Brokerage group Trading 212 has hit £25bn in assets under administration (AUA), according to the company’s Co-Founder Ivan Ashminov.
Speaking to UK outlet This is Money, the brokerage executive, who rarely speaks to the press, confirmed that the investment platform the company offers has surpassed that £25bn mark.
It’s an impressive milestone for the firm, which became the first broker to launch cash equities as a commission-free product in the UK back in 2017.
As reported on TradeInformer last week, the broker’s latest financials for its UK entity show that it is now the second-largest CFD provider in the country, behind IG Group.
Can Trading 212 sustain its growth and become a mainstay UK investment platform?
To put the AUA figure in some context, the year before Trading 212 launched, rival investment platform AJ Bell reported that it had £23.3bn of client AUA.
AJ Bell was founded in 1995. In other words, it has taken Trading 212 approximately 8 years to reach a higher level of AUA than AJ Bell managed to achieve in over two decades of business.
One of the differences is that traditional stockbroking platforms in the UK have not offered CFDs before.
There is thus a key difference in how these firms make money. Trading 212 is effectively relying on clients to cross over into CFDs, where they will make the overwhelming majority of their revenue.
In contrast, platforms like AJ Bell have to charge dealing and account fees to generate revenues.
The interesting question is both how sustainable this model is and whether it will mean ‘serious’ money is happy to move over to Trading 212’s platform.
If you look at the reported client figures for Trading 212, they say they have 4.5m clients on their platform. This would mean the average account size is under £6,000. In contrast, AJ Bell clients average around £173,000.
