How the Barefoot Investor saw trading app Superhero shed its Robinhood image
Speaking at the Intersekt conference, Superhero CEO Wayne Baskin says the company is firmly focused on long-term investing rather than day trading.
Australian trading platform Superhero was dubbed the Robinhood of the ASX when it first launched in September last year, thanks to its low fees and easy-to-use platform.
Eight months on and the makers of the app are shedding that image in favour of a new message. Now they're focused on more mature customers (older millennials) who are investing for the long-term.
The change comes ahead of the launch of the company's superannuation product that will allow customers to build their own portfolios of stocks and ETFs.
Speaking at the Intersekt fintech conference in Melbourne last week, Wayne Baskin, Superhero co-founder and CTO of Booktopia, said a conversation with The Barefoot Investor Scott Pape helped to shift his and co-founder John Winters' perspective.
"We took some feedback from Scott Pape, who said to us 'how are you promoting long-term investing?' And we looked at each other and said, 'let's make it free to buy ETFs'."
Superhero removed brokerage fees on all ASX-listed exchange-traded fund (ETF) purchases in October last year, making it the first and only broker in Australia to do so indefinitely. It's still $5 to sell ETFs, a strategy Baskin says they have in place to dissuade day-trading.
"If you made it free on both sides you would have people day-trading ETFs, which would make it very dangerous," said Baskin.
Pape has loudly hit out against the gamification of stock trading by apps like Robinhood, who offer zero brokerage trading alongside leveraged stock options.
The dangers of day trading came under the spotlight as thousands of new investors a day opened trading accounts during the pandemic. Many of these subsequently lost money, and some with devastating results.
From Robinhood to super fund
Superhero's decision to focus on long-term investing rather than active trading was not immediate.
"At the beginning, John said, 'Wayne, I want confetti when someone places a trade'," admitted Baskin, referring to his co-founder John Winters.
"[but] you can't gameify this... we've all seen the news lately."
Despite its millennial-friendly design, the platform is relatively conservative. Unlike Robinhood, it doesn't offer leveraged trading such as options or CFDs. It also doesn't have many of the technical features you see on apps favoured by active traders, such as technical analysis tools or a long list of conditional buy and sell orders.
Instead it offers the lowest fees currently available, according to Finder data, for Australian stocks and ETFs. And it covers the essentials, such as tax reporting, watchlist alerts and instant funding.
It also lets you invest from $100 into ASX stocks, rather than the standard $500 amount.
"It’s having that hat on to say, 'We’re not in the e-commerce world, I'm not building a game here, I'm building a finance product.' But I still want to make it easy," said Baskin.
"The biggest hurdle Superhero faced from a technical and compliance viewpoint was keeping our user experience simple and understandable, and integrating that into our platform using – sometimes – older legacy systems," Baskin told Finder.
Baskin says they're using those lessons to better develop their upcoming super product, due to launch in 2021.
"Super generally tends to be something most customers tend to set and forget because, as a product, it's complex so people tend to tune out. The challenge we've set ourselves is to manage the complexity at the back end, and ensure that the front end delivers an experience which encourages customers to take control of their financial futures."
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