Public.com has announced it is shuttering its UK business, yet it was just seven months ago that I wrote about the launch of the broker, in the UK.
The share trading app, which is backed by a host of celebrity investors, offers its US members, access to both traditional and alternative asset classes, and it wanted to replicate its success stateside in the UK market.
Public.com had previously raised $300.0 million from VC funds and kicked off its UK business with a US share trading operation, through which, clients would be able to deal commission-free in any of 5000 stocks and ETFs.
- Related Interview: Leif Abraham, Public.com’s co-founder & co-CEO on why they are launching in the UK
Share trading through Public was only available via the broker’s app, which offered a range of tools with which to screen the markets and find trading or investment opportunities. There was also a premium account that could be accessed for £8.00 per month.
Why did Public decide to close its UK business?
The firm sent a brief email to UK account holders informing them that it was was suspending its UK operations. and that from Feb 26th it would be restricting new deposits and that accounts would be closing on March 25th.
However, it did not explain why the firm was shuttering in the UK after just 7 months. A spokesperson for Public.com told us:
Public will no longer be available to UK customers after May 2024. All UK accounts will be closed after April 2024.
With even more accelerated growth in the US, especially from recent feature launches such as a 5% high-yield account, corporate bonds and options trading, we decided it’s better to focus on US business for now.
Reading between the lines it seems likely that the firm failed to attract UK clients in an increasingly competitive market.
The trading app was functional at best and launching in the UK with just one product meant that the broker didn’t have a USP or unique selling point, in a market populated by multi-asset brokerages.
That combination would have made it almost impossible for Public.com to differentiate itself from the competition in a positive way.
That said we haven’t noticed any significant marketing campaigns since the July launch.
So, one is forced to ask if UK investors, who hadn’t read the Good Money Guide, even knew that the broker was open for business here.
What does the closure of Public mean for Robinhood UK?
The closure of Public’s UK operations leaves a question mark hanging over the future of its US rival Robinhood, which launched in the UK for the second time, back in late November. And was intending to be up and running in early 2024.
Robinhood will open with an even narrower offering than Public, with commission-free trading on just 150 US shares.
However, the promise of +5.0% interest on free cash balances could prove more enticing.
Whether it will be sufficient to create the critical mass the broker is looking for, remains to be seen.
Separated by more than the Atlantic
The truth is the regulatory and competitive landscape for retail trading in the UK are very different from those in the US.
For example, retail options trading is widespread in the US, whilst in the UK it’s a niche activity from which the regulator effectively screens out the majority of private investors.
Furthermore, OTC margin trading by private investors is largely prohibited in the US, whilst trading in CFDs and or financial spread betting in the UK has a long history and is very popular with private clients.
George Bernard Shaw called the UK and the US “two countries separated by a common language” though in the world of trading, it seems that that separation is down to cultural differences.
With over 35 years of finance experience, Darren is a highly respected and knowledgeable industry expert. With an extensive career covering trading, sales, analytics and research, he has a vast knowledge covering every aspect of the financial markets.
During his career, Darren has acted for and advised major hedge funds and investment banks such as GLG, Thames River, Ruby Capital and CQS, Dresdner Kleinwort and HSBC.
In addition to the financial analysis and commentary he provides as an editor at GoodMoneyGuide.com, his work has been featured in publications including Fool.co.uk.
As well as extensive experience of writing financial commentary, he previously worked as a Market Research & Client Relationships Manager at Admiral Markets UK Ltd, before providing expert insights as a market analyst at Pepperstone.
Darren is an expert in areas like currency, CFDs, equities and derivatives and has authored over 260 guides on GoodMoneyGuide.com.
He has an aptitude for explaining trading concepts in a way that newcomers can understand, such as this guide to day trading Forex at Pepperstone.com
Darren has done interviews and analysis for companies like Queso, including an interview on technical trading levels.
A well known authority in the industry, he has provided interviews on Bloomberg (UK), CNBC (UK) Reuters (UK), Tiptv (UK), BNN (Canada) and Asharq Bloomberg Arabia.
