Andrew Bresler, the new UK CEO of Saxo, on the importance of diversified investing

Richard Berry [00:46] 

Welcome to Good Money Guide. Today we’re joined by the new UK CEO of Saxo, Andrew Bresler. Thank you very much for joining us. 

Andrew Bresler [00:52]

Thank you, Richard. It’s very good to be here.

Richard Berry [00:55]

Andrew is actually the third UK Saxo CEO we’ve interviewed. We’re going to have a chat about the new goings on at Saxo, their approach to investing, what’s happened over the last few years. We’re going to find out a little bit more about Andrew and how he likes to invest.

Andrew, how are things going at Saxo?

Andrew Bresler [01:26]

It’s a very exciting time for us at the moment. We have really doubled down on our focus on the investor client base and we’re starting to see a lot of traction in that space. There’s a lot going on. We’re very busy executing on that. We’ve got a lot of cool things coming up in the next quarter.

Most specifically our new investor platform launch, which speaks to those persona clients. So, a busy period and exciting one.

Richard Berry [01:50] 

We’ll get onto the investing in a minute. You are three months into the job, but you’re alumni, aren’t you? This isn’t your first time at Saxo, you’ve been with the business before.

Andrew Bresler [02:00]

That’s right. I did a couple of years stint in Singapore as one of the global sales trading team. That’s the team that is almost like your voice dealing of the old days. That was a fun time.

But now we’re back in the UK, happy to be back and settled here.

Richard Berry [02:15]

You don’t see much of the voice dealing anymore, do you? You were saying earlier 99% is online.

Andrew Bresler [02:21]

I’d say it’s probably even north of that. Very much a digital platform first.

Richard Berry [02:27]

Let’s get into the changes at Saxo. Saxo has always been traditionally a trading platform that’s catered to high-net-worth individuals, professionals and institutional customers. But now you’re moving more into the investing space.

Why is that? Is that your remit as you’ve come in, or is that just the way the business is going?

Andrew Bresler [02:47]

We’ve historically been very well known at servicing that specialist type of trader. That’s because of breadth of product, and rich functionality in the platform. We’ve always really gone after that in the market. It’s been our bread and butter for the last couple of years. But over the course of the last year and a half, we’ve made a very strong push into the investor space. That’s driven by a couple of things.

Firstly, that’s the way the market is going. If you look at the number of trading clients today, what you see across the industry as a trend, is a relatively stable base of consistent happy trading clients, a declining number of new clients that are coming and trading more of your leverage products, then a declining number of that reactivation of your dormant clients. There is a general trend of trading clients becoming less like traders and maybe more like investors. Part of that I think is driven by regulation.

Consumer duty at its core is all about really good outcomes. I think you can see on any, ours included, website where it comes to leverage products, that doesn’t necessarily incentivise the best type of outcomes. Regulation is moving in the direction to try and potentially restrict some of that for a large portion of the population that aren’t really ready to trade those types of products. That’s been a significant change.

Then there’s an education component. People are increasingly becoming more financially literate, understanding the risks that are associated with some of those types of products. So, they may be shy away a little bit from some of them. I think that’s a bit of a broader trend. Ultimately, I think the move towards that is both regulatory driven, it is also a trend with the industry because of education.

Then I think the final piece of that puzzle, it just makes commercial sense. Because what it really does is align both our interest and the investor, or the client’s, interest. That is long term, happy relationships where we grow together, we have a share of wallet with you that we hopefully increase, you build your overall net wealth and ultimately get to a place of financial freedom. I think that is a place that everyone can get behind. That’s why it’s a real focus for us.

Richard Berry [05:11]

It’s always been one of the problems with running a trading platform or a brokerage that deals in in high-risk products. There are a lot of people doing it that probably shouldn’t be doing it. We were discussing earlier the market for active traders is actually quite small, the long-term traders that are both profitable for themselves and brokers. Whereas a huge percentage of that market shouldn’t be doing it, don’t know what they’re doing and should actually be investing anyway.

Andrew Bresler [05:39]

Ultimately, you want the right outcomes as does the regulator for your consumer. That segment of clients who trade in those products without the knowledge of the risk that they are taking, the vast majority of them across the industry ultimately burn out. Now that’s bad business for us because they don’t continue to generate the revenue that we want.

But it’s a really bad outcome for the client as well. Aligning both of our interests, that’s core to our principles.

Richard Berry [06:06]

What does your customer base look like at the moment? Is it gradually transitioning into investors, or are you ushering them in that direction? 

Andrew Bresler [06:16]

We cut prices earlier this year before I joined, in a very significant way. That was across all of Saxo and all of our geographies, and very meaningfully here in the UK.

That message has really resonated with the investor universe. We’ve seen a fairly rapid transformation from being more trader heavy into more investor heavy. North of 80% of our client base today would be classified as an investor persona within our universe. We’ve historically appealed to, maybe because of some of the prestige within our brand, maybe because of our Danish heritage, we’ve appealed to your and my age group a little bit more and above.

That’s not to say we exclude the younger generation. We have seen more younger generation come in, particularly enticed by the lower pricing that we now offer. But the lion’s share of our population today remains unfortunately male, middle and older men who are more classified as your investor universe. Now, we bifurcate your investor universe into two buckets of those.

We think of those as your traditional buy and hold, they hold a handful of stocks and they watch those grow. Then we think of, what I would call, your active investors. Those that have a well-diversified multi -asset portfolio of predominantly cash products, who tend to actually do well. They’re the best type of client for us. We have seen in that particular segment, based on the pricing and the push that we’re doing, about a 35 % growth year on year.

That’s proof that the concept is working in terms of moving into that space. It’s also fantastic for us because those clients traditionally have a way better outcome. Your more diversified clients, those that have three or more products are typically outperforming all the rest of our client base who have just one or two.

Richard Berry [08:12]

When you say products, you talking about equities, bonds? 

Andrew Bresler [08:15]

Yes, asset classes. If you’ve got an ETF, an equity and maybe some bond exposure in there, one, your performance is better, both in ultimate alpha returns, but also in downside risk management, you’re seeing a lot better outcomes for that. Your guys that are heavily concentrated in single securities, all the favourites at the moment, they are experiencing a lot more volatility than those that are multi -asset. It’s really a win -win for us. When you become an active investor for us, the client is having better outcomes, but so are we.

Those clients tend to bring more wallet share to us. They tend to bend more with us as they trade in more products, and they’re growing their wealth as well. It’s a perfect setup for us and we’re really seeing the proof in the pudding. We’re still very heavily domiciled within London. The vast majority of our clients come from within the M25. But that’s not to say we don’t attract clients from all over the UK.

Richard Berry [09:11]

You mentioned mainly looking after people like us, but obviously, the world is about diversification as well as investing. So, what are you doing to appeal more to early-stage investors, different sorts of investors and also compete with this new breed of zero cost platform that almost have a cult like status among their users?

Andrew Bresler [09:45]

I think there’s two parts to that. In terms of appealing to either that new breed, or young up and coming investors, or even older ones, one piece of feedback that we’ve got from sites exactly like yourselves, but also from the industry, is our offering has been very much focused on that trader persona. It does feel like a trader setup when you first log into it. You’ve got all your watch lists, you’ve got your exhaustive charting features, you’ve got everything you need to be a really active trader.

For many who are starting their investing journey, that’s a little bit confronting. So, at the end of this month, we’re launching our new investor platform in the UK. It has all of the richness from a product perspective that you would expect to get so you can build a beautiful multi -asset portfolio, but it’s really simplified.

It’s very intuitive, it’s very easily accessible for anyone who hasn’t started their investing journey and doesn’t need to be in there on a day -to -day basis. We’re super excited about that. We can appeal to them in a user experience format that we’ve never been able to do before. Then the second part of it is that zero cost component.

For me, there’s no such thing as a free lunch. You are paying fees in some way, shape or form. Even though you may not be paying a zero dollar on the execution of that security, are you comfortable that you’re not paying high fees in terms of your FX conversion charges? Are you comfortable you’re not paying high custody fees? Are you comfortable for example, that you’re not paying for that flow to be b-booked potentially? So, there’s no such thing as a free lunch.

I think we compete because our prices are very sharp across all of the asset classes, I think genuinely you would be hard pressed to find a broker where you can build a fantastic diversified multi -asset portfolio, across a swathe of the products, at the price point that we’re able to offer it. That’s a compelling proposition. A really simple user experience, with really good pricing across a multi -asset platform. I do think we’re really best in class there.

Richard Berry [11:54]

What do you think people should be looking for in their broker or investment platform? Let’s look at high worth individuals and those just getting started. Is it the same thing? 

Andrew Bresler [12:09]

I would argue it’s probably the same thing. As a starting point, is this a safe place for me to put my money? Are they going to be around for the next five to ten years? Saxo has been around for 30 years, just north of, and we plan to be around for at least another 30. We are very heavily regulated. We meet all the right obligations.

Two is this a place where I can grow my money? That means I don’t just get a single asset class offering, I get multi -asset class offering. As I grow from being comfortable investing in, for example, a stock, I’m now able to learn about investing in ETF, or funds, or bonds or whatever other asset class you’d like to do.  And grow both your knowledge base, and your experience, and your investing capabilities. I think we do that very well. Many of our competitors that are really sharp or zero cost in one space, they tend to only really offer that single vertical. I think that’s a compelling proposition. So, that’s product.

Then it’s pricing. Am I being charged in a fair way for what I’m accessing? You need to know what that looks like. I think what we’ve done with our pricing cuts really speaks to the idea that now we have a very sharp set of pricing for that multi asset portfolio. Those are your hygiene entry factors.

There’s stability of the platform, that’s another hygiene one. We have amazing uptime of our platform, so you know that in the most volatile market circumstances, I can access it and make a decision on the fly. That’s, as you would say, we all sell biscuits in some way, shape or form. Those are table stakes. You go through that checklist to say, let’s whittle out the chip from the chaff. Then there’s the component of, what is it that’s really your USP?

I think what we do in terms of inspiration to you, within the market is probably second to none. We have amazing inspiration in terms of thematic baskets that you can find to self-direct your investing. There’s a toolkit to enable you to do that. And again, this crosses all of your asset classes. We’re probably best in class from an asset class perspective. We do a really good job of helping you find that investment. If you’re a high net worth individual, or you’re just getting started, I think your entry criteria are the same.

We see the problem statement all the time where people arrive, they’ve gone through the onboarding flow, they’ve submitted their source of funds, and they’re now ready to go. They arrive on the platform; they don’t know what to do. So invariably they gravitate to where there’s high concentration, you take on more risk. Or they come to us and they’re able to see all these amazing things that you can learn to trade and learn to understand different products, and get the inspiration that you need.

Richard Berry [14:50]

Is there an asset class that’s become particularly popular recently that’s surprised you? 

Andrew Bresler [14:56]

I think what has surprised me is the decline in CFD a little bit. As I said, that keeps getting concentrated in a certain area. We know that this year we have some of the most concentrated equity markets in history. It’s frighteningly concentrated. That continues to surprise me because people are still very comfortable in chasing those high valuation stocks that have performed, but they take on a lot of volatility.

I think the one product, particularly if you’re thinking about high-net-worth individuals, that continues to surprise is the investment within the bond space. Adding that diversification into your portfolio and the ability to do that electronically in smaller clip sizes. That’s a really cool piece of kit that’s starting to grow.

Richard Berry [15:46]

I do remember your bond offering from when I had a white label. I think you’ve got one of the broadest access to the bonds market of everyone. You could pretty much invest in anything you wanted. 

Andrew Bresler [16:00]

I think we’re probably unrivalled in it. We do have the ability to do some of that offline as well. You can access a huge amount digitally, but you can access even more through our global sales.

Richard Berry [16:11]

Particularly in bonds, because there’s a lot of high minimum denomination bonds that have very attractive yields but are really difficult to trade online. How do you deal with that? Can you trade those online or do have to phone someone up? Can you do it the old-fashioned way if it’s a thin market? 

Andrew Bresler [16:27]

We still offer that, but I wouldn’t say that’s a service that we look to offer in great quantum. That’s not really a scalable solution. Ultimately, our motto is digital platform first. We’re increasingly trying to put more bonds on the platform that you can trade electronically, and really drive clients to be able to execute digitally in that space.

Richard Berry [16:49]

Let’s find out a little bit more about you and your background, and where you’re hoping to take the business. How did you get started in finance? What was your first brokerage experience? 

Andrew Bresler [17:00]

I’ve been in brokerage, wealth management, finance for 20 plus years now. I was an FX trader back in the heydays of pre -global financial crisis. I did that both here and in Hong Kong, and then here again. As I said to you earlier, that was fantastically fun time, but also a young person’s game. I think if I was to be honest, it probably wasn’t exactly my art form. After that, I left the hedge fund industry and that was my time at Saxo where I was in sales trading. I absolutely loved that job.

Sales trading must be one of the most fun jobs around. You are right at the sharp point of what’s going on in financial markets. We have a huge swathe of very interesting clients whether they be family offices, hedge funds, FinTechs, white label solutions, you get to cover the whole gambit of it. At the end of the day, you go home with a flat risk book and you can sleep easy at night. So, the combination of that is great

I left that and I went to a US bank where I ran retail brokerage for them across Asia and Europe. That was really fun. You learned a lot about at scale brokerage and some of the inefficiencies that are there. Then I spent some time in the tech industry as well.

Richard Berry [18:26]

Obviously in the business working for a broker, you can’t trade and invest as much as you’d like because of various compliance reasons. Over the last two decades, do you remember your best and worst investments?

Andrew Bresler [18:44]

Tragically I have a lot more worse investments than best. I’d probably say that has led me to be a fairly boring investor.

Richard Berry [18:56]

Do you think this how everybody starts? Everybody cuts their teeth on trading and then eventually grows up.

Andrew Bresler [19:03]

Ultimately if you ask me for a piece of advice as to what’s the one thing you shouldn’t do. It’s really there are no, particularly in financial markets, get rich quick schemes. I’ve tried a few of them. They would be my worst. Whether that be pending mining stocks or unknown crypto coins, I’ve had a go at them. They’ve never really worked out very well, they’re certainly volatile experiences.

Some of my best, as I said, I’ve become very boring. I’m just a happy passive ETF portfolio now. I would turn around and say, maybe it’s not your classic investing, but one of the things that I’ve tried to invest in myself a lot over the years is education. I’m constantly doing courses and learning more. That has been incredibly valuable because it helps accelerate your maturity and then ultimately make better decisions on investing.

Richard Berry [19:56]

I think education’s great, but I do think you need that experience of loss in some way to realize that there are no shortcuts in this world.

Andrew Bresler [20:07]

Unequivocally, yes. If you want that experience, I’d recommend trading penny mining stocks as a way to really gain that experience.

Richard Berry [20:15]

I used to love the mining stocks, we used to do a few IPAs of them when I was a stockbroker. I remember we had one where the guys came in, they were raising some money to come to the AIM market, it was a fairly standard MO. They come in and say we need to raise 30 million quid. We’re going to dig a hole in the ground. If we find oil, it’s going to be a 10, 20 bagger. If we don’t, it’s going to go bust. That was generally the way it worked. But you’d have some really flash guys that would come in and say we’re going to mine for gold. they’d throw some gold nuggets on the table, and sprinkle these all over the site.

Andrew Bresler [20:55]

My story was along the lines of a potash mining company, I don’t even know what potash is. I thought that was the opportunity that I needed. It turned out it wasn’t. I think I’ve had the school of hard knocks on that one. I’ll go back to education and long -term investing.

Richard Berry [21:15]

So that’s what’s not to do. If there’s one tip you could give investors that you think would make them better at what they do, or one thing that Saxo offers that you think would really appeal to investors, what would it be?

Andrew Bresler [21:28]

I’m going to sound like a broken record on this, but diversification and taking advantage of multi -asset. It is genuinely true that our best performing clients are the ones that are more diversified. Be smart about that. Make sure you’ve got the right exposure to multiple geographies, multiple asset classes, multiple security types. The outcome will be riding the tougher storms a lot more smoothly and ultimately better returns for your portfolio. I have this view of what we do is really genuinely about building financial freedom.

The pathway to doing that is not potash mining penny stocks. It is good diversified portfolios where you really put some thought into it. I think the vast majority of retail investors don’t spend enough time thinking about what they’re investing in. They will read a newspaper article and happily put some of their hard -earned dollars into that. If you take the time on a weekend to spend an hour or so learning about it and educating yourself, you will probably make infinitely better decisions. That would be my guide.

Richard Berry [22:30]

Leading on from education, we always ask for a book recommendation, whether or not it’s helped you personally, or you think this can really explain to investors what’s behind the curtain. Do you have a book that you think people should read that can make them better investors? 

Andrew Bresler [22:51]

I would say maybe not better investors, but better thinkers. It’s slightly corporate. I’ve just finished reading for multiple times, Satya Nadella’s Hit Refresh book. He wrote that about a year or two after he took over Microsoft, and the refresh that he’s done on the culture there. It’s deeply personal because he goes into a lot of his family and the death of his son.

It’s incredibly inspirational in terms of being a good leader, enacting change and culture. It certainly allowed me to take stock of who I am and think about how I act in a day -to -day basis within the office, but also how I act in a day -to -day basis in life. And ultimately, I think if you’re happy in both of those components, you’re going to be a better investor and more comfortable with who you are. You’re not trying to be someone else.

Richard Berry [23:45]

Andrew, thank you very much for talking to us. It’s been awesome.