I totally agree. I think this will be absolutely key for a solid proportion of Monzo’s users. I asked Tom at one of the open office events about their investment proposition, and he mentioned specifically going down the ETF route. Whether it’s a basket of ETFs that track indexes or otherwise, we don’t know, but it seems clear that this has been on their horizon for quite sometime. They also hold the relevant regulatory permission to offer a capital at risk investment product. If they do offer an investment product under the Monzo brand, I very much doubt HL will play a role. I’d expect them to either interface directly with Vanguard, who offer super affordable direct retail investor access to their ETF products, or use Winterflood to carry out a back office broker function. I think i’d be a little concerned if I was MoneyBox when you consider Monzo’s roundup feature…
I think it’s the lack of dealing costs and admin and custody fees that really makes them special. Fractional dealing is some way off… a bird in the hand and all that!
It’s a question of scale. The sum doesn’t have to be significant if there are enough users. Finding the sweet spot will come down to weighing up the different CACs; organic growth vs. leveraging Monzo or Starling’s userbase, and paying a commission to acquire each user. If the latter makes better commercial sense, then the next hurdle is negotiating an equitable agreement. And of course there needs to be the will engage on this basis in the first place.
My own view is that it would be real shame for Freetrade to not attempt to seek a deep integration with Monzo. First mover marketplace advantage! But what does it look like? Real time portfolio valuation with Monzo? Free cash to invest pot?
I suspect the biggest impediment, aside from understanding what it actually is that’s integrated, is the lack of Alpha (Freetrade’s paid product), lack of Android, and possibly the so far limited universe. Developers, Freetrade needs your help!