To me this just makes it even more complicated, Iām guessing this means there are charging brackets depending on find value? Not only will there be headline advertised % charges they may not apply to me and if I want to compare between providers I need to understand their not so simple charging structures.
If Iām at the bottom of the bracket I am again getting a lighter charge than someone it the top for the same service. Unless i have the wrong end of the stick it sounds like a headache for someone starting or switching.
Itās honestly simple. Have a try by checking out one of their websites, go to the fees section and even use the fee calculators if need be. Iāll be amazed if this is deemed complex.
Unfortunately, robo-advisors have been incredibly slow off the mark to gain active users. Which begs the question, why are millennials not jumping on them as quickly as they have with Robinhood, Trading 212 and eToro which all have +200,000 active users? Just to give you an example in Oct 2017, Weathlify had 10,000, Scalable Capital had 6,000 and Nutmeg, thatās been going since 2011 only has about 49,000!. Something must be amiss here with the Robo-Advisors. You can even see this with Betterment, Wealthfront and Wealthsimple. Very slow user growth. From an investor perspective it seems more attractive to invest in the Easy trading platforms, they can eventually evolve into a kind of ETF advisory, but this is not the best way to start and I think we still have something big to learn in this space.
Another screenshot from the same article, but I think itās more a underlying issue of financial literacy, apathy, inattention, fear of the unknown, focus on getting on the housing ladder, dominance of cash savings, etc:
Addition: I also think awareness is a big thing and therefore why I think marketing/advertising is so important. More people know about Cryptos for example because they got a tonne of free public attention in the mass media in Q4 2018 where you just couldnāt miss them.
So while itās great having a great product, itās no good if nobody knows about it other than the already financially savvy such as all of us in this forum.
The whole Ā£1 minimum is just marketing speak Itās all about education, convincing people it doesnāt have to be so difficult. Most people just donāt understand how this all works and a bank interest rate is fixed and communicated ahead of time and you wonāt see your investment down some points.
Thatās why I think Robofunds still have a place in all of this for their simplicity, well at least for now. But yes as per the meme earlier on in the thread itās boring and people might not look for Robofundsā¦
I meant the way they show their fee and then the underlying fund fee. I know they separate the fees because they rebalance and buy more and so the fund fee is charged per/transaction while their fee is charged per/annum. But still a bit confusing at first glance.
Just bear in mind their fees are 0.4% - 0.7% for every single customer. Freetrade will need a bigger customer base to justify the valuation.
As it seems, the per customer valuation for Moneyfarm is circa Ā£7,500, whereas Freetradeās would potentially be more conservative, closer to Ā£1,500 - Ā£2,000, similarly to Robinhood.
As @Adam recently said, even if up to 15,000 people form the waiting list will convert to customers, that would prudently justify the current Ā£20m valuation. And bear in mind @Viktorās projection of 100k customer base by the end of first yearās trading. Now do the counting of expected future growth
Itās all about education, convincing people it doesnāt have to be so difficult. Most people just donāt understand how this all works and a bank interest rate is fixed and communicated ahead of time and you wonāt see your investment down some points.
