Spaceship hikes fees: What you've missed

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A new study finds older men are the worst panic sellers, and Spaceship changes its fee structure for the first time.

Here are five things you might've missed this week.

Neobanks on the charge

spaceship raises fees

Demand for online banking is surging in Asia Pacific countries. According to analysis by Finbold, neobanks in the region attracted more than 130 million new customers in 2021, representing growth from the previous year of 113.62%.

This customer growth dovetails a surge in the number of neobanks, with the first half of 2021 seeing 68 platforms come online. Australia accounted for 13 of the region's new platforms, outdone only by India with 14.

The growth in neobanks has put the squeeze on traditional bricks and mortar banks.

"However, traditional banks are still facing challenges like an outdated legacy of technology architecture," says the report.

"Typically, when new technologies evolve, they are established on top of a bank's existing infrastructure, complicating it. Consequently, to keep a grip on the customer base, most traditional players are coming up with innovative technologies to tackle the threat from neobanks."

Older men more likely to panic sell

Research out of the Massachusetts Institute of Technology (MIT) have found that males over the age of 45, who consider themselves to have "excellent investment experience", are more likely to "freak out" and panic sell when the market tanks.

The study defined a panic sale as a 90% fall in the value of a household account's equity assets over the course of a month, with 50% or more due to trades.

The research was based on analysis of more than 600,000 brokerage accounts.

"Financial advisors have long advised their clients to stay calm and weather any passing financial storm in their portfolio," write report authors Daniel Elkind, Kathryn Kaminski, Andrew Lo and colleagues.

"Despite this, a percentage of investors tend to freak out and sell off a large portion of their risky assets."

The research also found that those with less than $20,000 in their portfolio tend to sell off assets more often.

Spaceship raises fees

Micro-investing platform Spaceship is changing its fee structure for the first time since its launch, which will see most customers pay more.

"...the new flat-rate management fee will replace the current percentage-based fee, and no other fees and costs will apply," the company announced on its blog.

From November 1, new and existing Spaceship customers with over $100 in their account will be charged a monthly $2.50 management fee.

Previously, there were no fees on the first $5000 invested. Above that, Spaceship would charge 0.10% per annum on its Spaceship Universe and Spaceship Earth portfolios, and 0.05% on its Spaceship Origin portfolio.

Home renos on the rise

According to the 2021 Houzz and Home survey of more than 2000 Aussies, spending on home renovations grew 5% in 2020 to a median of $21,000 over the last year.

Spending on kitchens, the most popular home reno project, jumped 33% to $20,000.

And while interior room renovations remain the most common projects (72%), outdoor renos are tackled by nearly three in five homeowners (59%).

"While the pandemic caused initial concern for the residential renovation industry, many homeowners finally had the time and financial means to move forward with long-awaited projects in the past year," says Tony Been, managing director of ANZ at Houzz.

"This pent-up demand, along with long-standing market fundamentals empower homeowners to continue investing in their current homes."

Cash remains the main form of payment for home renovations (81%), while the share of homeowners opting to finance their projects with credit cards fell from 20% to 13%).

Residential tenancy support package

A reminder that support is still available for tenants and landlords that have been affected by the pandemic.

Landlords are eligible for up to $4500 per tenancy if they reduce rent by at least that much and have not claimed land tax relief.

An affected tenancy is one where:

  • any one or more rent-paying members of the household lost employment or income, or have had a reduction in work hours or income, as a result of the impact of the COVID-19 pandemic, or had to stop working (or materially reduce their work hours) because they or other members of the household were/are ill with COVID;
  • and can show that the household's weekly income has reduced by 25% or more (including any government assistance received) compared to the weekly income received in the four weeks prior to June 26, 2021.

Meanwhile, the moratorium on evictions will continue until November 11. Tenants are protected from eviction if they can show the landlord that they are an impacted tenant, and continue to pay the landlord at least 25% of the rent payable under the residential tenancy agreement.

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David Thornton is a journalist at Money magazine and is one of the hosts of the Friends With Money podcast. He previously worked at Your Money, covering market news as producer of Trading Day Live. Before that, he covered business and finance news at The Constant Investor. David holds a Masters of International Relations from the University of Melbourne.