Good mobile apps have become an important way for asset managers and brokers to provide a positive experience for investors. Most online investment services offer this, and their features are much more comprehensive than they were a few years ago.
However, there are significant differences between these apps. While some investment platforms only offer the basics, others are starting to offer new types of engagement that are, dare I say it, exciting.
Vanguard held off on launching its app for UK investors for a long time, finally announcing the service two months ago. Investors were crying out for this. Nearly a third of Vanguard’s UK customer base, around 200,000 people, downloaded the app within two months.
Why were you late? Liz Waldron, Head of UK Retail Investor Client Experience at Vanguard, said: “We wanted to do things the right way, so our approach was considered and we ran a thorough and comprehensive testing phase, taking the time to ensure all inputs were correct. “spent” was reflected. ”
Nevertheless, by sticking to basic account summary information, Vanguard’s app offers widespread account opening and trading functionality via the handset, compared to rival platforms that also have account monitoring and management features. It lags far behind the apps it offers.
Jeremy Fawcett, director of research and analysis firm Platform Forum, said: “The likes of Hargreaves Lansdown, Interactive Investor and Fidelity have launched numerous releases into the current app generation, and clients benefit from a wide range of services including: [for] Self-invested personal pension (Ships). ”
Hargreaves Lansdown, the largest platform with approximately 1.9 million customers, reported that only 0.6 percent of its customers used the app in 2014.
However, by 2021, 44% were using apps after the pandemic led locked-down consumers to turn to trading as a new hobby. In contrast, transactions via websites plummeted from 95% in 2014 to 54.8% in 2014. 2019.
So, if you are an investor and have never used an app or traded, are you a dinosaur?
Maybe you’re just too old and too rich. Holly McKay, founder of financial website Boring Money, said: “The two main factors determining the importance of an app are wealth and age, and of course there is a positive correlation between these.” I am.
Research from Boring Money found that investors with assets under £100,000 primarily use apps, while those with over £100,000 prefer websites and desktops. For those under 45, apps are an important factor in platform selection, but for those over 55, apps are of little importance.
Analysts are still not convinced that apps can be all things to all investors.
Mr Fawcett said: “A true mobile-first philosophy has attracted a new class of first-time investors to neo-brokers like Trading 212 and Freetrade during the pandemic. Some of you may have realized that a sophisticated user experience is not the only factor in successful financial savings and investing.
It’s safe to say that reliability is a key drawback of the app. Online trading platform Investingoal.com examined customer reviews of 30 popular investment apps and found negative comments such as “glitches,” “freezes,” “crash,” “doesn’t work,” “slow” and “lag.” It was found that a considerable number of keywords were included. . In an environment where trust and seamless access to financial markets is important, repeated issues of this nature can seriously erode user confidence.
No wonder most of the major services maintain app review scores of 4 or higher. However, reviews of the app show that people in the final stages of sophisticated investing still claim that it lacks functionality.
ShareSoc, which represents UK investors, said key elements were still missing from the app, such as the sum of all investments in shares across trades, Isus and Shipps. or the ability to access your spouse’s investments, subject to your spouse’s permission, if held on another platform.
The most innovation is on the content side, with investment tips, ideas, and videos gaining traction. Moneybox stands out for its “Academy”, which has created a series of educational resources on money management (we do not provide formal individual advice).
Social trading, a form of investment that allows individual investors to share information, is currently becoming mainstream. EToro pioneered this innovative way of trading and investing, combining financial markets and social features. And this week, Interactive Investor released a free mobile social trading app to its 400,000 customers.
The ii Community advises users to use pseudonyms and avoid portraits, while chatting with like-minded investors in groups such as Roast a Portfolio and Track the FTSE 100 can. They can see all the investments held by top-performing investors and benchmark their portfolio performance against other investors.
This is an interesting development if you’re curious about how other investors are investing their money. As the saying goes, information is power. But social trading can keep you hooked for hours. We condemn teenagers who are “doom scrolling” on TikTok. Now you can also make “fateful investments” that waste your time.
I’ve always thought investing should be like watching paint dry. So, even if an app can do more than that, is it still wise to trade from the palm of your hand? There’s an inevitable risk of overacting what you see.
Cliff Waite, member of ShareSoc’s policy committee, says: Similarities to gambling (betting or virtual currency) apps send the wrong message. ”
When it comes to investing, our actions are one of only three things we can control. The rest is asset allocation and fees paid. Asset managers have warned of the risk that short-term investor sentiment and the “gamification of investing”, which promotes different investment themes, could lead to portfolios without meaningful strategies.
Interactive Investor’s “Community” app rates portfolios up to 5 stars. However, this is based solely on performance, rather than structure or asset allocation, which can give investors a false sense of security.
Waite says he never uses the app to do serious, detailed analytical research before buying or selling stocks. “Mobile phone screens aren’t big enough to display 10 years’ worth of financial data. You need a desktop PC with a large screen to see all the data you need to see,” he says. .
So treat the time you spend with investment apps as a fun hobby and don’t make the mistake of turning your “interaction” with them into a flurry of uneducated trading. Just as we limit screen time for our children, investors would be wise to do the same with their apps.
Moira O’Neill is a freelance money and investment writer. Email: moira.o’neill@ft.com,X: @MoiraONeillInstagram @MoiraOnMoney
