The long awaited Monzo / Freetrade tie up ?
Sounds like they’re skipping past Freetrade and going straight to the fund managers.
The article states
so that customers can buy low-cost funds rather than picking individual stocks
so maybe it’s not very close to Freetrade.
On the other hand Monzo hasn’t really said anything officially so I guess we just wait…
Fingers crossed freetrade can get into this marketplace and get the exposure it would bring. The article doesn’t mention freetrade unfortunately, but perhaps they’ll have a freetrade offering too. The interesting thing I think will be the branding, and ways of selling the risk to customers.
People choose terrible rates on cash ISAs because they massively over-estimate the risk of stock market investing over the long term, so the trick is to persuade them that returns of say 5% a year are within reach and not really very risky at all if you don’t need your money immediately.
I would ignore the text of the article ( which is padded out fluff ) what is interesting is that Monzo want to move into the investing area.
Monzo have had management permissions for Stocks and Shares ISAs and the junior version for several months. It makes sense as part of their financial hub model to include investments. Might open junior isa’s with them since they’re not available with Freetrade yet
Would be a bit weird if they allow Junior ISA accounts before Junior bank accounts. I imagine adult products will come first.
Probably but Junior ISA would be an integration not a product they’d have to create themselves, only the KYC aspects, and I have no idea what that would entail
Agreed, if Monzo is to be successful in its its hub and spoke model then it should have tie ups with many investment companies, Freetrade, Nutmeg etc included.
If they did have a product which went direct to Vangaurd, say, then I think it’s very likely you’d have to pay more than if you went to Vangaurd yourself, as Monzo would take a cut as a middleman. This would likely be a percentage based fee similar to similar to their model on savings products.
Both OakNorth and Investec created entirely new products for Monzo so the rate customers got wasn’t reduced compared to going directly to either for savings. The fee Monzo gets is not due to a reduction to the rate the customer gets. I can see something similar here, a new product created just for the market place