New Platforms Target Younger Generations in Bid for Market Share
Wealth management platform Syfe has unveiled Syfe Trade, a new fractional trading product focused on US stocks, aiming to capture the attention of millennials and Generation Z investors. Fractional trading, which allows users to buy and sell portions of shares, has already been available internationally but presents a complex challenge, requiring careful management of forex and other logistical considerations.
“We could have launched earlier, but we chose to refine the technology and user experience first,” explained Dhruv Arora, Syfe’s founder and CEO.
Syfe’s entry into the market arrives just ahead of neobank Revolut, which announced its capital markets licence on December 6. As younger investors increasingly turn to the stock market, fractional trading makes owning small portions of high-value stocks like Amazon more accessible. “In the first six months, we aim to onboard over 100,000 users in Singapore,” added Arora.
Syfe’s offering will enable users to invest in fractional shares of any US stock or ETF from as little as US$1, a stark contrast to other brokerages that only permit full share transactions. While companies like ProsperUS by CGS-CIMB are considering fractional trading, many have not yet committed to offering it.
Competition in this sector is fierce. New entrants, including moomoo by Futu SG and Tiger Brokers, offer free shares or S$200 cash credits for new users. Syfe is also enticing new users with a S$200 cash credit upon funding their account with at least S$1,000. Additionally, Syfe is offering five commission-free trades to new users, with charges of US$0.99 per trade after the introductory period, which ends in Q1 2022.
In line with Revolut’s approach, Syfe will offer two commission-free trades for users indefinitely. Arora commented, “The brokerage industry has long been overdue for disruption, with high fees and inefficient processes. We are building on the success of our wealth management offering to enhance it even further.”
Syfe, traditionally known for its robo-advisor product, expanded its portfolio services in September to allow users to select their own ETFs. About half of the users opting for the new personalised portfolio feature have transitioned from Syfe Select, the company’s robo-advisor product, indicating a desire for more control over their investments.
Millennials and younger users are clearly the primary target demographic for these platforms. Although many platforms target users under 40, Syfe is focusing on individuals in their 20s to mid-40s. Interestingly, Arora noted that the most active users tend to be in their 30s and 40s, a demographic they are planning to target more heavily as they refine their offerings.
