Wealth manager Moneyfarm is expanding its offering with the introduction of a share trading service. The money manager’s Co-founder and CEO, Giovanni Daprà, took to LinkedIn to announce the launch of the new service, which will initially be rolled out to UK customers, as part of a phased deployment to the entire Moneyfarm customer base.
Investing in individual companies
The new share trading and investment service will seek to differentiate itself from the competition with a focus on longevity, rather than the short-termism, that’s often associated with online equity trading.
Moneyfarm will encourage its customers to take a holistic approach to investing in shares, through the platform.
With a view to enabling better decision-making and risk management, as well as reducing overall trading costs.
The firm will try to guide clients, and where possible steer them away from behavioural and investing mistakes.
Biases such as loss aversion, under which traders snatch at profits but run losing positions, are one of the main reasons that novices and newbies lose money in the financial markets.
Highlighting the pitfalls of these and other common mistakes and miscues, should help to achieve better outcomes if customers take those lessons on board.
Moneyfarm already offers investor education on its website where you can find articles on topics such as starting out in investing, investment risk, liquidity, financial indices, bonds and interest rates and much more.
The educational or insights section of the Moneyfarm website also contains guides to investing, ETFs, the broader financial markets and financial planning.
There is also an area dictated to behavioural economics. The science of understanding why investors and traders behave the way they do.
What the consequences of that behaviour are on final decision-making, and how that behaviour might be corrected.
Behavioural economics can help to explain the cyclicality of investing, how and why markets move from bullish to bearish, risk-on and risk-off trends, and perhaps most importantly the factors behind the creation and maintenance of stock market bubbles.
Commenting on the new service Mr Daprà said:
“In a world where investors are bombarded with choices, clarity and simplicity remain rare commodities, and as we always say, it’s not about how it’s about who with.”
“We will be rolling it (the share investing service) out incrementally to our customers over the next few weeks. It will be an exciting new journey, but taking the first step feels great”
A differentiated share trading and investing service certainly sounds like a good idea.
And in an increasingly crowded, competitive and homogeneous brokerage landscape, we may yet see more firms try to stand out from the crowd in this way going forward.