Investments  

Will micro-investing be the Millennials' way into long-term investing?

Helen Oxley

Helen Oxley

For example, Strava, the fitness network, encourages positive behavioural patterns around exercising. These new saving interfaces are essentially the fitness trainers of the investment world, encouraging clients to exercise their saving muscles. 

And while these companies offer jargon-free, simplified advice, under the bonnet they offer sophisticated solutions in terms of investment strategy and risk management.

For example, Moo.la taps into the investment expertise of BlackRock, whose iShares business has been working for several years to widen the choice of asset classes available to investors through low-cost ETFs. 

With all of this in mind, why hasn’t the world of micro investment caught fire? One of the main barriers to the growth of these platforms has been the thorny issue of fractional shares. However, we believe these small slices of securities are about to make big waves in the investment world. 

A fractional share is simply a share of equity that is less than one full share. Previously, micro investors could not buy a stock like BP or an ETF fund if the unit price was over the cost of the regular contribution, leaving a diminished investment universe and inefficient portfolio rebalancing. 

Fortunately, along with firms like BlackRock, we are assisting the new wave of platforms to add fractional share dealing services allowing micro investors to invest into securities with as little as one penny, rather than a whole share, across a range of asset classes. 

Ultimately, we believe fractional share dealing services will help more platforms to build wider investable universes for micro investors and encourage saving.

It will also help address the growing intergenerational wealth inequality by unlocking the power of investing a little often and early. 

Helen Oxley is head of business development at Winterflood Business Services