Expert Investor: John Winters – Disrupting traditional brokers at Superhero

8 August, 2021

There’s been a lot written about Superhero recently. The latest entrant into the Australian online broker space is offering $5 trades for Australian stocks and free trades for Australian ETFs, putting the more-expensive traditional brokers on notice.

At Equity Mates, one of our official policies is ‘we hate fees’, so we love any company working to make markets cheaper and more accessible. So we sat down with the co-founder and CEO of Superhero, John Winters, to hear about his journey of starting Superhero and where he sees the company going.

If you want to learn more about Superhero, check out their website here.

*******

If you want to let Alec or Bryce know what you think of an episode, contact them here

*****

Some of our favourite resources and offers to help you during your journey:

*****

Make sure you don’t miss anything Equity Mates related by signing up to our email list. And visit this page if you love everything Equity Mates and want to support our work.

*****

Equity Mates Investing Podcast is a product of Equity Mates Media. 

All information in this podcast is for education and entertainment purposes only. Equity Mates gives listeners access to information and educational content provided by a range of financial services professionals. It is not intended as a substitute for professional finance, legal or tax advice. 

The hosts of Equity Mates Investing Podcast are not financial professionals and are not aware of your personal financial circumstances. Equity Mates Media does not operate under an Australian financial services licence and relies on the exemption available under the Corporations Act 2001 (Cth) in respect of any information or advice given.

Before making any financial decisions you should read the Product Disclosure Statement and, if necessary, consult a licensed financial professional. 

Do not take financial advice from a podcast. 

For more information head to the disclaimer page on the Equity Mates website where you can find ASIC resources and find a registered financial professional near you. 

In the spirit of reconciliation, Equity Mates Media and the hosts of Equity Mates Investing Podcast acknowledge the Traditional Custodians of country throughout Australia and their connections to land, sea and community. We pay our respects to their elders past and present and expend that respect to all Aboriginal and Torres Strait Islander people today. 

*****

Have you just started your investing journey? Head over to Get Started Investing – Equity Mates 12-part series with all the fundamentals you need to feel confident to start your investing journey.

Want more Equity Mates? Subscribe to our social media channels (@equitymates), Thought Starters * Get Started Investing mailing list and more, or check out our Youtube channel.

Equity Mates Investing Podcast is part of the Acast Creator Network.

Bryce Leske: [00:00:57] Welcome to another episode of Equity Mates, a podcast that follows our journey of investing. We break down the world of investing from beginning to dividend so that you can hopefully make some returns. My name is Bryce and as always, I'm joined by my equity buddy Ren. How's it going? [00:01:09][12.5]

Alec Renehan: [00:01:10] Very good, Bryce. We have an official policy here at Equity Mates. We hate phase yes, one of our three official policies. And today we're speaking to someone who's the embodiment of that policy, I guess making investing cheaper. [00:01:22][12.1]

Bryce Leske: [00:01:22] Our third policy as well as we hate paperwork. And I hear on the grapevine that it's also a policy of who we're talking to today as well. So two out of three of that. But look, it is our pleasure to welcome John Winters' to the show. John, welcome. [00:01:36][13.5]

John Winters: [00:01:36] Thanks for having me. [00:01:37][0.6]

Bryce Leske: [00:01:37] So John is the co-founder and CEO of the freshest broker in town superhero. There's a lot of chat going on in our community, John, about what you guys are offering. I think five dollar flat brokerage and what, zero on ETF trade, correct? Yeah, creating some waves. And as Alex said, we hate fees. So, yeah, it's certainly appealing. [00:01:56][19.0]

Bryce Leske: [00:01:57] Yeah, perfect. [00:01:58][0.7]

Bryce Leske: [00:01:58] So we're going to unpack everything from your journey to, I guess, be the CEO of Super Hero, as well as everything that you guys are offering and a bit more of a broader discussion around investing and brokers. But before we do Ren you want to kick off the game? [00:02:12][14.3]

Alec Renehan: [00:02:13] Sure. So, John, we like to start with a bit of a game. Get your thoughts on whether, you know, if you indexes, themes, topics in the investing community are overrated or underrated. So we'll start at home with the ASX 200 index. Overrated or underrated? [00:02:26][13.3]

John Winters: [00:02:27] Tricky one, I'd say underrated. [00:02:29][1.9]

Alec Renehan: [00:02:29] Okay. And why is that? [00:02:30][1.0]

John Winters: [00:02:31] I think there's a lot of exposure you can get to the market through the ASX. And yeah, I think a lot of people, particularly lately, you know, they've been looking offshore for certain exposure, but you can't get a lot of that exposure here. So Aussie Aussie tech, so [00:02:44][12.9]

Bryce Leske: [00:02:44] overrated or underrated the Nasdaq international tech. [00:02:48][3.5]

John Winters: [00:02:48] sort of hard to back this one up with the same as the Aussie one. But there's a huge amount of demand for the Nasdaq on superhero, the Nasdaq index ETFs. So I'd say it's underrated as well. US tech. [00:03:00][11.5]

Alec Renehan: [00:03:02] So next one, overrated or underrated investing in emerging markets. [00:03:06][3.9]

John Winters: [00:03:08] I reckon overrated because you probably look at emerging markets for high growth, you know, maybe, you know, speculative opportunities that are going to produce bigger returns. If you look at the Aussie tech stocks and the US tech stocks, there have been massive returns made. And so I don't think you really need to look at taking on significantly more risks to get significantly more return. So, yeah, I'd [00:03:31][23.5]

Bryce Leske: [00:03:32] even if you look at the performance of emerging markets, they haven't actually done ising well, [00:03:36][4.1]

John Winters: [00:03:37] yeah. And then you look at the currencies as so many things to consider. Yeah. Yeah. It's sort of too hard. [00:03:42][5.3]

Bryce Leske: [00:03:42] Basket to the easy basket. [00:03:45][2.4]

Bryce Leske: [00:03:45] Overrated or underrated index investing. [00:03:47][1.9]

John Winters: [00:03:48] I think it's got a place. It really depends on the investor. I think having a portion of your assets well diversified across an index, you can sort of never go wrong. And Warren Buffett, the guy who sort of what was that bet for a million bucks or something? Yeah. [00:04:02][13.7]

Bryce Leske: [00:04:02] Yeah. He's going to hedge fund manager [00:04:04][1.7]

Alec Renehan: [00:04:05] from the [00:04:05][0.2]

John Winters: [00:04:05] U.S. and anyone. And if you look over time, you know, the market as a whole always outperforms every other asset class. And yeah, if you take a long term view index investing I think's underrated. [00:04:16][11.6]

Alec Renehan: [00:04:18] So speaking of an asset class, very different to index investing, overrated or underrated bitcoin, [00:04:23][4.9]

John Winters: [00:04:24] I reckon it's overrated. There's going to be lots of people you can run the same argument that it's just man made. You can run the same argument over, you know, numerous different asset classes. You know, gold. It's it's it's men. It's men that I think people are starting to look at Bitcoin as a store of wealth, you know, is it right? I think it's going to be interesting how it plays out in terms of distributed ledger technology. That's what I think is interesting. I don't know if there's actually value in the Bitcoin in it. Yeah, I think it is an infrastructure layer, I think is really interesting. And there's probably more value in that over time. [00:05:01][36.7]

Bryce Leske: [00:05:01] Do you have the same sort of feelings towards gold, overrated or underrated? [00:05:04][3.2]

John Winters: [00:05:05] I'd say overrated as well. Just because I'm a bullish investor, I think there's always there's always better returns to be made elsewhere. Yeah. [00:05:11][5.9]

Bryce Leske: [00:05:12] Yeah. [00:05:12][0.0]

Bryce Leske: [00:05:12] So one of the things that we really enjoy doing at the start of all episodes is getting an understanding of your very first investment. We often find within the story there are some lessons to be learned. So before we get into your background, can you share your first investment? [00:05:25][12.2]

John Winters: [00:05:26] The first investment that really sorts of sticks in my mind was leading up to what could have been like sort of right in the thick of the GFC. It was one that I didn't really know what I was doing at all. [00:05:35][9.8]

Bryce Leske: [00:05:36] Like most people, [00:05:36][0.5]

Bryce Leske: [00:05:37] I guess I was [00:05:39][1.9]

John Winters: [00:05:39] buying index warrants because I thought, OK, I can get some leverage here. So, you know, whatever I put in, you know, I can get some leverage on the index. And the market had dropped five percent, somewhere between three and five percent for three to five days in a row is just quack, quack, quack. And I thought not. This has got to bottom out here, and I bought these index called knock out warrants, which [00:06:02][22.9]

Bryce Leske: [00:06:03] I had no idea what they were. [00:06:04][1.1]

John Winters: [00:06:05] Yeah, come on. The market's going to bounce. And then, you know, one that went up like half per cent the next day, it went down another five. Then it just kept dropping like it just kept getting worse and worse. I was working for a broker at that time and one of the guys there that was putting the trades on said, all right, you're done. What does that mean? Because you're out of that. I just bought them because these are knock out warrants. They're worthless. So that was that was the first investement. [00:06:33][27.2]

Bryce Leske: [00:06:35] that I remember. [00:06:35][0.3]

John Winters: [00:06:36] So that old saying, do your research really sort of stuck with me since then? [00:06:39][3.2]

Bryce Leske: [00:06:40] Well, I still don't even know what a what is it, an index knock out. [00:06:43][3.5]

Bryce Leske: [00:06:46] I don't know. It's got lower. It's written all over it or the where [00:06:53][7.0]

Alec Renehan: [00:06:54] have you bought back into [00:06:55][1.3]

John Winters: [00:06:55] themselves? I've never touched them again. I don't even know if they're still around. Yeah, right. Maybe they make it out. [00:07:00][5.0]

Alec Renehan: [00:07:01] So I guess from that investment to now have you developed a personal investing philosophy. [00:07:06][5.3]

John Winters: [00:07:07] Yeah, I have the key thing for me and I don't know, sometimes it's really difficult to sort of get an idea of who management is, who the people are that are running businesses. But for me, if you don't understand where management is trying to go with the business and they are not fully invested in the business themselves, then there are just red flags all over it. So those are my kit. That's my sort of key thing is no management. If you can understand what management's trying to do and make sure they've got some skin in the game, how [00:07:36][29.4]

Bryce Leske: [00:07:36] much skin in the game Bezos has, what, 10 percent skin in the game now, but are the founders, I imagine, have 100 percent skin in the game. So some founders would have done well. [00:07:45][8.6]

Bryce Leske: [00:07:45] They couldn't [00:07:45][0.1]

Alec Renehan: [00:07:45] they couldn't have 100 per percent because then you could [00:07:48][2.2]

Bryce Leske: [00:07:48] say 99 percent. You know, [00:07:53][4.8]

John Winters: [00:07:53] I think it's just interesting when you look at a company that has introduced a management team that doesn't own any shares, that is making decisions on behalf of you as a shareholder, and they have to act in the best interests of all shareholders. But, you know, you can see if their experience or their motivations are sort of not there. And it takes a bit of time and a fair bit of research really understand what management's trying to achieve. But once you do that and a lot of the time it resonates through the market and through the products that they're trying to offer. But once you understand that, that is sort of the first thing that that I look at. And you can see that with some of the buy now pay later stocks, the founders have done extremely well themselves. But you understand the product. You understand the reason behind the product and what they're trying to do. And it's a lot of the time it's, you know, the customer first and love the customer. And that sets up their motivation across their entire business. And, you know, thankfully for a lot of people, those have been great investments. And if you look at some of the companies that haven't really performed, you can sort of look back to management and say that there were underlying issues there. [00:08:58][65.2]

Bryce Leske: [00:08:59] So you're now co-founder and CEO of Superhero, but you have had a pretty storied journey in the finance industry. Are you able to give us a bit of a debrief on how you came to be where you are today? [00:09:10][10.5]

John Winters: [00:09:11] Yeah, sure. So I knew I wanted to be in stockbroking. I wanted to be a stockbroker. And, you know, there are a few sort of flashy movies. [00:09:17][6.2]

Bryce Leske: [00:09:17] Back in the eighties and nineties, I was like, oh, that's cool for George W.. Yeah, some of them, you [00:09:24][6.4]

John Winters: [00:09:24] know, I remember some of them pretty well, but I was introduced to he was the general manager of the time at Shaw Stockbroking, which is now Shuren Partners, was introduced to him, had an interview, you know, had a great chat to him. And he said, look, I can't give you a job today, but, you know, call me next week. And this went on for basically three months until the guy so probably sick of me and gave me a job. And that was really the sort of the beginning of my career in stockbroking, private wealth, financial services. And it was interesting to see my first sort of task. There was copying client account numbers from one system to another. But you couldn't control C control V it because the one system was like a DOS system and the other one was marginally better. That was the sort of the beginning of, you know, seeing that this industry is so archaic. Then move to Perth, join Macquarie Bank, another smaller firm, and Shaw then opened up in in Perth, where I was living then, and was fortunate enough to have a good friend of mine, Larry Diamond, come to me with this great idea to start a buy now, pay later business. And I need some you know, I need some capital to sort of get this thing off the ground. So the business was zip and we listed on the stock market. [00:10:38][74.0]

Alec Renehan: [00:10:38] And did you invest when he came to you with the idea? [00:10:40][2.1]

John Winters: [00:10:41] I hope my wife isn't listening, but when I literally went, oh, [00:10:44][3.3]

Bryce Leske: [00:10:45] oh, everybody should be happy to hear that. Yeah, yeah, yeah. [00:10:50][5.3]

John Winters: [00:10:51] Well, it has worked out great for myself and a number of. People, and particularly, Larry, and you know, and, you know, it's really sort of been a major player in inventing a completely new industry, but he went very quickly from four staff members up to I think they're now about 500 or so. The staff were coming to me as sort of, you know, someone that they could invest through and saying, can we set up an account? We want to, but they wanted to buy Zaib shares. So I said, okay, here's an eight page account form. Fill that out, then go down to the chemist, get your ID certified, post that up to the office and in a couple of days I'll be in touch with an account and then, you know, and then we can start. Go on. By the way, there's a minimum 125 Dollars brokerage, so I only want to invest 500 bucks. So it was big there's a major point of friction there. And that sort of really triggered the whole journey into a superhero where we wanted to make investing more accessible to particularly those people, but more understandable as well as a lot of people just didn't understand how to get started, where to get started or what to invest in. And then the final piece was making it affordable. Yeah. Hate fees. [00:12:00][69.0]

Bryce Leske: [00:12:01] Yeah. 125 Dollars brokerage. Frostiest each. Yeah. [00:12:06][5.1]

Alec Renehan: [00:12:07] We love entrepreneurial stories here at Equity Mates. It's, you know, the other side of the investing coin really when you were founding super hero and you know, you were going out trying to raise venture capital money and trying to grow the business. What was that experience like? I mean, online broking, you know, there's more international players coming to Australia and stuff like that. Comsec sharpening their pencil. What was the conversations like and what was the experience like trying to start and trying to broker? [00:12:32][24.9]

John Winters: [00:12:33] Yeah. So I've got a good friend who you guys would know well met Labor Leader. It's from steak. So we've spent, you know, numerous hours on the phone talking about how to do this and how to do that. What's the best way to, you know, structure this? And, you know, he's us where Aussie. So, you know, it's been good to sort of learn from his journey as as well as, you know, some experience that I've brought from my career as well. But really going out to potential investors to raise capital to help get the business off the ground. It was interesting being on the other side of the coin. You know, usually, you know, I was a broker raising money for companies. And now I was sort of I was the one telling the story and sort of putting the cap out for capital. So it's been a pretty interesting one, but there's been a lot of people over my career who have trusted me with, you know, managing their money and they've seen the opportunity and sort of jumped in. [00:13:30][57.9]

Alec Renehan: [00:13:32] one thing that you're playing a bit coy with there is you've got two big names. I'm sure you've got more than two, but two very well-known names for the Equity Mates community in your funding. Sub-Zero Donatello's US. Those are. [00:13:42][10.2]

John Winters: [00:13:43] Yeah. So through obviously my friendship and the business relationship I built with Larry from Zipp over over the journey, the conversation with him when I was building superhero was one that really resonated with him. So. So he's an investor. He led the last capital race just to go back a little bit. When I was starting CPR, I knew I needed someone strong in tech. So I turned to a good friend of mine. His name's Wayne Basken, and he was the best tech guy I knew. He was also the only take on it, I still say, is the best tech I know. But, you know, I took I took this to him and he loved it as well. So his very good friend is Nick Molner, who started Afterpay. So it's sort of like we never we never talk about Fight Club. You know, he's sort of Afterpay I'm there. But there is an interesting dynamic that we've got Nick Molner as an investor as well. I think that all of the people who we have invested in the business bring their own experience and advice over, you know, over our journey. And yeah, obviously, those guys have got a fair bit of experience from, you know, hyper scaling. So, yeah, the list goes on. We've got the chair of the AFP on our on our board as well. [00:14:47][64.4]

Bryce Leske: [00:14:48] So there you go. Must be nice. Must be an artifact. Yeah. [00:14:51][3.6]

Alec Renehan: [00:14:53] Maybe you should extend out to all the buy up if I later found this. [00:14:55][2.5]

John Winters: [00:14:57] I am a shareholder of both. [00:14:58][1.1]

Bryce Leske: [00:15:00] Equity Mates. We're just going to take a quick break to hear from our sponsors. So, John, before we jump into the nuts and bolts of super hero, there is a lot going on in the markets at the moment. Very interesting time for all investors, particularly those that have just started their investing journey. And given that we're going through some pretty unprecedented times in the Covid crash is something that a lot of our audience would never have experienced before. What were some of your sort of learnings in terms of an investing approach or how did you navigate Covid? [00:15:28][27.6]

John Winters: [00:15:29] That's an interesting one. We weren't live at the beginning of of Covid Warren and I sort of looked at each other mid-March. The market was crashing. And we're sort of we're looking at, you know, starting a business into all of this. The market started to rip higher, probably more aggressively than it fell hurricane. I'd seen the market falls through the GFC through my experience in the GFC and various falls, you know, along my career. And I think there's not a huge amount that can fundamentally change consumer behavior. And we've seen whether it's a change in president or whether it's Covid or, you know, people are still going to go shopping every day, whether it's online or offline. They're still going to shop. They're still going to use tech. They're still going to use their iPhones. And it's the companies that people can interact with on a daily basis that have really been the standout performers over Covid. And yeah, I think there's been a huge amount of people who have seen the dips in the past and have jumped in. And I sort of bought the dip. [00:16:33][64.1]

Bryce Leske: [00:16:33] You speak about changing behavior. And it's just it's still fascinating to me that of all the crashes and maybe it's this perfect sort of combination of having the right technology and platforms available and services like Equity Mates and all that sort of stuff, [00:16:48][15.3]

Bryce Leske: [00:16:49] or was instrumental in coming together. [00:16:52][3.0]

Bryce Leske: [00:16:53] But the number of people that showed interest in the markets at a time that it was historically crashing the fastest. It's just amazing. [00:17:01][8.5]

John Winters: [00:17:02] Well, there was there's been for a while there's been this whole sort of digitization movement that's been going on, particularly in sort of our age group, you know, the millennials, Gen Z, you know, they've all been moving online. And I think it's just a bit sped that up massively quicker than anyone ever expected. We turn to [00:17:21][18.8]

Bryce Leske: [00:17:22] this whole thing that's coming a couple of years ago and we just saw the [00:17:25][3.5]

Alec Renehan: [00:17:26] Bryce and I quit our jobs during Covid. You started a business during Covid were the Dumble. [00:17:31][4.9]

Bryce Leske: [00:17:32] We're very lucky. [00:17:33][1.2]

Alec Renehan: [00:17:34] very lucky. [00:17:35][0.3]

Bryce Leske: [00:17:35] You in a few years. [00:17:35][0.4]

Alec Renehan: [00:17:37] So speaking of use, founded superhero, as you said, in the middle of covid, where you would expect people were tightening their belts and putting their wallets in their pocket and not signing up for new brokers. How was that experience? [00:17:49][12.3]

John Winters: [00:17:50] The overnight success took two and a half years to get there. The beginning of it all, it was pretty scary. It quickly turned around, though. We saw a bunch of our peers start to really accelerate in terms of growth, and it energized us to to get to market quicker. But yeah, it's pretty fascinating. [00:18:05][14.9]

Bryce Leske: [00:18:07] So for those who have been, I guess, solely focused on the craziness of the election or have been, I don't know, not keeping track of every single broker that's coming to town, let's just take a step back. Are you able to, I guess, give us the elevator pitch for what is superhero in case we haven't made it clear enough? [00:18:21][14.5]

John Winters: [00:18:22] Yeah, cool. So Superhero is officially Australia's cheapest online broker. You can sign up takes in most cases about a minute to sign up. You may be required to put in an ID document, but your account is set up in real time. You can use payday to fund your account in real time as well. And interesting fact is we are NEBs largest paid customer now, which is pretty, pretty good. Can you just put that in writing for us? But yeah, making it possible to to set up an account and fund fund your account and be in the market literally in minutes is an Australian first and something we're pretty proud of. [00:18:57][35.5]

Bryce Leske: [00:18:57] How cheap is cheap [00:18:58][0.6]

John Winters: [00:18:59] in terms of being the cheapest. Well yeah. So, so once you're in it's five bucks flat fee to trade and you can trade at any amount. And then we launched about a month after we went live, we cut ETF brokerage to zero. That was really to incentivize people to make longer term decisions around investing and to really remove the barrier of making those longer term decisions. [00:19:23][23.9]

Alec Renehan: [00:19:24] We like the fact that super hero is lowering fees, but I think I probably like that perspective more. The fact that it's you're not lowering fees and then trying to encourage as much activity as possible and trying to clip the ticket every time it's getting ETFs, we're not going to charge you think long term like that's that's. Yeah. You know, that's what we talk about in Equity Mates, and that's great. Yeah. Yeah. Now we've got to ask because a lot of online brokers come in with a low headline fees and then there's, you know, subscription fees or quarterly calls. So there's always something in the fine print. What's in your fine print. [00:19:55][31.5]

John Winters: [00:19:56] Yeah, so we try to be as transparent as possible and a couple of times that sort of come back to bite us being too transparent just because people don't understand the way that the. The industry sort of set up, but we've got a free account, so it will never cost you money unless you agree to to pay for something, you could set up an account with us. You can go and buy ETFs and hold them for the rest of your life. It will never cost you a cent. We've got a paid account as well. So for nine dollars a month, you can have live data across the entire platform. So it's ASX real time data, as well as comprehensive tax and portfolio performance reporting, which is not usually seen, particularly with the online guys. Probably the closest comparison would be, you know, if you had an account with Hubb or Networth, it's the detailed, realized and unrealized capital gains rate for an hour. [00:20:44][48.8]

Bryce Leske: [00:20:45] Yeah, I'm about [00:20:45][0.5]

Alec Renehan: [00:20:46] to I'm about to say this, and I'm not going to call out the broker, but [00:20:48][2.6]

Bryce Leske: [00:20:51] I read that [00:20:52][1.0]

Alec Renehan: [00:20:55] I tried to get my tax details, like how many dividends, franking credits, all that stuff for my tax return. They'll like we'll have it ready for you at the end of October. So, guys, oh, I'm sorry about my taxes and it's no good for me on the very first day. So I think that that is valuable. Yeah. [00:21:12][16.7]

John Winters: [00:21:12] Yeah. So it's pretty. It's pretty details got all the income. It's got all the franking credits. It's got it's got a full report of your entire portfolio. That's what's built into that, that nine dollars a month. If you went to I used to have clients who got those sorts of reports when I was at Shuren Partners in Macquarie, we used to charge them one percent of their portfolio value every year. So, you know, if there was a three million dollar portfolio, it's 30000 dollars a year basically just to produce a report. And then we'd charge on one percent brokerage with 125 minimum GST. [00:21:42][29.8]

Bryce Leske: [00:21:43] We're trying to get a job back in the future. We call about here, along with [00:21:50][7.7]

Bryce Leske: [00:21:50] fees being very important for our community. Something that is often spoken about when people are starting to choose brokers. Is the whole is it sponsored? Do I have ownership? Is it custodian? And sort of what is all that actually really mean? [00:22:04][13.3]

Alec Renehan: [00:22:04] And maybe when you're answering this, if you can define some of those key terms for people who aren't familiar with. Sure. [00:22:10][5.2]

Bryce Leske: [00:22:10] Our approaches, I guess, don't worry about any of it or don't let it be a barrier to start. [00:22:14][4.0]

Alec Renehan: [00:22:15] But, yeah, I thought you were going to answer your own question. [00:22:17][2.2]

Bryce Leske: [00:22:19] How is superheroes structured in terms of all of that and what does it all mean? [00:22:23][4.1]

John Winters: [00:22:23] Yeah, sure. So there are two key ways you can own shares in Australia. One is through sponsorship or having an individual his'n. The other is through a custody account. So custody structures are not and not new when we're not doing anything new. In terms of the regulatory framework and our structure, we have a custody structure instead of individual Hinz. And I mean, there's not really any sort of difference in risk around those two structures. It really comes down to a personal preference and B, the services that you can get out of both structures. So having a his'n, there's a lot of manual sort of work you've got to do. You've got to update the registries with your tax file number, with your bank account, with all of that sort of information. And you get sent about three trees worth of mail [00:23:07][43.9]

Bryce Leske: [00:23:08] every [00:23:08][0.0]

John Winters: [00:23:09] every month where with a custody structure, the custodian effectively takes on all of those responsibilities. Some allow you to participate in corporate actions and some don't. We offer all of our customers the same level of shareholder participation as if you had an individual. Except we don't send you trees worth of [00:23:28][19.6]

Bryce Leske: [00:23:30] paper that [00:23:30][0.7]

John Winters: [00:23:31] we are paperless. They share registries, don't send you, you know, mountains of mail either. We actually stand as your sort of intermediary between the share registry. And we've got institutional relationships and corporate relationships with Computershare Link or all of the major share registries. So what it means is that we're able to and that's one of the key ways that we lower our costs. But it means that we can provide the customer a better service at a lower cost and really take all of that sort of administration and the burden of sort of running the individual instructor off them and really just let them concentrate on their investments. [00:24:09][37.8]

Alec Renehan: [00:24:09] So I think if we can unpack that a little bit further, I think when people look at the difference between a structure and a custodial structure, they always worry what happens if the business falls over, like what happens to my shares, who owns them? How do I get them? Do I get them? Let's talk. Worst case scenario. Yeah, if superhero collapse, what does that mean for investors that have their money with it? [00:24:30][20.8]

John Winters: [00:24:31] So if superhero stopped operating or fell over, nothing really happens to individual shares. They're not held on our balance sheet. We don't own them. You own them. They're held in a separate custody entity that has its own regulation, its licensed separately to superhero. It's got regulatory capital that backs up what everyone's investments. So if superhero as a business, our blue branding, our website, all of that fell over. The shares that are held in the custody account are all sort of they're belonging to individuals. They. There's no proprietory right over those assets, we can't go in and claim them, administrators can't come in and claim them as assets of superhero. There's it's completely arm's length. There's regulation around all of that. And it's very rare. In fact, I don't I've never seen I'd have to I'd have to go and look online to see if there's a custodian that's ever fallen over. And that's because there's a huge amount of regulation behind them that that requires them to sort of be able to continue. [00:25:31][60.0]

Alec Renehan: [00:25:31] Yeah. [00:25:31][0.0]

John Winters: [00:25:32] Even if the person who's or the company that is operating under that custody structure falls over. [00:25:37][4.6]

Alec Renehan: [00:25:37] Yeah. And these custodians themselves, a 100 billion dollar businesses with balance sheets, fortress balance sheets. [00:25:44][6.4]

Bryce Leske: [00:25:44] And as an investor, I mean, if we are hoping that fees continue to fall, it just seems that the custodian model is at this stage the most efficient way of allowing that to happen. So, you know, if you're uncomfortable with it, it's kind of like you just need to get comfortable with it if you're going to be searching for those loans. [00:26:02][17.9]

John Winters: [00:25:13] There are so many examples in the market already that people are comfortable with. So if you look at to name a few, there's there's Vanguard, the personal investor or whatever the name of that business is. It's all held by a custodian. It's held by Vanguard as the custodian. I IG Markets might do it. CMC, I think does it interactive brokers stake does it? So far it's about to launch their US business. It's going to be I mean, their custodian is actually based in Singapore, even though you're buying US shares from Australia. So there's there's a range of different examples of it in the market already where we're sort of hyper transparent around how our structure works, saying that there's a single hinh that all assets sit on. And I think that sort of cause a little bit of concern around, you know, the his'n versus custardy structure. That's how custodians work. That's how they work around the world and particularly in Australia. So, yeah, there's a lot of examples that we can turn to around how this is. And I think it's going to continue to go that way. [00:26:59][106.2]

Alec Renehan: [00:27:00] I think we've covered off that question. If people want to get more in detail. Do you guys have stuff on your website that people can write about? Yeah. So superhero.com.au [00:27:08][8.2]

John Winters: [00:27:10] It's pretty boring. [00:27:11][0.4]

Alec Renehan: [00:27:11] So let's move on from that to talk about some of the things that you're saying on the platform at the moment. So you must have a wealth of data on Australian investors and how they're investing since Covid. So what are some of the trends you're saying with Aussie retail investors? [00:27:26][14.4]

John Winters: [00:27:27] I think the trend model change after the last couple of days. [00:27:29][2.3]

Bryce Leske: [00:27:30] for context, we are recording on the 11th of November and yesterday was the announcement of Pfizer's vaccine. So hence that comment. [00:27:37][6.6]

John Winters: [00:27:37] Yeah, yeah, yeah. I mean, the tech stocks, whether it's Aussie or US, they've been in favor from day one, was the largest holding interesting [00:27:45][7.4]

Alec Renehan: [00:27:45] zip over Afterpay. Yeah. [00:27:46][1.1]

John Winters: [00:27:47] And it continues to be the most active stock as well. I think there's probably that psychological difference between Zipp and Afterpay being 100 dollar stock versus a six or seven point stock. The standout ETFs on the platform are the Nasdaq 100, of course, and the Asia Tech Tigers. They could even be two and three as the sort of the most held across the platform. So, yeah, there's been a huge amount of tech exposure. But if you look sort of further down the list, Qantas is their flight centers. They're all of the leisure stocks have been there all the way through. And they've obviously performed extremely well since Pfizer's announcement about the vaccine. So I think people sort of can see that there's a vaccine coming. So they're sort of loading up in preparation for that. And I think the expectation is that they're, you know, this this is we're going to move past this whole Covid thing. And, yeah, we've seen people getting sort of set for that for the last couple of months. [00:28:41][53.5]

Alec Renehan: [00:28:41] Not only are we moving past Bryce just told me he's going down to Melbourne in a couple of weeks. [00:28:45][3.6]

Bryce Leske: [00:28:47] Things are really you know, they've got the lowest case number in the country now. Right now in New Zealand. Yeah. Yeah. [00:28:54][7.2]

Bryce Leske: [00:28:55] So, John, another sort of aspect of investing that a lot of our audience think about is superannuation. And we always like to get a feel from the experts that we talk about how they think about it alongside investing, because a lot of beginners don't necessarily see it in total. How should beginners think about superannuation? [00:29:13][17.4]

John Winters: [00:29:14] Super's a really interesting world when you open a superannuation account. We're all taught to believe that we're investing in a balanced or growth or, you know, conservative sort of fund. Those aren't investment choices. Those are risk profiles. And there's not a huge amount of clarity around what you're actually investing in. So the whole story about engaging with your super really ends very quickly because you can't engage with your super you've got no way of actually choosing how it wants to how you want to invest it unless you go into self managed super fund. And that is, you know, there's a high barrier to entry there [00:29:49][35.1]

Alec Renehan: [00:29:49] and a lot of paperwork. And, you know, again, [00:29:51][1.6]

Bryce Leske: [00:29:52] and fees know you're going to have an [00:29:55][2.2]

John Winters: [00:29:55] accountant and auditor [00:29:55][0.7]

John Winters: [00:29:58] So I think it's been a really difficult challenge for particularly younger people to work out what. I do with their super and I think a lot of people feel quite disengaged and disconnected with their superannuation. It's not something that people believe is part of their asset pool. Now, you can buy a house, you can have money in your account. Your super doesn't really sort of come into play until you're 60 plus. So I think that could be a really interesting part of the market in the future. Yeah, if you sort of crack that one huge [00:30:26][28.0]

Alec Renehan: [00:30:27] Equity Mates super. [00:30:27][0.5]

Bryce Leske: [00:30:29] not bad. [00:30:30][1.0]

Bryce Leske: [00:30:32] So, John, before we jump into our final three questions that we finish all of our interviews with, we are very excited to be able to do the next half hour, get started investing mini series with super hero, all about brokers and the broker. Basically, the number one question that our community ask is at least three times a week is what broker should I be using if X, Y and Z? So we're lucky enough to be, I guess, sitting down with you for an extended period to unpack all of the ins and outs of brokers, what you should be thinking about when you're looking for a broker, you know, going through the structure, custodian stuff, all of that will be covering it all. It will be launching in mid-December on out get started investing So fees make sure you subscribe to that very much. Looking forward to it. [00:31:14][41.7]

John Winters: [00:31:14] So should be fun. [00:31:15][1.0]

Alec Renehan: [00:31:15] Yeah. And we should say we've already tried to get as many questions as possible from the Equity Mates discussion group. But if you do have more broker questions, sign up to our group or jump onto the group and ask them there and we'll make sure we include them. [00:31:27][12.2]

Bryce Leske: [00:31:28] Yeah, John, we've got about 65 questions so far. So you've got to [00:31:31][3.0]

Bryce Leske: [00:31:31] be looking at the numbers. [00:31:33][2.1]

Alec Renehan: [00:31:34] The answer answered, all of them superior [00:31:36][2.2]

Bryce Leske: [00:31:39] So stay tuned for that. Get started. Investing fate, as I said, launching mid-December. [00:31:43][3.4]

Alec Renehan: [00:31:43] So, John, as Bryce said, we do like to end these interviews with the final three questions. But if people are interested in learning more about superhero or signing up to superhero, where can they go? [00:31:52][8.7]

John Winters: [00:31:52] You can go to superhero.com/equitymates [00:31:53][0.6]

Alec Renehan: [00:31:57] So we'll jump into the final three questions. The first one is, do you have any books that you consider must read? [00:32:03][6.6]

John Winters: [00:32:04] I don't have time to watch the TV or read books. [00:32:06][2.0]

Bryce Leske: [00:32:08] Oh, the art of war. [00:32:09][1.1]

Alec Renehan: [00:32:10] OK, is that what you apply when you're growing a superhero? [00:32:13][2.9]

John Winters: [00:32:14] No, it was just an interesting one that I read. You know, there's a lot of you sort of got to try and read between the lines on one on most of the book. Yeah, but there's you know, I think there's a few good lessons in there, but yeah, that's probably the only one that I can remember reading the last in the last 12 months. [00:32:33][19.9]

Alec Renehan: [00:32:34] And I saw on the life of an entrepreneur. Yeah. The second question, what's your go-to source for investing and financial information? [00:32:42][7.5]

John Winters: [00:32:42] I wouldn't have one other than Equity Mates. No, I look at a range of different media outlets to sort of see what's going on and see if there's any sort of biases between them. Yeah, it sort of depends. I don't think I'd have a single go to. [00:32:58][15.4]

Alec Renehan: [00:32:58] Yeah. And then the final question. If you think back to your younger self buying, am I going to get this right or knock out Interna index to over knock out warrants and I get that right. Yeah, no, [00:33:09][11.3]

Bryce Leske: [00:33:11] I still don't quite know what they say. Yeah, that'll work. Yeah. [00:33:14][3.1]

Alec Renehan: [00:33:14] If you think back to that, your younger self during the GFC at that time, what advice would you have for your younger self. [00:33:20][5.8]

John Winters: [00:33:20] Start small. Don't go to all on day one. [00:33:21][0.7]

Bryce Leske: [00:33:26] That is something that we speak about, in the book that we're writing and have spoken about on the show before is the good news is that it's easy now to start small and your investing journey. So John, congrats on the launch of Super Hero. It's always good to see competitors coming into the market and making it easier and more accessible for everyone to start their journey. So you have our full support over here. Thank you. [00:33:46][19.7]

Bryce Leske: [00:33:46] So we won't be trashing you, obviously. [00:33:47][1.0]

Bryce Leske: [00:33:49] And look, I appreciate your time and looking forward to the series on Broecker basics that we'll be launching in December. [00:33:54][4.9]

John Winters: [00:33:54] Looking forward to it. [00:33:55][0.7]

John Winters: [00:33:55] Thanks, guys. [00:33:55][0.0]

[1896.7]

Get the latest

Receive regular updates from our podcast teams, straight to your inbox.

Start your week the right way with five of our favourite articles from the past week. Read what the team at Equity Mates are reading and expand your knowledge of the world of finance and business.
The perfect compliment to our Get Started Investing podcast series. Every week we’ll break down one key component of the world of finance to help you get started on your investing journey. This email is perfect for beginner investors or for those that want a refresher on some key investing terms and concepts.
The world of cryptocurrencies is a fascinating part of the investing universe these days. Questions abound about the future of the currencies themselves – Bitcoin, Ethereum etc. – and the use cases of the underlying blockchain technology. For those investing in crypto or interested in learning more about this corner of the market, we’re featuring some of the most interesting content we’ve come across in this weekly email.