term we are most interested in. But something worth considering when making the comparison with other comparable providers such as Sharesies or Hatch.
To make that comparison easier I have also added a spreadsheet that compares Sharesies and Hatch plans to Kernels plans. If investing less than $1,130 a month then Sharesies $3 plan tends to be cheaper. If more than $1,130 a month, Hatch tends to be cheaper. Up until $7,400 a month anyway, at which point Kernel’s premium plan is the cheapest option. Kernel cheaper than Sharesies at $1,100 to $2,300 a month and above $3,040 a month. Although Hatch is the cheapest in many instances, do note that that assumes you are investing in less than 300 shares at a time. If you are investing in more shares, then your Hatch costs will be higher than assumed which may change the results. You can see the difference extra shares make to the Hatch calculations using the calculator provided.
For one off investments, Hatch is best for all amounts between $500 and $146,000. Any one off amount less than $500 is best with the Kernel core plan, and above $146,000 is best with the Kernel premium plan.
This is just comparing the plan and foreign exchange fees. So if there are other things important to you to such as app usability, ability to invest as a trust, the funds on offer, ability to reinvest dividends or auto rebalance, then make sure to consider everything as part of your decision. In addition, there may be some minor fees with Sharesies and Hatch that you need to pay that would be included with Kernel’s plans. You can read more about Sharesies ‘other’ fees here and Hatch’s here. Make sure you check if those fees apply for you or not as that may form part of your decision. Finally, the comparison used in this article assumes you are using the auto invest feature with Sharesies and not investing in more than 300 shares at a time with Hatch. If you are not using that feature for your regular investments or investing in more than 300 shares a time, the costs will be higher. As I said earlier, Sharesies fee structure is a lot more detailed and harder to comprehend. Whether that is a deliberate feature or not I am not sure. The optics from Kernel and Hatch are a lot better with more transparent and easier to understand pricing. Kernel more so as all pricing is in New Zealand dollars and there are no extra fees not included in the plans.
Also note that Sharesies allow you to invest in NZ, Australia and the U.S. Kernel and Hatch just offering U.S products.
You can find the Sharesies vs Kernel vs Hatch fee comparison calculator on the same page here.
Once you add in the cost of the management fees of the fund you are investing in, it is quite expensive for both Kernel, Sharesies and Hatch at many price points. This is the cost of convenience as all companies make it incredibly easy to get started and invest. There are cheaper options available should you want to invest directly in international shares and ETF’s, it just involves a bit more friction.
Finally, I have added a grid that shows you what plan and what company is cheapest at various price points. For example, which plan is best at $2,000 a month or best at a lump sum of $100,000.
If you need an investment plan or recommendations , then get in touch today.
The information contained on this site is the opinion of the individual author(s) based on their personal opinions, observation, research, and years of experience. The information offered by this website is general education only and is not meant to be taken as individualised financial advice, legal advice, tax advice, or any other kind of advice. You can read more of my disclaimer here