Is there a list of ETFs you plan to offer available anywhere? Or will there be, before people have passed the in-app requirements for access to the invest part of the app?
Because I’d want to do any investing under an S&S ISA, and because you have competitors in the investment space (eg. Freetrade), I want to know up-front what you’ll offer so I can pick the right platform.
Any details on what your S&S ISA platform fee will be? Do you intend to compete with Freetrade?
For me, I’m hoping you do at least a S&P 500 tracker (ideally SPXP) and a NASDAQ 100 tracker (ideally CNX1).
Freetrade have fees for certain things: instant trade execution and ISA admin fee are two that come to mind. Using it fee free is only possible if you don’t want an ISA account and you don’t want instant trades.
Apologies for the delay in answering this detailed question - I just wanted to make sure I had an equally detailed answer.
Unfortunately I can’t list the specific ETFs at this stage, but we will be offering over 16 different investment strategies (which are mostly ETFs) across a variety of themes, including socially responsible or environmentally friendly investments, emerging markets like India and China or big trends like robotics and cyber security.
The full list of themes is provided below.
Our investment proposition is different from Freetrade as we want to help you grow your money over a long term with a straightforward investment process, a fair pricing model and the ability to see all your money across Spend, Save and Invest in one place.
For active traders and investors, platforms like Freetrade may be better suited.
Regarding fees and charges, the Dozens fee of 0.50%, which includes all costs associated with the daily maintenance of your strategy and includes VAT (where applicable) and the custody and dealing fees that our custodian charges, is very competitive and even for small investors one of the cheapest in the market. On top of that, you don’t pay the dozens fee if your investment is not making money for you. Lastly, you don’t pay any brokerage fees, commissions or other transaction costs.
Within the investment strategy, the fund managers charge ongoing fees which for our products are on the lower range of the spectrum with most of the fees ranging between 0.20% and 0.50% p.a., and some up to 0.80% p.a. These costs are to cover the costs of managing, buying and selling the assets within the funds embedded in the investment performance.
Thanks for the detailed reply, but I think you’re very wrong on this front, to the extent that investing with Dozens would be a non-starter for anyone. 0.5% is brutal. That’s not the cheapest, that’s actually the most expensive.
I’ve had a look at the overview you sent us and my (more expert) colleagues helped me put this together.
There are few players in the market who we find comparable in terms of services provided (they are percentage based platform providers, with ISA management services, offering thematic ETFs or funds) – they are AJ Bell, Fidelity, Selftrade, as well as Nutmeg and Wealthify (not included in your list).
As an example, let’s assume you had £1000 in an ISA, you invested it in a product and you decide to sell it after one year. We’ve compared products across the providers that have the same ongoing charges, so we can focus on the explicit management and dealing charges determined by the different players.
Let’s say, in that year your investment went up at a rate of 4% p.a.…
With dozens, the management fee would be around £5.00 for the year
Nutmeg and Wealthify would charge you a 0.75% p.a. and 0.70% p.a (ISA) management fee respectively which would amount to nearly £7.50/£7 for the year.
AJ Bell, Fidelity and Selftrade all charge you dealing costs of around £10.00 for when you buy and sell the investment. On top of that, the (ISA) management fees for these three providers range from 0.25% p.a. to an annual flat fee of £70.00. Therefore, the total fees for these players will range between £22.50 and £90 for the year.
And if say, your investment had gone down by 4%, the difference between dozens and the other providers would be even greater as dozens does not charge fees when your investment goes down. This is part of our commitment to only making money when our customers do.
Therefore I do genuinely believe our rates are some of the best on the market.
Thanks for the explanation, I see where you’re coming from now.
It seems your product is aimed at people with small amounts to invest who don’t really know anything about the stock market and want a simple choice to make. I can understand something like this being of value.
That said, I find the Nutmegs and Wealthifys of this world to be somewhat distasteful. From my perspective they are in the business of taking advantage of those with little money who don’t know any better by selling them easy to use but underperforming products that come with exorbitant fees that reduce those small gains even more.
I hope you intend to better serve these customers with a more ethical stance. Your no fees when down policy is interesting and does give hope, as does the lower fees in comparison to these particular competitors.
Given the education and safeguards being built in to your save → invest journey, I hope to see you also supporting those users who go from investing ~£1000 to £10,000+. I believe the ethical thing to do with someone who now has years of investing experience under you is to tell them there are better platforms out there for them (lower % or fixed fee ones that offer access to the “real” stock market), or to offer them a different investment product yourselves (switch them to a fixed fee, or even better just cap your 0.5% at something in line with the fixed fee competitors, such as ~£40).
Just to wade in on this - It sounds very much like you are clued up on investing, and know the best way to get the most out of your money.
However, many many people do not have the time/inclination to learn the stock market, but perhaps they would like to feel like they are doing something more with their money (which is where the likes of Nutmeg/Wealthify come in) - This is the customer that will be attracted to Dozens investing.
For what it’s worth, I’m a very uneducated person when it comes in investing - I have a Wealthify account, and I also have a FreeTrade account.
At the moment, despite it’s performance (), Wealthify still feels like it’s safer, because it’s not completely my responsibility.
Until I take the time to learn the stock market, and trust in my own decisions, that won’t change.
If Dozens ends up being cheaper than the other “robo advisors”, I’ll have no problem moving some of my savings over to that account.
But, it sounds like the Dozens options aren’t going to appeal to the experienced, clued up regular trader.
Freetrade have some good blog articles that cover the basics. But it’s ultimately remarkably simple: if you want to invest in the stock market, you just invest in the stock market!
(I am not your financial advisor, and yes, you would have to take the time to research and assure yourself that my suggestion here has merit, but what I mean by the above is: invest in an ETF that tracks an index that includes the top/all companies in the world, weighted by their value. For most people, it’s a relatively simple and straightforward choice to invest in just 1 ETF that tracks the S&P 500, or perhaps MSCI World. That’s it.)
Robo-advisors like Wealthify and other purveyors of actively managed funds (it sounds like Dozens will fit somewhere in here) may employ experienced financial experts with decades of investment expertise, and their knowledge and talents may lead them to believe they have the ability to beat the market.
But the reality is that most can’t, and over a long enough time line, it’s most likely that none can.
My view is that if you’re in the game to invest long term: don’t throw away your money paying people or platforms to mismanage your money. If you have a belief that gains in the stock market will outperform cash savings interest (it has in the past), then just invest in the whole stock market the cheapest way you’re able to. Freetrade will help there. I’m going to guess that Dozens will not.
The strange thing about Nutmeg, Wealthify, and Dozen’s strategy, is that they actually present more choices and overcomplicate things in their presentation of “easy”. I think you hit the nail on the head there, though, when you point out that it’s really about taking responsibility away from you.
What an ethical investment platform would do (and this seems to be Freetrade’s strategy), is provide you with sufficient education that you become comfortable with taking on the responsibility yourself.
Apologies for coming late to this conversation and being in danger of making you repeat yourself.
ut when you say “investment themes” are you refering to the theme of a singular ETF or are Dozens buying several ETFs on my behalf and calling that “package” an “investment strategy”?
Does that make any sense? So, when you say “Gold” do you mean I have the ability to purchase SGLN and call that theme “Gold”. Or will Dozens be purchasing a combination of say, BULL, SGLN, PHAU etc. in various underlying quantities and calling that a “Gold” theme?
I guess the question is : Are you a Nutmeg type “package” or are you offering singular ETFs like Freetrade?
Apologies for confusing anyone. I think I’m confusing myself!
Have just taken a look at the list of ‘themes’ available in the Invest section.
Its surprising to me that there is no global/whole-market theme (track whole market with something like iShares MSCI World or Vangard FTSE Whole World).
Given the advice I usually see for novice investors is to buy a widely diversified global fund rather than pick and choose individual niches, it would be interesting to know the rationale behind the omission of a global whole market theme.
I personally wouldn’t use the Invest section without a global/whole-market option to act as a core investment.
I’d say it was good advice for any wise long term investor. No one knows how different markets are going to perform in the future. It’s better to buy them all.
Anyway, my take on this offering is that if you’re someone who has been given good advice, you don’t need a “robo”-like service taking 0.5% to give you worse “advice”. Take your free better advice and invest elsewhere for less.
What is it that you would like to see? Do you mean just a full list of all ETFs?
We will certainly expand the list of ETFs in due course. We did a lot of careful research before selecting the list we will launch with, and the focus now is on getting the flow working correctly and make sure that all customers have the information they need to make their choices.
Once that work is complete, and we’ve had your feedback, we can certainly look to add more varied options and at different risk levels to suit a range of customers.
Anything that encourages younger consumers to put money aside for their future is a good thing - but they also have to address how those same target customers are going to find ways to save money in order to do that.