- Commission-free trading apps like eToro, Freetrade and Trading212
- A new generation of DIY trading apps is emerging that are using technology
- We see how they stack up against more established challengers
A new generation of DIY investment platforms has emerged to challenge the challengers
A defining investment narrative of the pandemic is the rise of a new breed of DIY investor and the return of the individual stock-taking.
installed platforms such as Hargreaves Lansdowne And AJ Bell An increasing number of investors have benefited from this, with both reporting record numbers since the start of the pandemic. Meanwhile, rival Interactive Investor Is planning to join them by swimming in the stock market itself.
Hot on the Heels is a generation of new share trading apps that promise to ‘democratize’ the investment industry with low cost and sometimes free share dealing and the ability to invest less in big US names by buying fractional shares. Is.
In this group, the already established eToro, Freetrade and Trading212 have all seen their popularity and are widely regarded as the main challengers to more traditional DIY investment platforms.
But behind them is an even newer crop of platforms emerging that are looking to disrupt the industry even more. For these apps it is not just about making business as cheap as possible, but about using technology to build wealth, offer something different and challenge the challengers.
We look at how some of the newer apps, Wombat, Circa 5000, Plum and Lightyear, stack up against more established players…
Wombat isn’t really a new kid on the block. It’s been around since 2017, but it hasn’t received as much attention as other trading platforms.
Wombat promises commission-free trading with ‘no hidden fees’, but also says that users can invest in a number of thematic funds.
The theme includes British Bulldogs, featuring some of the UK’s most famous businesses such as Tesco, Barclays and Rolls-Royce, while The Money Maker theme includes some of the biggest banks in the world and gives Techee theme users the chance to invest in the likes of gives. Netflix, Google and Apple.
Wombat allows users to buy fractional shares in some of the largest companies in the world, including Shopify, Paypal, Netflix and many domestic stocks.
There is a minimum deposit of £10 to start investing on Wombat – plus the option to make a monthly contribution – and charges start to apply when the account value exceeds £250.
It then costs £1 per month plus 0.10 percent of the account value – billed monthly – plus a fund provider fee between 0.07 percent and 0.75 percent.
Wombat has boosted its investment credibility in recent months by appointing heavyweights from rival platforms Hargreaves Lansdown and eToro to its advisory board.
There also seems to be a push for financial education and responsible investing, so its auto-invest function — which takes in funds via direct debit — is a key distinction.
The platform also offers ’round ups’ like savings app Plum and Challenger Bank Monjo. This rounds up everyday purchases to the nearest pound and sends the excess change to the Wombat cash account. Learn more about Wombat here.
Freetrade, eToro and Trading 212
The Challenger Investing app in the UK topped the pack with three names, all offering free share dealing and some access to ETFs and investment trusts. However, they do not offer investment funds.
free trade Offering a wide range of UK and US stocks since its 2018 app launch, it has rapidly built up a large customer base with its duty-free share deals. It also has some ETFs and some investment trusts. Freetrade’s normal investment account has no fees, while its Isa one charges £3 per month and its Sipp (Self-Invested Personal Pension) fee of £9.99 per month. Some stocks, including many smaller companies, are only available on FreeTrade Plus, which costs £9.99 per month and includes ISA fees. It also gives customers an interest of 3 percent on cash amounts up to £4,000 in their accounts. A foreign exchange fee of 0.45 percent applies for foreign shares.
eToro is an established platform founded in Tel Aviv in 2007, which initially attracted attention with its social and copy business. It has since launched an investment service in the UK. The investment service has zero commissions on stocks and ETFs around the world, no account fees and absorbs stamp duty costs for UK stocks. In addition, eToro also offers high-risk CFD trading – which is this money, advising individual investors to avoid it (67 percent of clients lose money). It also offers cryptocurrencies.
Trading 212 A popular app offering free share trading in the UK since 2017. It offers over 10,000 global stocks and ETFs, including UK Stock Market-listed firms. There is also a 0.15 percent not in your home currency and a 0.5 percent currency conversion fee for trading stocks and ETFs. It has a feature called Pie, a way to build portfolios and rebalance them quickly, and an option to make regular auto investments. Trading 212 also offers an ISA at no charge. The app has a CFD trading function, which we again recommend people to avoid (76% of investor accounts lose money).
Lightyear is the latest commission-free stock trading app to come out of stealth mode, which was launched earlier this month before users were onboarded earlier this month.
While it’s launching into an increasingly crowded market, Lightyear founders Martin Sok and Mihkel Amer are well aware of how the fintech world works, both of whom formerly worked at TransferWise. .
Money transfer app co-founder Tavet Hinrikus is an early investor and recently made his first investment in publicly listed stocks through the app.
After working on removing some of the hurdles associated with sending money abroad…