What does the Six Park closure mean for investors?

Melbourne-based robo-advice platform Six Park has announced that it will be closing down its investment management services.

Launched seven years ago, Six Park had positioned itself as a middle-ground option for investors not willing or able to access the services of a financial advisor, but who were interested in support building and managing a portfolio.

To do that, it offered investors access to a number of relatively low-cost investment portfolios composed of a curated mix of exchange traded funds.

Six Park also extended its services to financial professionals, but in a statement released on Friday which was reported in the Australian Financial Review, the firm noted that its ambition to expand to a wider client base hadn't been as successful as desired.

"Whilst we have established several strong B2B partnerships, we have not seen a broad enough interest and adoption of digital investment services that can help solve for the mass market need for accessible and affordable advice."

Six Park also stated that it would begin assisting customers in transitioning their investments away from the company.

"The company has provisioned resources and time after [July 28] to allow for an orderly termination of the service and enable clients to elect how they may wish to transition and manage their assets going forward."

What can Six Park investors do next?

Of course, Australians invested through Six Park will naturally have been concerned with the announcement and what it all means for their holdings.

Financial adviser Jessica Brady says that the good news is that customers are the legal owners of their assets, and they'll have a couple of options for their investments.

"The great thing for Six Park investors to know is that each client has a Holder Identification Number (HIN), meaning they have direct ownership of the investments," she says.

"Six Park have given clients two options. Sell down your holdings and the sale proceeds will be deposited into your linked Macquarie CMA or complete a HIN [holder identification number] transfer of your Six Park holdings to another broker.

If Six Park doesn't hear from clients by August 28, 2023, the company will sell down client holdings and the proceeds will be transferred to the client's linked Macquarie Cash Management Account (CMA), Brady says.

Irrespective of the option they go with, she recommends that investors use the change as a chance to take stock of their portfolio and investment goals.

"It's a great time to review your investments and make sure they still meet your needs and have the right level of risk for your goals.

"The general rule of thumb is the shorter the time horizon on your goal, the less risk your goal can handle, similarly, the longer the time horizon, the more market volatility your goal can handle generally speaking. Risk is always a personal decision, so give it some thought as to what will work best for you.

"You also want to understand any tax implications if you are selling out. If you move to another platform that doesn't rebalance your investments, how will you manage that in the future?"

For more information on different share ownership models and what they can mean for investors, check out our explainer on what happens if your share trading platform goes belly up.

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