Millennial investing
Godfrey added that the move is significant as it allows investors – many of whom are in the millennials age group of 18-34 – to buy a fraction of an investment and to be able to build up a diversified portfolio with just a couple of hundred pounds.
“With investors, they don’t care about passives or ETFs, they care about being able to invest with a couple of hundred pounds, that’s low cost, easy to understand and I can get my money back when I need it,” she said.
Advisers and fractional shares.
BlackRock’s Joe Parkin, who heads up the asset manager’s iShares UK wealth and retail sales division, said the new fractional shares dealing in ETFs will “move into the adviser market” on two fronts.
“The first area is the digital solutions in terms of who is running the money for advisers.
“This has involved an increase in the use of Discretionary Fund Managers, which are essentially multi-asset portfolio managers, should drive demand for ETFs.
“We’ve seen it recently with the gold rush. DFMs wanted to invest in gold using ETFs but they couldn’t as adviser platforms wouldn’t allow it,” he said.
