Online investing market stalls in 2018, in line with weaker Q4 markets, as the fintech challengers fail to ignite
Boring Money research reveals that fourth quarter falls in the stock markets wiped out early growth in the online investing sector in 2018.
14 February 2019; Analysis from BoringMoney.co.uk's Online Investing Report 2019 reveals that the total value of assets under administration (AUA) has grown just 0.5% over the past year, from £204.6bn at the end of 2017 to £205.5bn at the end of 2018.
The independent research and consumer insight consultancy reveals that although the combined impact of gradual customer growth and rising markets saw gains in the first 9 months of 2018, these gains were wiped out by falling markets in Q4. Assets fell by 8.1% between 1st October and 31st December 2018.
Average age of customers using online investment platforms has fallen over the past 5 years and is now 49. Other notable trends are the uptick in mobile trades to circa 15% of all trades where available.
The top three companies by AUA are:
- Hargreaves Lansdown remains the one to beat with a seemingly unassailable market share of 42% - which has been largely consistent for the past few years.
- Interactive Investor remains in 2nd place with 9% share, although including the AUA of Alliance Trust Savings gives a combined share of 13%.
- Fidelity holds the third spot with 7.9% share.
Robo advisers, which have positioned themselves as market-changing propositions, have failed to move the needle so far, with low average account sizes adding up to a combined market share of just 2%.
Boring Money CEO Holly Mackay comments,
If I had to look back at 2018 and call out any change which would radically alter the face of investing for the majority of Brits I would struggle. So far, I don’t think we’ve seen the winning formula and the market has plodded rather than soared, despite all the fintech hype. Leading with a product conversation rather than a more holistic planning or lifestyle conversation is not really solving the problem.
Mainstream high street bank brands have now launched robo advice which in theory should make a difference to numbers – but time will tell. Open banking, round-ups, free trades and digital advice look like the game changers which we’ll be tracking in 2019.
Boring Money’s Online Investing Report 2019 will be launched on 26th February, highlighting growth, customer trends and the new Best Buy list of online investment providers as voted by consumers and Boring Money.
Notes to Editors:
Boring Money’s Online Investing Report uses data gathered directly from 25 direct-to-consumer online investment providers. It also draws from a nationally representative YouGov survey of 6,544 UK adults, alongside qualitative focus groups and user testing. For more information, see: https://www.boringmoneybusiness.co.uk/research/research-reports-1/2019-online-investing-report.
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Cara Whitehouse, Boring Money
About Boring Money:
(www.boringmoney.co.uk) BoringMoney.co.uk is an independent research and content business which provides information, tips and Best Buys to consumers. The business conducts regular research with industry providers and consumers and looks at the developing DIY investment market from both the customer and provider perspective. Boring Money holds test accounts with 25 providers and also holds regular focus groups and interviews with consumers to ensure input and feedback from the user perspective. Founder Holly Mackay has worked in the investment industry for more than 20 years and is supported by a team of 15 researchers, analysts and marketing execs. Boring Money is not regulated to give personal financial advice, nor is it regulated by the industry watchdog.