Graham Tuckwell leads $3 million investment into robo-adviser Stockspot

"The fund managers make so much money out of these active funds and they have such a great oligopoly that there is no incentive for them to encourage people to buy something a lot cheaper where they will make a lot less money on."

He said that banks are also reluctant to promote index investing as it may affect their bottom-line and what they can return to shareholders.

ETFs are tradeable securities that match the performance of a specific benchmark. The size of the industry has ballooned since the global financial crisis when investors wanted surety for their investments.

But Mr Brycki said the $25 billion Australian industry is small by comparison with Canada, which is a similar size market and has $100 billion in assets under management.

"ETFs are something that banks and financial advice business should really be promoting to consumers. It's really in their best interests," he said.

This week Mr Tuckwell spoke to The Australian Financial Review ahead of the announcement that he was taking back full control of a suite of ETFs he launched as a joint venture with ANZ.

He criticised active managers who are paid well even when they don't provide above-benchmark returns and said that the JV failed to reach its full potential.

"There are a huge amount of active managers being paid 1 per cent to 1.5 per cent for matching or even underperforming the benchmark. There are the hedge funds who charge two-and-20. That's not fair at all," he said.

For Mr Brycki, the fact that Mr Tuckwell shares his world view made him the sort of investor he wanted to work with.

"He's always been passionate about index investing – in most cases it's in the best interest [of] consumers," Mr Brycki said

"When I met with Graeme and explained to him our vision of where we think financial advice [is] and how we're trying to go about changing the industry. He seemed very enthusiastic about it and it aligned with his vision."

Rajeev Gupta, partner at Alium, said that the manager has taken a "high conviction" investment in Stockspot.

"We are in the midst of a secular shift towards index investing as the last few years has demonstrated active investment management amongst large caps can generate sub-optimal returns," he said.

"The tailwinds for robo-advice are enormous."

Since Stockspot's inception Mr Brycki said the big institutions have come knocking, but he won't bite, instead preferring to join other like-minded investors.

"I've always been very cautious each time we raised capital ... I've seen in Australia and other parts of the world fintech businesses take money from other traditional businesses who actually are completely conflicted and don't have any incentive to grow your business," he said.

"Whenever I speak to the big organisation they get a pretty quick sense from me that I'm not looking for a partnership with them and I am not looking for a relationship."

Stockspot first raised $1.25 million in seed funding in 2015 and used it to market the product to investors unfamiliar with ETFs. The Series B funding will be used for marketing but also bringing new products to market, including one aimed at the self-managed superannuation fund market.