Winterflood launches fractional ETF share dealing service

Winterflood Business Services (WBS), has launched its fractional share dealing service, designed to trade and hold ETFs to four decimal places.
The firm writes that this service enables online investment services, robo-advisers, platforms, discretionary fund managers and financial advisers to fully invest into ETFs and ensure these instruments can be used effectively through model portfolios of all sizes.

“Fractional dealing is crucial in enabling smaller investors access to the market, with innovative online investment propositions and robo-advisers set to be key beneficiaries given the demand for digital, jargon-free and cost-effective investing. The proposition also offers broad access to the ETF universe – covering a wide range of markets, indices and alternative strategies,” the firm writes.

WBS has seen its first client, Moola – the online investment manager – go live with the service making the online investment platform one of the first in the UK to offer trading and custody of ETFs on a fractional share basis. WBS also expects Parmenion, Novia and Wealthify to commence with the service in due course.

Alex Kerry, head of Winterflood Business Services, says: “Fractional share dealing is a revolutionary development in our industry and we are delighted to have officially fully launched this service with Moola.

“We believe fractional share dealing will help more platforms to build a wider investable universe for micro investors and encourage saving and investment. Together with our aggregation engine, fractionals also opens up access to a wider investment universe for more discretionary fund managers and financial advisers who will now be able to fully invest their clients’ money.”

Kerry also believes greater adoption will be a watershed moment for the industry. “Fractional trading will be a powerful catalyst in addressing the growing intergenerational wealth inequality by unlocking the power of investing a small amount often and early,” says Kerry. 
“Through our automation and aggregation services, we have successfully been able to reduce fees and improve access for the end investor through our partnerships with the likes of Moola. The provision of fractional share dealing is removing a major barrier in our industry and we truly believe this to be a watershed moment,” he adds.

Gemma Godfrey, founder of Moola, comments: “Moola works in collaboration with the industry and world class partners such as Winterflood Business Services, in order to give customers a solution built around their needs and help advisers capture a market that has proved a challenge to satisfy traditionally.
“The ability to buy a fraction of an investment means an entire portfolio can be constructed with a far lower amount of money. For the mass-affluent market in the UK, equating to GBP2 trillion of untapped capital, this provides a more manageable entry point to start their investing journey and a service for advisers to satisfy smaller investment needs.

“Partnering with Moola, advisers can incubate a future client bank, satisfy smaller investment needs and retain assets between generations. Winterflood’s cutting edge technology is driving this seismic shift and together we hope to shape financial services for the better.”
Joe Parkin, Head of iShares UK Retail & Wealth Sales at BlackRock, comments: “The ability to invest any amount of money easily and cost-effectively provides: choice, for investors, who can invest more of their money in a cost effective way to pursue their financial goals; accessibility, for advisers and discretionary fund managers who have been seeking more efficient access to ETFs as portfolio building blocks; and competitive advantage, possessed by investment platforms that can offer the granular exposures that ETFs provide.
“The technological infrastructure behind many UK platforms, that suited the old model of fund sales, is often not fit for purpose when it comes to newer investment tools like ETFs. Fractional dealing technology directly addresses an operational hurdle that has historically been a hindrance for small investors as well as their advisers and investment managers. This is a truly exciting development.”

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