When PIE funds are not enough — how the direct investing platforms work, what FIF means for each of them, and which one suits your situation.
Last week I covered InvestNow and Kernel, the two PIE fund platforms I think most NZ investors should start with. The core advantage of both is that they hold NZ-domiciled funds that handle FIF internally, which means you do not declare anything personally for tax purposes. For a buy-and-hold investor building a long-term portfolio, that structural simplicity is worth a lot.
But PIE funds are not the right answer for everyone. Some investors want to hold individual stocks. Some want direct exposure to international ETFs not available in a NZ-domiciled wrapper. Some are comfortable managing their own FIF position in exchange for lower fees or broader market access. For those investors, the direct investing platforms are the relevant category, and the trade-offs are meaningfully different.
When you hold assets directly through a platform like Sharesies, Hatch, Stake or Interactive Brokers, you are holding the underlying securities yourself rather than units in a NZ-domiciled fund. That has three practical consequences.
None of these are reasons to avoid direct investing. But they are reasons to go in with your eyes open.
Sharesies is where most New Zealand investors start, and for good reason. The mobile experience is genuinely excellent, fractional shares make it accessible from small amounts, and the platform covers NZ, Australian and US markets in one place. For a first-time investor building confidence and learning how markets work, there is nothing better suited to that stage.
The fee structure is worth understanding before you scale up. For NZ and Australian shares, Sharesies charges 0.5% per transaction capped at $5. For US shares, a monthly subscription applies. Below roughly $3,000 invested regularly, this is competitive. Above that, the per-transaction cost on regular contributions starts to compound. An investor putting $1,000 a month into US ETFs through Sharesies is paying $5 per transaction, or $60 a year in transaction fees alone, before the subscription cost. At InvestNow using a Smartshares fund, the same investment costs nothing in transaction fees.
If your overseas holdings through Sharesies are approaching NZD $50,000 at cost, it is worth checking your FIF position before the next tax year starts. The threshold is based on original cost, not current market value, and applies across all your overseas holdings combined — not just those on one platform.
Beginning investors building their first portfolio, or investors who want a polished mobile experience and access to NZ, Australian and US markets in one place. Less suited to investors making regular large contributions where transaction fees accumulate. Sharesies provides FIF reports for overseas holdings, which reduces the tax reporting burden.
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Hatch was built with a clear focus: direct access to US-listed shares and ETFs for New Zealand investors. That clarity is also its limitation. If you want NZ or Australian shares, or NZ-domiciled PIE funds, Hatch is not the right platform. If you want US equities specifically, it does the job well with a clean interface and a transparent fee structure.
Hatch charges a flat fee per transaction rather than a percentage, which makes it more cost-effective than Sharesies at larger trade sizes. The platform also provides an annual FIF report showing both FDR and CV calculations, which is one of the better tax reporting experiences among the direct investing platforms.
Assets are held through DriveWealth, a US-based custodian. That is worth understanding before you commit significant capital. DriveWealth is a regulated entity, but your assets sit outside the NZ regulatory perimeter, which is a different risk profile from a platform that holds assets in NZ custody.
Investors who want direct access to US-listed shares and ETFs and are comfortable managing FIF obligations. The flat fee per transaction makes it more cost-effective than percentage-based platforms at larger trade sizes. Strong FIF reporting reduces tax complexity. Not suitable for investors who want NZ, Australian or PIE fund access.
Stake is an Australian platform with a growing NZ user base. The experience is broadly comparable to Hatch: clean interface, direct access to US and Australian listed securities, competitive fees. For investors who have looked at Hatch and prefer Stake's interface or fee structure, it is a credible alternative.
The FIF and custody considerations are similar to Hatch. Stake holds assets through a US custodian structure, which means overseas holdings count toward your FIF threshold and the custody chain sits outside NZ. Stake does not offer NZ-domiciled PIE funds, so investors using it for international exposure need to manage their FIF position directly.
One practical difference worth noting: Stake's NZ FIF reporting is less developed than Hatch's. If automated FIF report generation matters to you at tax time, that is worth factoring into your decision.
Investors who want direct US and Australian share access and prefer Stake's interface or fee structure over Hatch. FIF obligations apply in the same way as Hatch. Check the current state of FIF reporting before committing if that is important to your tax workflow.
Interactive Brokers sits in a different category from the other three. It is not a platform designed for retail investors making regular contributions to a long-term portfolio. It is a professional-grade trading platform that happens to be accessible to NZ retail investors, and the distinction matters.
The market access is unmatched. US, European and Asian exchanges, options, futures, bonds, and a currency conversion facility that is significantly cheaper than anything available through NZ retail platforms. For investors who need that breadth, nothing else comes close.
The fee structure is competitive at larger portfolio sizes, and the IBKR Lite tier has made the platform more accessible in recent years. The trade-offs are real: the interface takes time to learn and is not designed for occasional use. Tax reporting is largely manual — Interactive Brokers provides transaction data but does not generate IRD-ready FIF reports.
Interactive Brokers is the right answer for a specific type of investor. Knowing whether you are that investor matters before you open an account.
Experienced investors with portfolios above $100,000 who need broad market access, want to minimise FX conversion costs on large trades, or require access to instruments not available on NZ retail platforms. Tax reporting is manual and requires more effort or external help. Not the right starting point for most investors, but the right answer for a specific profile.
The most common combination is a PIE fund platform for the core portfolio — InvestNow or Kernel for the NZ-domiciled fund exposure that handles FIF internally — alongside a direct investing platform for international equity exposure above or below the FIF threshold. That is not a complicated arrangement. It just requires being deliberate about what each platform is for, and tracking your total overseas holdings across both.
The $50,000 FIF threshold applies across all your overseas holdings combined, not per platform. Use the calculator to check your total position and compare FDR vs CV for 2025–26. Calculate my FIF tax →
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