Stake makes trading US stocks easy for Australians

Posted: 1 June 2017 11:48 am

Stake 738

Source: Stake. Dan Silver; Founder & COO, Matthew Leibowitz; Founder &CEO, Jon Abitz; Founder & CTO

The Sydney startup’s online trading platform provides a user experience akin to online shopping.

Sydney startup provides Australians easy access to US stocks via its fully digital, streamlined online trading platform. It offers access to over 3,000 US stocks and Exchange Traded Funds (ETFs) and, since launching only two months ago, has seen several hundred investors sign up.

I recently sat down with Stake co-founder and chief operating officer Dan Silver, to chat about the newly launched platform, how it came about and what if offers Australian investors looking to enter the US stock market.

“People would come to us and say ‘where should I go and invest? I know you’re in the market and you know what to do.’ We couldn’t say hand on heart - we’d basically have to say we don’t know,” Silver said.

“We thought, what about if we could build something that we ourselves would be proud to put our money in? And also to be able to go and tell people, actually, we’ve got this great place to go and invest.”

The founders felt that a platform which provides easy access to US stocks, and that offers investors an online shopping like experience was a gap in the Australian market.

“We looked at Australia and thought everything is extremely expensive, inaccessible and you have to basically go and manage your money in all these different places. What about if we could actually bring that all together?”

Online shopping experience layer

Silver said the premise behind Stake was to build something that they themselves would use and want to recommend, and to do it in an intuitive way. This is how the idea of creating an online shopping experience for financial products came about.

“When we started it we did quite a lot of research, and there’s nobody we’ve found that’s tried to do something similar. When we were building it we were taking more guidance and learnings from Amazon and Asos than we were from Commsec or even some of the US platforms. Everyone knows intuitively how to shop online, they know how to go and buy groceries, they know how to buy a pair of shoes or a top, so why can’t it be that easy for finance?”

“Ultimately we’re building an experience layer. All we want is for people who have never had the confidence to invest before to at least be able to go and say, ‘yes I know how to go and buy a financial product now. I know how to buy something on Stake, and it just happens to be a financial product’,” Silver said.

Additional platform features

Similar to an online store, investors can go onto Stake and use the ‘search feature to segment areas of interest. For example searching the term ‘shoes’ would bring up major shoe companies like Nike and Steve Madden. Investors can also search by terms, for example the upcoming British election, and the platform will segment all the companies that would be affected by the election.

The ‘Discovery’ feature allows users to see how many people have clicked on different shares and ETFs, how many people have added it to their watch list and how many people have actually bought it.

The most unique feature is the gift card concept, which allows you to purchase US shares as a gift for someone else, with the process the same as buying any other gift card.

“What we’re building is an investment site through and through, so that people feel it’s the best place to go and invest and they feel comfortable doing so. Gifting is an added concept to be able to share that,” Silver said.

However, the most compelling notion is that Stake has digitised the whole process, including the W8BEN forms Australians are required to complete for the US tax office. These forms are notorious for being challenging and time consuming, with Silver adding; "When you speak to people who have filled them in, their face goes green! And we’ve fully digitised that."

All the bells and whistles sound great, but what about the fees?

Stake’s trading fees promise to be significantly lower than other trading platforms, particularly those of the big banks. Silver said being able to offer such low fees is about finding the right trading partner who buys into what they’re trying to achieve.

As an example, based on 20 trades of $15,000 USD with the same exchange rate, the average cost per trade though Stake is AUD$18.49, compared to up to AUD$238 with one of the Big Four banks.

“You’re getting access to the same underlying product, an Apple share for example, with a better, fully digital experience at a significantly lower cost. That’s a pretty compelling proposition,” he said.

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