Trading 212 Takes On Disciplined Investing With 'Next Generation Product'

Trading 212, a leading European stock, ETF and derivatives trading platform, is rolling out a new line of automated and fractional share investing products.

Co-founder Ivan Ashminov spoke with Benzinga about his firm’s role in disrupting traditional finance.

About Trading 212

“We founded the company 16 years ago. It was a fintech before the term was coined.”

With no outside venture capital funding, Ashminov co-founded Trading 212 in a garage, launching first with forex and derivatives and later using profits to expand into equity investing.

In 2018, Trading 212 was the first in Europe to launch no-limit, commission-free stock and ETF trading for new and existing customers across all available accounts.

“We are also the first in Europe to launch free fractional trading. Since we launched fractional at the end of 2019, it literally exploded. Right now, we are the No. 2 financial app in the App Store, second to PayPal," Ashminov said.

"All the major banks and financial institutions — Revolut, Monzo, N26 — are behind us.”

The firm’s core product portfolio consists of: 

• No fee fractional investing in over 3,000 global stocks and ETFs.
• Low spread, zero-commission forex and derivative trading.
• Educational videos, community forums and blogs.
• Analysis tools including charts, indicators and economic calendars.

Agile Methodologies

In a discussion regarding competitive advantages, Ashminov spoke about being able to bring consumer-centric solutions quickly to market.

“Companies like Charles Schwab Corporation SCHW don’t seem to read enough Reddit and other communities to see that people don’t like the user experiences. If I worked for them, I could totally revamp everything in like six months, end-to-end, and literally make them own the market. But for some reason, they are incapable of doing it. They’re struggling with building consumer products.”

Ashminov said Trading 212 is successful due to its large education community, as well as its self-funding and technology capabilities.

"We are not dependent on external funding, a huge differentiator. I would also say our technology expertise is quite an advantage and differentiator because we are able to adjust our offering faster than anybody else in the market."

Now, with fractional trading, Trading 212 investors can have a diversified portfolio of stock market assets without having to outlay large amounts of capital, he said. 

“You can invest as little as a few pounds and not pay a single penny in fees and interest. Our clients appreciate that immensely.”

The Impact Of Coronavirus

Trading 212 is "under siege" in the volatile market, Ashminov said. 

“I don’t want to be the only person that thinks good things at the moment, but it seems that people see this as a great opportunity to buy.”

Trading 212 is onboarding thousands of investors and active traders, a sign that sentiment is high despite fallout from the coronavirus, the fintech's co-founder said. 

If economic conditions were to worsen, the firm has the financial cushion and wherewithal to lean out operations and focus on further innovation, he said. 

"Our clients have not lost faith in the financial markets at all. Even Tesla Inc. TSLA, which suffered a huge decline. Our client positions on Tesla are growing. People are optimistic the market will bounce in the next few months."

Next Steps For Trading 212 

“Our vision is to be the default app for any kind of trading and investing by retail consumers in Europe and the U.K.,” said Ashminov.

He told Benzinga that Trading 212 will be releasing a next-generation product in April, allowing investors to automatically deposit funds into a custom portfolio of companies on a scheduled basis.

"It’s like [an] ETF for … long-term investors. You get the benefit of disciplined investing. You get the benefit of DRIP dividend reinvestment." 

“Our main message is, if you start right now with just a few pounds per day and you are in your 20s, by the time you retire, you’ll be a millionaire. I think this is something that’s coming next month and will be a huge differentiator between us and everybody else in the market.”

To learn about Trading 212 diverse portfolio of solutions, visit trading212.com.

Photo by Andrea Piacquadio from Pexels.