Share Centre CEO questions 'sustainability' of rival challengers

Stockbroker boss questions ‘sustainability’ of rival challengers

I don’t question the ‘sustainability’ of the new brokers but I found this interesting so I thought I’d share.

  • Share Centre has over 300,000 retail customers in the UK and manages around £5bn of assets.

  • Wombat Invest is a thematic investing app letting users buy fractional shares in a collection of ETFs, but they got a mention alongside Robinhood, and Freetrade which let you buy individual shares.

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Interesting read! I mean: some of the questions are valid, but perhaps they apply to lean xo brokers like share centre too. Another way to put those questions might be: are you’re going to use your dad’s stockbroker or not?

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To me the core question is, are fintechs improving on the service?

For the last few years banks and brokers started to stagnate, now you find the older banks adopting features like card freezing, or less rigid savings accounts like ‘pots’.

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Of course he questions their sustainability. He has all to lose and not much to gain from them. :joy:


Interesting/uninteresting factoid:

Wombat make a point in the t&cs about the importance of the KIID in the Wombat app.

Yet EVERY (yes, 100%) of the 15 KIIDS for their ‘themes’ ( I hate that term) are WRONG/ OLD.

15 funds. Wrong. Scalable? Not sure their MiFID 2 Costs and Charges Disclosure will be worth the paper it’s written on.

It’s s front end to ETFs you can easily buy elsewhere.

Were Freetrade to list these ETFs why would I go to Wombat?

KIIDs being outdated or wrong is something you should mention to them. My comment was they are mentioned alongside services that let you buy individual stocks.

In terms of value proposition. Couldn’t the same argument be made for a lot of investment services?

You mean a lot of services are front ends? Yes, certainly. There is a place for them. Novice investors I would think particularly attracted to the seemingly ‘simple’ service. My issue is the middle-man type service. Intermediation sucks. If novices knew they could go direct for less then they would. Branding things ‘themes’ and kinda suggesting they’ve ‘packaged’ these for your convenience also doesn’t sit right with me. But hey-ho. Anything that gets people investing and educated in investing is ultimately a good thing.

I’d raise the KIID issue with them but history suggests people just don’t care!