Investors across the world want ease and access to the best, most rewarding investments
without encountering too many obstacles. Except, for the UK investor, access to US markets
can come with a host of complications. Robinhood, an American trading and investment app,
sought to solve that.
In a bid to reduce obstacles to US investment, Robinhood opened a UK office in March of last year. As Jordan Sinclair, president, Robinhood UK said in a FinextraTV interview: "When we look to expand, what you need to do is to understand that local customer and what pain points that they’re still struggling with and that’s the way we looked at it. Things like 24/5
trading where we could bring the innovation from the US and deliver it in a local way and break down those time zone barriers for the UK investor."
The UK investor is an engaged one, too. Despite existing difficulties and financial risks of US investment, UK investors are increasingly engaged in the US markets.
"We see UK investors really engaging with things like earnings calls that kind of happen a little bit late in GMT hours and previously investors haven’t had access to invest in real-time markets."
It’s not just the issue of timing and a lag in nature between US and UK that makes accurate, real-time investing difficult. On top of these simpler obstacles are financial issues that make it difficult to invest at opportune times.
"We see customers quite consistently tell us either their existing platform charges really high fees or is commission free in inverted commas and charges high FX fees on accessing just basic names such as Apple, Nvidia, Amazon, that perhaps their friends are talking about that they may want to invest in."
Many investment decisions can come under advisory or via social influence, so to hear of stable, successful investments and not have the ease of access to follow through can create real frustration. While bridging that barrier to US investment is a positive evolution of an already successful service, it’s also true that there are differences in persona and in the needs of the UK investor. This is the central focus of the ‘local approach’ Sinclair mentions.
"What we’re very conscious of is that the UK investor is thoughtful about how their money is protected and also how cash is earning interest. So offering both a high interest rate on cash but also the protections to a level of 2.5 million dollars. Also, again, these are things that are helping the local customer.” Sinclair reiterates.
This local way of thinking drove the strategy for Robinhood’s UK launch and shows that it is possible to bridge cross-country obstacles with a grounded, customer-first approach. Along with the explanations about the process of learning, onboarding and gaining FCA approval, Sinclair goes into more detail in the full FinextraTV Interview.