Hatch review

Author: Kevin McHugh, Head of Publishing at Banked.

An introduction to Hatch

Launching in just 2018, Hatch already has more than 130,000 customers across New Zealand.

Hatch is the retail arm of New Zealand global wealth management business, FNZ, following the latter’s acquisition in 2021. The platform offers accessible investing into thousands of US shares and ETFs, with no minimum investment required and no subscription fees.

Hatch was one of the first share trading platforms in New Zealand to let users invest in fractional shares — meaning people could invest in just part of a share, instead of having to buy a whole share (which for some companies can cost hundreds or even thousands of dollars).

Learn more about fractional shares in our guide.

Investment options

Hatch lets you invest in companies and ETFs on 2 of the biggest stock exchanges in the world: the New York Stock Exchange (NYSE) and the Nasdaq.

Hatch currently only provides access to US share markets.

Shares

More than 4,600 companies are accessible through the Hatch share trading platform, including many of the world’s biggest brands.

These include:

Within the Hatch platform you can browse companies, track the performance of shares by adding them to your wishlist, and of course, buy and sell shares.

When it comes to purchasing shares, you have the following order options:

• Market order: A market order simply involves buying or selling a share immediately at its current share price.
• Limit order: A limit order lets you set the price you want to buy or sell your shares at. If the share price of the company reaches the price you’ve set in your limit order, the transaction will be carried out automatically.
• Stop-loss or stop-buy order: These work in an inverse way to a limit order. A stop-buy order allows you to buy a share at a higher price than it is currently (you may think if it reaches that point it will continue to climb), while a stop-loss order acts a little like an insurance policy by letting you sell your shares if they drop to a particular price.

Exchange-traded funds (ETFs)

ETFs are a group of investments bundled together in one fund, and Hatch has more than 1,200 of them available.

From fund managers including Vanguard, ARK, iShares and Blackrock, Hatch has a wealth of ETFs available covering a number of themes including robotics, clean energy, cannabis and many more. Learn more about ETFs in our guide.

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Pricing and fees

Unlike some of its competitors, Hatch has a flat fee for transactions. There is also no subscription fee for having a Hatch account.

Here are the fees involved in using the Hatch platform:

• Transaction fee: Also known as a brokerage fee, Hatch charges a flat fee of $3 USD for buying up to 300 shares. For any shares over 300 there is an additional 1¢ USD for each additional share. For example, if you bought 450 shares, the fee would be $4.5 USD ($3 USD plus $1.50 USD)
• Currency exchange fee: In order to buy US shares, your money must be converted to US dollars. Hatch charges a fee of 0.5% to do this.
  US tax filing: Investors in US shares must complete a US tax form (called a W-8BEN form). Hatch does all of this for you for a one-off fee of $1.50 USD and an annual fee of $0.5 USD.

Bear in mind that ETFs also include a management fee, but this is applied by the fund manager that set up the fund, not Hatch who just provides access to it through their platform.

ETF management fees are included in the price of the ETF. To find out what the fee is for a particular ETF, check the fund manager’s website.

Hatch performs well on fees when compared with Sharesies, Stake and others. Find out more in our share trading platform fee comparison.

Top features of Hatch

We take a look at the features that make Hatch stand out and are helpful to consider if you’re looking to open an account.

Educational content

As a platform that is aimed at people that are at an earlier stage in their investment journey, Hatch does a good job of guiding its customers through the world of share trading.

Firstly, offers a 10-day course that teaches you the basics of investing, from how to manage and mitigate risk, the different types of investments that are available, dollar-cost averaging, and more. You can sign up for this free course here.

It also hosts a wealth of website articles on different topics and users can choose to sign up for the ‘Fry Up’ – Hatch’s weekly newsletter summarising all the big (or just interesting) news in the world of investing.

The Fry Up is also published on Hatch’s website each week.

Kids investment accounts

Investing on behalf of children is becoming increasingly popular and Hatch provides an option for you to do so through its own kids accounts.

Hatch’s kids investment account fee structure is a little different to that of its regular accounts with a flat fee of $0.5 USD when buying between 1 and 50 shares. This can make it a little cheaper than its regular accounts if you’re buying fewer than 300 shares, but is the same for more than that.

You can only set up a kids account for a child you are the legal guardian of. While you can add funds to the child’s Hatch account from any bank account, withdrawals from the account can only go to the child’s bank account.

To open a Hatch kids account you will need to have your own account first. You’ll also need to provide details about the child and you’ll need to upload a copy of their birth certificate or a guardianship order.

Flexible auto-invest

Auto-investing allows you to make the same investment on a regular basis of your choosing. As long as you have funds in your wallet to carry out the transaction, your investment will go ahead.

While auto-invest functionality is not unique to Hatch, it is more flexible than some other platforms. Through Hatch, you can choose to auto invest in any of the thousands of US companies and ETFs it has available, rather than being limited to a particular selection of securities, as is the case with Sharesies.

Auto-investing can simplify investing and is a helpful way of practising dollar-cost averaging whereby investments are spread out over a longer period, minimising risk.

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Is Hatch safe?

Hatch takes a number of important steps to ensure your money, shares and account are safe when using its service.

All data the company holds is encrypted and stored through Amazon Web Services (learn more about the security of the AWS platform). Hatch security tests its service and conducts regular security audits.

Hatch also offers two-factor authentication (2FA) which ensures someone cannot access your account with your username and password alone. 2FA is optional, but is an important extra level of security that will help you keep your account (and investments) secure).

What happens if Hatch goes bust?

Through Hatch you own any shares you invest in and you maintain voting rights over those shares. However, Hatch employs a custodial system through which the shares are held in the name of FNZ Custodians Limited by Hatch’s broker-dealer, DriveWealth.

This is a common practice and DriveWealth provides the same service for other NZ share trading services, including Sharesies and Stake.

If Hatch were to go under, you would continue to own your shares as they do not hold them in the first place. You would have the choice of transferring the shares to another platform or selling them.

DriveWealth is a registered member of the Securities Investor Protection Corporation (SIPC), a non-profit industry membership organisation. SIPC provides insurance to the customers of its members if the brokerage were to become insolvent. In this case, customers are protected up to $500,000 USD for their investments and cash.

What you need to sign up for an account

We break down the criteria you need to meet to open a Hatch account and the information you need to provide.

• Age: You must be 18 to open a Hatch share trading account. If you’re younger than this, a parent or guardian could open an account on your behalf as a kids investment account.
• Identity: You must have a passport (a non-New Zealand passport is okay) or an NZ driver’s licence.
• Bank account: You can deposit funds into your Hatch account from either an NZ bank account or a US bank account.

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