Disappointed Six Park calls it quits

Robo advice business Six Park has written to financial advisers telling them it will be ceasing operations no later than 28 August.

In a e-mail to advisers the company said that its Managed Discretionary Account Agreement will terminate effective from Monday, 31 July.

“We have planned for an orderly process to enable clients to determine how they would like to transition and manage their investments going forward, and they will not be charged any management or service fees from the Termination Date,” the company’s message said.

It then goes on to state:

I first want to make several points very clear:

• Client assets (cash at Macquarie and investments at Openmarkets) remain safe, secure and in their beneficial ownership.
• This will be an orderly process and we have the resources and time to help our clients transition out of Six Park’s service via two options available (sell down or HIN transfer).
• It is currently a challenging environment for businesses like Six Park that require external funding and industry transformation to scale up our business. In the absence of these factors, we have now carefully planned for an orderly process to assist our clients in transitioning their assets currently managed by Six Park.
• MDA regulations stipulate that this termination notice can be sent no more than two days prior to the Termination Date, thus the short notice. Despite the short notice of termination, clients will have approximately four weeks to decide what to do with their cash and ETF investments.

I want to provide some context around this decision:

• We spent two years developing and honing our offering to meet an acute need in the market, ensuring that the technology was secure and reliable, and that our service was well considered, compliant and served our clients’ best interests.

• After seven years in the market, we are very pleased with our achievements: we have helped thousands of clients invest their funds; our investment portfolios have consistently outperformed a vast majority of similar multi-asset class managed funds, even during ‘down’ market cycles; our client satisfaction scores have been extremely high for a financial service entity; our clients on the whole have weathered extremely volatile phases of the markets without panicking or making emotional decisions, a behavior trait that we feel is critical to successful investing.

• Because we provide our service to clients and partners at a very low cost, we need a measure of scale and funding to continue to grow and operate our service effectively. This is in part why we added our service to third parties (for added distribution to the broader mass market) and have also sought interest from larger financial organisations and wealth firms for investment or deeper partnerships to help us grow.
• Regrettably, in an industry that is supposed to be seeking innovative ways to provide affordable, professional investment management services for the mass market, no substantially larger organisation has stepped forward in Australia to do so at scale with Six Park, despite our best efforts and the fact that such partnerships/alignments are well established overseas.

So, this news saddens me as a co-founder of the business and having seen first-hand how we can have such a positive impact on our clients’ lives. We are immensely proud of the manner in which we have always conducted business with transparency, integrity and our clients’ interests first.

It has genuinely been a privilege to help you, our partners, and the clients we have served via our relationship with you. We have never taken this obligation lightly and thank you for trusting us to help you on this front.