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Robo users double down during COVID-19

Robo advice provider Six Park saw a significant increase in users topping up their accounts during March and April, as COVID-19 rocked markets.

In a normal period, Six Park sees about 10-15% of users top up their accounts over a two month period. But, in March and April the top up rate went up to 25%.

Six Park chief executive Pat Garrett said this was a sign that clients understand the key principles of investing and have confidence in Six Park's methodology.

"Our message was to remain calm and avoid the classic investing trap of emotionally led decisions which typically leads to bad outcomes (selling after market falls, and buying back in after the main recovery)," Garrett said.

Slightly more clients than usual did close their accounts though, possibly spooked by the volatility, Six Park said.

In a normal period, Six Park has a churn rate (the rate of people closing accounts) of 1-2% but during March and April it went up to 5%.

However, Garrett is unperturbed by those numbers.

"The 5% for March/April includes a number of clients who will not close their account entirely, but look to reinvest in due course, so the actual churn (lost) rate for March/April was probably more like 2-3%, an increase versus 'normal' but still well below what an 'alarmed' client base would do," he said.

In March, Six Park saw users log in 22.8% more frequently than the previous month indicating that users were curious, and maybe nervous, about volatility.

But by April, users were logging in 7% less than they did in February.

This comes after ASIC issued a warning to retail investors after brokers saw a huge increase in day trading during the COVID-19 volatility, with many trying to profit from markets being down actually losing money.

Read our full COVID-19 news coverage and analysis here.

Read more: Six ParkPat GarrettASIC
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