Martin Sokk (left) & Mihkel Aamer/Lightyear.
Exclusive: Lightyear launches 100 UK stocks and ETFs
AltFi spoke to Lightyear’s co-founder and CEO Martin Sokk about levelling the playing field for European investors and adding a load of new investment opportunities to its universe of more than 3000 stocks and ETFs.
A whole new range of investment opportunities have landed on the platform, from AstraZeneca to Burberry, and from Tesco to Wise — where co-founders Martin Sokk and Mihkel Aamer were early employees.
With its European customers at the centre, the investment platform is also rejigging its pricing in line with the launch of the new stocks in an effort to remain simple, fair and transparent.
Investing in ETFs remains free, with investment options across GBP, USD and EUR with no foreign exchange fees.
“The main way we think about how customers should pay for services is that we’ve been trying to challenge the price as much as possible,” Sokk told AltFi.
“When you go to the US, it’s crazy cheap but when you come to Europeans on their own turf, they’re in a pretty bad situation because the actual infrastructure costs a lot of money.
“So we had to effectively make a decision: do we want to have really limited service and offer only a few countries with some instruments or are we going to go the other way around and offer everything that customers really, really want?”
Clearly going with the latter option, Lightyear has set itself on a mission to make investing more equitable for customers in Europe.
From launching just a handful of US single stocks for UK customers in 2021, Lightyear now has stocks and ETFs from six different markets for customers across 21 different countries — with more to come very soon so keep your eyes peeled for that — and the addition of UK stocks and ETFs adds to recent launches in both Germany and the Netherlands.
“I think we are now getting a really good pace and place to actually cover most of Europe and we are adding new markets one by one and that gets quite a bit easier for us,” Sokk said.
As the platform grows, so too have the platform’s customers, with increasingly more experienced investors joining Lightyear alongside investing newbies, and increasingly more customers looking to ETFs as a big investment option.
“Europeans are investing in the local market and the US market. The people who are serious about investing are people who want to be associated with wealth creation over long periods of time, it's not enough for them only to have US stocks,” Sokk said.
“As we were adding more and more elements, we were getting into this normal setup, and there was this bulk of investors who maybe hadn’t considered new brokers before, because the [new companies] just haven't had the ability to look at local investments, they haven't had the ability to have good information on the various different access to the various different markets and the product was not there.
“So we’d been building towards that, but now the product is actually getting into the place where it really works for these people. And we can see that from our customer behaviour.”
Having started with a customer base that was 30 per cent new investors, more and more experienced investors are joining the platform as its offerings grow.
Lightyear now offers interest on invested funds, currently at 4 per cent for USE and 3.5 per cent for GBP, and only charges for shares, currency conversion and a fast deposit transfer.
Given the more democratised nature of the US markets, the execution fee for US stocks will be 0.10 per cent with a $1 cap, compared to a flat fee of £1 for UK stocks and €1 for EU stocks to tackle the more fragmented and expensive markets.
Unfortunately, Sokk explained, investors are often treated unfairly in the UK and Europe when investing in foreign stocks and ETFs, giving the example of a British investor having to change pounds to dollars to invest in Apple stock, to then have to transfer it back to pounds, resulting in a double conversion every time they choose to buy or sell.
“If you don't localise the service for Europeans, you will have this kind of mediocre, expensive and badly understood service for home turf people,” he continued.
“So this is something we're really mindful of — how do we build a product that will work in European markets? And people won’t have this kind of short stick that we're getting right now from the American-focused brokers.”
Having raised $25m last July and on a rapid growth trajectory with new stocks, locations and features, Lightyear is clearly full speed ahead on its mission to level the playing field for European investors.