App Investing: Can It Really Be Inclusive?

For many people, the Covid-19 pandemic induced significant feelings of uncertainty around job and financial security. According to research conducted by precious metals investment platform, Minted, this, combined with the ever-increasing cost of living, has encouraged 35% of people in the UK to consider starting to invest and save.

Where should the everyday investor start?

One option that is growing in popularity is app investing. With an estimated 3.2 million users across the UK’s top 10 investment apps, it is evident that the number of people looking to invest for their future is only growing. However, still being new territory for many, exactly how accessible are investment apps for beginners? 

What are the risks and what should new investors know before committing their hard-earned money?

Historically, investing has been associated as something for the wealthy, with many believing it requires detailed knowledge about stocks and other investments such as cryptocurrency or precious metals. In fact, the research showed that 50% of people are being put off investing due to a lack of knowledge and confidence. But app investing is challenging that stereotype, with the hope of encouraging more to try it out.

With minimal fees involved and the option to invest small amounts at a time, fintech apps are making investing a viable option for all. Using a well-designed platform, everyday investors can begin to grow their wealth from the touch of a smartphone. In-app discussion creates a sense of community, by allowing fellow users to share their insights, experiences, and opinions with one another, giving beginners vital knowledge about the fundamentals of investing. 

To encourage users to view app investing as a feasible option, many apps are also offering free trials, giving investors the chance to experiment with practice accounts. In addition to providing an insight into how the platforms work, this can offer users a low-risk opportunity to build their confidence by learning how to manage a portfolio and make trades, before involving real money. 

While app investing offers a number of benefits, users must ensure proper research is carried out. An understanding of the service is paramount in mitigating risks. Before involving money, users should look at the credibility of the app they are interested in and other important information such as its founder credentials and app regulations, as well as past reviews, both from users and the industry. This can help provide a clear picture of the positives and negatives of each app, allowing the user to make an informed decision about which platform can best support their financial goals.  

In addition to background information, users should also be aware of any fees and the service included within this price. Being knowledgeable around this is crucial, particularly for beginners investing smaller sums, where fees may eat into any returns. New users should begin by looking at the terms and conditions of the app to understand what they are signing up for. For example, delays between requesting cash and it being received can often be overlooked, which can affect overall return, so users need to know where they stand. 

When starting to invest, people should look to spread their money in multiple smaller amounts rather than one large sum, to help spread the risk. Looking at personal finances and only investing what is affordable is critical to managing money effectively and avoiding any financial difficulties down the line. Individuals must be disciplined and rational; markets can go up and down, so it’s important to avoid reacting quickly to market volatility.

With more people beginning to download and use investment apps, what does the future look like for fintech?

One thing is for certain, it’s showing no signs of stopping. AI is already being used for trading bots, meaning users can expect to see the role of AI increase and diversify across platforms in the future. In addition, apps that round up total spends and invest the difference when online shopping continue to emerge in the market, allowing people to make savings that adapt with their spending habits.

While the future of app investment looks to be a prosperous one, with more users comes tighter regulation. More stringent checks during onboarding are to be expected, to assess individuals’ affordability and investment competence, preventing financial fallout. App investing is an innovative solution that enables users to continue to find new and adventurous ways to manage their money and explore everything from stocks and shares and cryptocurrency, right through to precious metals such as silver and gold.

About the author: Hamzah Almasyabi is  CEO at MintedTM, an investment platform that allows individuals to buy and sell precious metals.

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