The Raiz Invest Ltd (ASX: RZI) share price is climbing higher today. This comes after the mobile-first financial services platform provider announced a new fee structure for customers.
In afternoon trading, the company's shares are up 4.85% to $1.73. Earlier today, the Raiz share price reached an intraday high of $1.80.
What are the fee changes?
Australian customers of Raiz might notice an increase in fees from 1 April 2021 for the micro-investing platform. However, not all of Raiz's now over 340,000 active customers will be impacted.
If you use the company's recent "Custom" portfolio, you can breathe a sigh of relief. The portfolio launched in January will retain its existing fee of $4.5/month on balances below $20,000, or 0.275% p.a. on balances over $20,000.
The same goes for anyone with over $15,000 in any of the standard portfolios offered by Raiz. This includes conservative, moderately conservative, moderate, moderately aggressive, aggressive, emerald. On the other hand, if you hold less than $15,000 in your standard portfolio, fees will increase to $3.50/month.
Further, the Sapphire portfolio, which offers investors a 5% exposure to Bitcoin (CRYPTO: BTC), will experience a hike to $3.50/month as well.
Quality comes at a price
Largely, the reason given for the elevation in fees is an increase in costs associated with providing the Raiz platform.
Raiz Invest Group CEO and Managing Director, George Lucas, commented:
There is an increasing corporate governance cost associated with delivering financial products and services that requires ongoing investment in technology and resources, such as people. This is important to ensure we are compliant, protect our customers' data and investments and are constantly meeting (or exceeding) our customers' expectations
Mr Lucas went on to explain the criticality of continuing to provide an exceptional experience. Corporate governance, risk management, and oversight seem to be the pillars of the justification.
"A fee increase is always a very considered decision, and, despite this latest increase I believe our fees remain competitive for the suite of cutting-edge features and options we provide,"
Raiz share price performance
It appears investing in the investment platform itself this last year would have been more prosperous than in its portfolios. The Raiz share price has performed exceptionally in the last 12 months, returning 138%. Most of the company's portfolios are a diversified mix of index exchange-traded-funds (ETFs), alongside bonds and money markets. Hence, the diversification associated with risk management tends to lead to lower but more sustainable returns.
