Would you consider dabbling in the stock market? By this I mean trading shares actively, but perhaps without the commitment of large amounts of money?
Many people still think share trading should be reserved for professionals, fund managers or the very wealthy. But consider: many active fund managers are eminently capable of losing you money and still charging you a fee for it.
What if share trading was made a bit cheaper, and you could literally dabble in the market with smaller amounts of money? Sound interesting? You may be among the 3-4 million British people who currently could afford to trade stocks much more easily if a simpler and more cost effective way of doing this was available.
The Dabbl share dealing app
This is the vision behind Dabbl, a newly launched share dealing app that has set out to serve the needs of the large number of UK residents who don’t make their own investment decisions and don’t trade actively. They are frequently discouraged by the higher fees, but Dabbl’s founders reckon that by offering smaller blocks of stock to investors they can also make trading much cheaper than the competition.
“We wanted to get away from the complexity and the jargon that is involved with share trading,” explains Mark Ackred, one of the co-founders of Dabbl. “Look at the world around you – robo advisers don’t solve many of the financial problems people face.”
In a world where pension funds are under-funded, where the state pension is being eroded by inflation, and where many active fund managers are under performing their benchmarks, Ackred raises a good issue.
New investors understand brands and the value of brands better than ever before, he argues. But sometimes they don’t understand who owns that brand. That is why Dabbl will also make it easier for people to buy the shares of the companies that lie behind the brands they like. Dabbl is introducing the concept of a company card: a method by which investors can identify companies by their brands, and potentially even take a photo of a brand symbol to find out who owns it, and what their share price looks like.
A cheaper way to trade shares
Dabbl is aiming to introduce a much more cost effective way to trade shares by aggregating trades into blocks. If you don’t need to trade immediately, and are happy for a trade to take place a bit later in the day, then by having it lumped into a bigger block of shares Dabbl transacts, you can benefit from cost savings.
Dabbl is offering a monthly fee of £2 per month (including your first three aggregated trades in that month) plus £1 per transaction. Alternatively you can pay £20 for the year and make three trades per month as part of that.
If you want your trade to take place immediately rather than wait for Dabbl to accumulate a block of customer orders, you can still do so for a higher fee. There is no intention to charge custody fees – the charge many brokers levy for just holding your share certificates for you in electronic format.
Ackred says the plan is to offer Dabbl trading on not just UK stocks, but also give investors access to European and US share markets. The Dabbl share dealing app may also be able to offer investors with participation in IPOs (initial public offerings) – this is when new companies list their shares on the market.
Partnership with BlackRock
But Dabbl will let you trade more than just shares. It is partnering with fund management giant BlackRock to allow investors to buy exchange traded funds (ETFs) on an incremental basis as well. ETFs are a great way to track a market index like the FTSE using a fund that charges very small fees and can be bought and sold easily, like a share.
“This is the logical progression for share trading,” says Ackred. “We are stripping everything right back. If you are not planning to turn up to a company’s AGM as a shareholder, you can still benefit economically from a smaller unit price.”
The share dealing app is not all going to be about the beginner. Ackred says Dabbl has plans for more experienced traders as well. Users will also be able to benefit from news and analysts reports on the companies they are interested in.
“Dabbl is going to be taking trading back to the basics,” says Ackred. “We knew we needed something that would appeal to people who had not traded shares before. For this we needed something that would combine simplicity with accessibility.”
To find out more about the Dabbl share dealing app, visit www.dabblinvest.com or check out their app on the iStore.