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2021 Retail Investment Application Benchmark
A study on the market for retail investment applications in Belgium and the Netherlands. Which application is best for passive investors and which one for active investors?
Context & Scope of the first Sia Partners’ retail investment application Benchmark
An increase in the number of investment applications over the past years has made online investing more relevant than ever before. The number of online traders has increased massively in the past years and is only predicted to increase even further. This increase in popularity is partially caused by low interest rates and digitization of the financial services industry. The current application offering is expanding, applications are becoming more and more advanced and provide an easy and user-friendly way for retail investors to trade on financial markets. Remarkably, many of the new users are younger and, in many cases also beginning investors, showing the long-term potential of this market.
The first edition of the Investment application benchmark compares 10 different retail investment applications that are available to Belgian and/or Dutch investors. The number of applications is expected to increase annually as more applications will become competitive, and the benchmark will expand internationally in the coming months.
The applications have been assessed on 5 key streams:
- Functionalities
- User Experience
- Product offering
- Costs & Fees
- App store rating
The rating covers 80+ criteria. The importance of the different streams in the calculation of the rating is based on the investor profiles and their identified weights.
How investor heterogeneity is considered
As there are different kinds of investors, we considered their trading frequency and experience in the application rating. Therefore, we launched a market study where we asked retail investors on their preferences and trading habits. This helped us to identify which of the four streams - excluding app store rating which is fixed - are more valuable for certain investor types. In total we identified six investor types with each their own, unique, empirically determined weights.
The 2021 rankings and results
Active investors (average beginner, intermediate and advanced investor experience level)
Amongst other things, we can conclude that the low cost-applications (Bux zero and Degiro) are in the top three due to an active investor’s preference on the cost & fees stream. Although Bux zero has lower costs, Degiro sits on the first spot thanks to more advanced functionalities for portfolio management and the wider range of products.
Mexem takes the number two spot because of its relatively low costs combined with an overall advanced application and a wide range of products tradeable. The three applications have a very similar rating but offer very different investing experiences to their users.
Passive investors (average beginner, intermediate and advanced investor experience level)
Passive investors attach equal value to all four streams. Since the top three applications with the highest overall score are Mexem, Bolero and eToro, it explains why these applications are at the top of the passive investors’ rankings. These applications offer very different experiences to their customers. Mexem focuses on functionalities and products where eToro scores better on costs & fees and user experience. Bolero, the investment application of KBC, manages to take the number 2 spot due to strong user experience and functionalities.
