New competitors: Invstr and dabbl


#1

Hi Freetrade community.
After the success of Robinhood app in US many companies are trying to replicate the business model of low cost investing, Freetrade is doing a great job on it but now the competition is rising other companies like invstr, dabbl, revolut are trying to copy this
business model. Is this the birth of an entirely new market?? Are Big Brokarage firms of today going to reshape their business model??


#2

We discussed Dabbl briefly here Dabbl Invest


(Vladislav Kozub) #3

Very valid questions, you could find some relevant discussions about Revolut and Dabbl (as Rod suggested above) specifically.

Generally, I would have thought more brokerage firms will establish sooner or later, mainly depending on an increased demand across the UK population.

Hard to say yet, there are no challenger brokers with a big customer base yet so HL and others probably do not think of them as a threat (yet).

But if we look at banks, Monzo is about to hit 1,000,000 users and on track for 3,000,000 next year. Hence you could see that the legacy banks started reacting and want to replicate those startups in some shape or form.

It may happen to the brokerage firms too, but I do not think that a startup that is created in the vacuum of fully operational systems and endless financial and human resource support will have a chance against self-made startups like Freetrade.


#4

Not heard of Invstr but they say they have been around since 2013, had a very quick look:

From Invstr’s footer

Invstr is a technology platform, not a registered broker-dealer or investment adviser.

They also have a very different approach to Freetrade, see

Compete for the top spot on the weekly leaderboard and see how you stack up against the rest of the community.

under “Investment Game” and “Leaderboard” on https://invstr.com/app/


#5

Once new market entrants are making progress by offering simpler, easier to understand and cheaper/freemium services (Freetrade I hope obv, plus maybe some of these others) you’d guess we’ll see incumbents respond, either by improving their own services or by buying the challengers.

Consolidation has started already. Interactive Investor and TD have already merged, and I think rplan gave up this year, which suggests that direct-to-consumer margins for platforms might already be pretty tight. (Or maybe: tight for everyone who isn’t HL: they’ve 92b in AUM, 39% of the non-advised execution market ) And there will be more competition in the (robo)advised space: I think Barclays, Invesco, Vanguard are all offering GIA/SIPP-with-inhouse-funds either recently or will do soon.

(I am mixing up direct execution platforms, advised platforms and brokers etc a bit here but I think to the consumer there aren’t clear boundaries between them. Or not to this consumer at least.)