Trading 212 has become the first retail UK broker to offer commission-free trading for new and existing customers across shares and ETFs on its platform with no limit on the frequency and value of trades. People can open an account with as little as £100.
The same zero commission offer is being made available through Trading 212’s newly launched stocks and shares ISA, which offers investors access to thousands of ISA eligible stocks across the world’s leading exchanges as well as ETFs.
Trading 212 has decided to remove all commission following the successful launch last year of a zero commission share trading service, which enabled investors to make 10 trades per month at no cost. The platform has become the UK’s highest rated financial trading app and has been downloaded over 12 million times across Apple’s Appstore and via Google Play.
With the average commission1 charged by five of the largest online share-dealing platforms running at £8.31 per trade and leading brokers such as Hargreaves Lansdown and Interactive Investor charging £11.95 and £10 respectively, and levying additional fees for ISA wrappers Trading 212’s new unlimited offer is set to further disrupt a market that sees retail investors’ returns decimated by high transaction costs (see note to editors for typical illustration).
In addition to shares and ETFs, Trading 212 has also removed all commission from trading cryptocurrencies and Contracts for Difference (CFDs).
According to Trading 212, the recent boom in trading volatile cryptos such as bitcoin has been particularly popular among millennials but by making saving and investing in shares and ETFs free or charge and removing the hassle, Trading 212 wants to encourage more of this generation to diversify into this less volatile asset class.
Its research2 shows that over the last 12 months millennials have carried nearly a fifth (18%) more crypto trades than older generations. In the next year, 13% more millennials plan to put more money into shares than older investors.
The zero-commission initiative comes at a time when investors are showing a growing appetite for change: its research1 reveals that the majority (59%) of UK based equity traders are considering switching to a new trading platform over the next 12 months, with 28% of them claiming it’s because they want to reduce the cost of their trading. The percentage of crypto currency and CFD traders considering switching platforms is 78% and 82%, respectively.
Ivan Ashminov, Co-Founder of Trading 212, said: “Being the first company to offer UK investors a commission-free trading environment speaks to our long-held belief that this charging practice can no longer be justified. It will add further pressure on the established players who have been allowed to fleece investors for too long. Our cutting-edge technology means that the actual cost of executing a retail trade is negligible but the impact of commission and platform charges on the customers’ returns can be huge.
“Crypto trading has attracted a new generation of young people who don’t see the need to pay for basic services such as trade execution. They’re also looking to broaden their exposure away from cryptos towards shares and ETFs and removing commission will only increase their appetite.
“In contrast to other fintech companies who are focusing on the highly volatile crypto market, we want to democratize the ownership of shares and ETFs, so investors can enjoy their long-term benefits. It’s only a matter of time before the established players will have to get rid of commission altogether.”
David Black, an independent retail investment analyst, commented: “The trading platform market has never been more exciting in terms of innovation and service. More providers are coming into the market and are constantly pushing back the boundaries, and Trading 212’s announcement today is the strongest example yet of what to expect.”
The Trading 212 app is underpinned by proprietary market-leading technology, which enables customers to enjoy a fast and frictionless investing experience. It offers free access to advanced features such as technical analysis and various integrated social media features, such as video tutorials and a live chat room, to encourage greater engagement and education around trading in shares.
Trading 212 customers are provided with full regulatory protection as Trading 212 UK Limited, , is authorised and regulated by the Financial Conduct Authority.