- Former Wise Employees Martin Sok and Mikhail Amer Launch Trading App Lightyear
- User £3,000. will not pay trading or forex fees for accounts up to
- Wise co-founder Taavet Hinrikus was an early investor in the app, which has been touted as the ‘Wise of the Business’.
- Early Monzo backer Eileen Burbidge is among a handful of new investors in latest funding round
Wise co-founder Tavet Hinrichs says that despite being a major angel investor and leading one of the UK’s most valuable companies, he never bought shares in a publicly listed company.
However, this morning the Wise chairman claims he has changed that with his first business with Lightyear – a new DIY stock investing platform in which he is an investor.
His former colleagues Martin Soak, Wise’s former product chief, and Mihkel Amer — engineering lead — announced plans to launch earlier this summer.
Today it will begin allowing users on its waiting list to start trading, as it aims to go head-to-head with the leaders of the upstart pack – such as eToro, FreeTrade and Trading212 – challenging established DIY investment platforms, Such as Hargreaves Lansdowne, AJ Bell and Interactive Investor.
Former Wise employees Mihkel Amer and Martin Sok came up with the idea for Lightyear after being disappointed with the existing apps and their hefty fees.
Lightyear is another commission-free stock trading app coming to the market to capitalize on the rise of DIY investment platforms.
It will only provide the ability to invest in stocks and will not give clients access to high-risk CFD trading.
This was largely born out of Sok and Amer’s own frustration with the current market, especially the pricey currency conversion fees.
After working on removing some of the hurdles associated with sending money abroad – formerly known as TransferWise – Sokk and Amer now want to apply the same principles to investing.
‘Having spent my career in financial services, I have seen the good, the bad and the ugly.
‘I believe retail investment in Europe is still very ‘ugly’, Sok has said previously.
‘We are talking about sneaky fees, low accessibility and complex products remaining as the status quo.’
Lightyear users will not be charged for foreign exchange fees up to £3,000 per month
For Hinrichs, this lack of transparency is precisely what has kept him from buying shares in the past.
‘While I’ve made a lot of private investments, I’ve never bought public stock in my life.
‘Part of it is because it’s never been so easy for my liking,’ he says.
‘When Martin and Mihkel Amer came over and explained their plans for Lightyear, I thought to myself that maybe it was time to start investing in public stocks, so I was going to take my first trade on Lightyear .’
Like the Wise co-founder, this new generation of investors is turning to big-name US stocks like Amazon and Tesla, but currency conversion means they are facing hefty fees on already priced stocks. Is.
Lightyear seeks to overcome this barrier by applying the fundamentals of Wise – by offering its users ‘free’ access to multi-currency accounts and global markets.
It states that users will not pay account or trading fees and forex fees, unlike most rival trading apps. After £3,000 per month, users will have to pay 0.35 percent in FX fees.
‘We are building an investment app with Europe in mind.
“We have so many different currencies and countries in Europe, so a good solution for FX is incredibly important and something that no one has done before,” says Sok.
‘Our multi-currency accounts allow people to deposit, hold and invest in multiple currencies, removing the need to constantly move your money back and forth which creates additional costs.’
Like its rivals Freetrade, Trading212 and eToro, Lightyear will give users the opportunity to buy fractional shares – a piece of a stock, rather than one or more entire individual stocks.
This enables investors to more easily invest in major stocks with big ticket share prices.
‘A high individual share price should not be a barrier to entry when it comes to building a portfolio.
“We have also removed all transaction costs, which encourages people to diversify their portfolios through fractional trading,” says Sok.
|transaction size||fx rate||fx fee||Other charges|
|eToro||£1,000||50pips||c £12 (1)||After 12 months with no login activity, any remaining available balance will be charged a $10 monthly inactivity fee. No open positions will be closed to cover the fee.|
|£5,000||50pips||c £46 (1)|
|£10,000||50pips||c £88 (1)|
|free trade||£1,000||0.45%||£4.50||Other costs for investors may include membership to their ISA (£3/month), GIA (free), SIPP (£9.99/month), or a Plus account (£9.99 including the cost of their ISA).|
|(1) eToro – for all end-to-end costs, i.e. deposits, opening positions, closing positions, and withdrawals (with a $5 fee).|
Monzo’s early investor backs Lightyear in $10 million round
Lightyear has clearly tapped into the demand for seamless access to global stocks as new investors seek to diversify their portfolios.
More than 5,000 people have signed on to its waiting list, which it launched just three months ago.
Starting today it will start giving users the opportunity to trade in over 1,000 global stocks.
The buzz about Lightyear and its claim to shake up Europe’s investment…