BUX launches fractional investing amid Americanization of neobrokerage in Europe

Rick Steves

BUX refers to the adoption of fractional investing and zero commission trading as the “continued Americanization of neobrokerage in Europe”.

Dutch brokerage firm BUX has launched fractional investing to clients across Europe, via investing app, BUX Zero. With this stunt, the firm has become the first broker in the Netherlands to offer fractional investing to retail clients.

Fractional investing lowers the barriers of entry as investors with smaller amounts can still gain exposure to high priced stocks such as Berkshire Hathaway Class A, which trades above $454,000.

A diversified investment portfolio with fractions of stocks

Starting as low as €10, BUX Zero clients can own a piece of some of the world’s most popular, but pricey, shares including Amazon, Google, and Tesla. Instead of buying a certain number of whole shares, investors can decide how much to invest in a stock.

BUX is following the democratization of trading trend and is making investing both accessible and affordable. The broker has previously launched zero commission trading, which is still something fresh in Europe.

Fractional shares is also a novelty in the old continent and BUX chose to be one of the first brokers in the region to offer such feature.

Yorick Naeff, Chief Executive Officer of BUX, said: “Today, we are making it even more affordable for Europeans to benefit from investing, not just the wealthy. With the launch of fractional investing, investors with smaller budgets, especially younger generations, can now build a diversified investment portfolio with fractions of stocks from some of the biggest names in global tech, retail and auto.”

BUX customers can invest in 100 of the most popular US stocks and more will be made available in the period after the launch. In the future, fractional investing in ETFs and European stocks will also be possible in the BUX Zero app.

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“Continued Americanization of neobrokerage in Europe”

BUX refers to the adoption of fractional investing and zero commission trading as the “continued Americanization of neobrokerage in Europe”. Indeed, the trend came from the United States, with Interactive Brokers likely being the first to add a commission free trading solution and DriveWealth being the industry pioneer behind fractional shares.

“The race to offer zero-commission investing in the American market was a harbinger of things to come in Europe. What has been referred to as the ‘Americanization’ of brokerage in Europe is in a second phase”, the Dutch broker explained, adding that fractional investing is standard in the U.S. and has been fueling a sharp rise in trades in the U.S.

As to DriveWealth, the largest provider of fractional investing solutions for brokers, the firm found that 92% of all trades on their platform had a fractional component in 2020.

DriveWealth’s Retail Trends report also points out that 82% of their survey respondents “believe a modern investment platform should offer fractional trading, equities investing, and ETFs to achieve long-term investing goals.’’

 

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