Brokers beware: The UK's first ever no-commission share trading service launches today

Lucy White
Trading 212 free trading no commissions
Fintech firm Trading 212 aims to disrupt the market by cutting out the commission for brokers (Source: Getty)

For the first time in the UK's history, anyone wanting to dabble in shares can trade away without having to pay commission as Trading 212 launches its share trading platform today.

The fintech firm behind the project is hardly a new kid on the block – its online commodities and forex trading platform has been present in the UK for three years, in Europe for 14 years and has claimed the title of most downloaded trading app in the UK since 2016.

But the company's two founders, Ivan Ashminov and Borislav Nedialkov, have now focused their attention beyond commodities and forex to attempt a disruption of the equities market.

“The existing brokers are very comfortable with their commissions. Some of them are operating at a 50 per cent profit margin, so why change?” said Ashminov.

“It became clear to us that any disruption via technology would not come from the existing players. It takes a technology company, an outsider with a startup mindset and lean structure, to disrupt the industry.”

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This attitude is evident in Trading 212's online video advert, soon to be coming to a YouTube screen near you. It features rotund, middle aged “brokers” bathing in gold, before being pelted with the company's shiny silver “zero commission” coins.

But while this might sound disingenuous from some mouths (take BrewDog, which hastily removed the line “no pretentious investment bankers, no venture capitalist toads” from its website after partially selling out to private equity), Trading 212 appears to be walking the walk as well as talking the talk.

Both Ashminov and Nedialkov were just students when they established the business in 2003, working with their own money and no venture capital support.

“We could barely cover the costs to start with – more than once our electricity got cut off in the development phase. But we were a couple of crazy 22 to 23 year old guys and we didn't need much to be happy,” said Ashminov.

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The platform will initially offer investors access to UK, US and German stocks, and for free an investor can complete up to 10 trades per month of £10,000 each.

The company believes this will cover the needs of 90 per cent of its customers, and traders who want to go further will be charged an extra £1.95 plus 0.05 per cent per trade.

This is in contrast to the average commission charged by five of the largest UK online share dealing platforms per trade.

Trading 212's research indicates that the average commission per trade sought by Barclays, Hargreaves Lansdown, X-O.com, Selftrade and TD Direct equals out at £10.01.

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The platform also offers analysis tools such as moveable Fibonacci Circles, and a social media layer which allows users to chat and watch video tutorials.

But Ashminov and Nedialkov are not content to stop there. According to Ashminov, the app is looking to introduce artificial intelligence and machine learning elements within a year, to help analyse data and reduce human error in investing.

“Complex analysis isn't for everyone, and those techniques for applying patterns and correlations can be done on the background in the cloud. You get the end results,” he said.

“Of course it won't just be a black box which makes money for everyone, but it will help manage risk and mistakes that we as humans make.”

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