That stodgy phrase “Mum and Dad investors” is fast becoming redundant in the age of mobile trading apps. Today’s investors are likely to be young, dynamic and passionate about markets – yes, they may well be mums and dads, but many millennials see retail investing as a way to make their hard-earned money work for them.

They don’t want to deal with old-school brokers or banks who overcharge and under-service – and the success of Robinhood in the US and Sharesies and Hatch here have seen sleek, easy to use investment platforms cater to new generations of investors. And it’s a sector that has boomed in the pandemic.

Stake, which launched in NZ last year, gives Kiwi investors another trading option enabling NZ users to buy and sell US stocks and ETFs, commission-free. 

Co-founder Matt Leibowitz trained as a lawyer and had been working in Chicago as a high-frequency trader but when he returned to his native Australia he was shocked by the excessive fees and poor customer experience he observed in the sector. 

Investing in the US market from Australia was expensive and difficult. 

Stake set out to solve that. It allows users to invest in name stocks like Apple, Tesla and Amazon; and investors can be up and running in minutes.

Stake is also available in Australia, the UK, Brazil and raised US$40m this year to fund its plans for further global expansion, and has a strong focus on gaining market share here.

Unlike Hatch or Sharesies, Stake has a rather cool app for iOS and Android; and in a recent update all stocks in the Stake universe can be shared to group chats, Facebook, Twitter, and other social media platforms.

I reached out to Matt to find out more about Stake, his own investing journey and what he has planned for the platform.

Matt you spent time in the Chicago financial scene – what was it there that led you to the idea of creating Stake?

When I came back to Australia after my time in the States, I was struck by how different the access was to investing. In the US, all sorts of people had stock portfolios and there was a real energy regarding the financial markets – anyone and everyone participated and there was a real culture around it. In the US, there were no barriers, with pretty much unrestricted access for people to participate. Returning home, it dawned on me how different that was for those outside the US. Investors elsewhere were held back by form, fees and complexity. It was clear to me that there was a gap in the market for a company to provide the access to the US markets that I saw while living there to everyone looking to make their money work harder.

You entered the NZ market last year. How have Kiwi’s taken to the platform; and what else are you envisaging access to on the platform?

We’re stoked with the way Kiwis have taken to the platform. We have over 45,000 customers in New Zealand who have hundreds of millions of dollars invested through Stake. What excites us most is how passionate our NZ customers are, we’re really looking forward to working with and building this community locally, especially since our recent capital raise.

We’re always looking to expand the opportunities available on the Stake platform. We’re about to roll out ASX trading at a price point never seen in Australia, and can’t wait to roll that out in NZ shortly after it’s available in Oz.

We know that low interest rates are luring more Kiwis to become retail investors – but is there something else behind the phenomenal growth of platforms like Stake – isn’t there also generational change driving it, as well as the pandemic?

We recently did some research on the next generation of investors in Australia (18-45), and what we found is that the rise in retail investment is coming from a generational shift towards wanting to be self-directed and independent, we call them Generation I-nance. We found that 81% of investors in this generation are self-directed. This isn’t to say they aren’t educating themselves with 87% saying they would consult an online source before making an investment decision. The report also found that 76% of those between 18-29 want to be their own boss. We see those trends reflected in our investors globally, investment is providing a great avenue for young people to become more financially independent.

Sharesies and Hatch both offer access to US stocks – what differentiates Stake?

I can’t talk to what others provide, but I know what Stake looks to solve.  We’re for those self-starters and leaders who are taking control of their own financial progress. We want to fuel the culture of investing and provide the most seamless access to financial t opportunities and we’re not stopping in that mission. 

Our customers are looking to get more from every opportunity and Stake is the platform for them to get more from their money. From opening up the US markets and soon Aussie in one seamless yet sophisticated app, all the way to how we interact with our customers through content, events and partnerships.  We are the only NZ brokerage to offer commission free trading and we focus on making it a rich and energetic experience both on web and app. Much like our customers, we don’t settle, and we’ll always be the most ambitious platform in the market – as that represents the ethos of our customers and our staff.

Many New Zealand investment platforms and fund managers limit access to unethical investments – Stake, as I understand it, doesn’t… can you talk a little about this…

It’s not our role to judge how someone invests their money. That’s their decision. We focus on providing them the best access they need to do that and we break down barriers that have previously prevented them from doing so.

How quickly can an investor be up and running on Stake?

You can be in the market and have your first stock with Stake in less than 5 minutes. That’s with a real US brokerage account, with all forms and US tax forms completed on the customer’s behalf.  We’re available on app and web and I think your readers will enjoy the experience.  If a new customer funds their account in the first 24 hours, we shout them their first stock. This helps get them going and into the market!

You say you want to make investing fun without simplifying it – that’s quite an ask – how do you walk that line?

Most of all, we try to make trading and investing better.  Yes, Investing can be extremely exciting, particularly in the US market, where companies we see everyday are listed – Apple, Netflix, Facebook, and others. But more importantly, it’s about giving our customers the best way to make more money by giving them access to more opportunities.  As crude as that sounds, that’s what we’re here to do.

In terms of the US market it has within it huge potential for growth and added value, and that’s exciting for our customers. What we strive to do is give our investors the best access and information, so that they can develop, continue to learn and gain experience, while providing a top quality experience.

Stake was forced to block customers in February from buying GameStop shares, have those problems been rectified?

Just to clear this one up, this was not a decision we had any control over – we partnered with a US brokerage and like many US brokerages in the US, they were required to prevent further buying. There was no restriction on existing investors selling any of their positions or trading out.

What do newbie NZ investors in US stocks need to keep in mind?

I think all investing is a learning process. Make sure that you’re taking a good look into the investments you’re making, and invest in a way that lines up with your goals and appetite for risk. There’s plenty of opportunity in the markets, but it obviously involves risk. We would always encourage customers to be comfortable with their own investment strategies.

The big name US shares – Apple, Amazon, Google etc etc – are enormously expensive. How does Stake handle fractional share investing?

Investors on Stake can buy fractional shares in any of the investment products available on the platform with a minimum buy of US$10. Whether an investment is considered expensive is down to the individual investor, but we offer the ability to invest as much or as little are you’re comfortable with, without needing to buy whole shares.

What sort of US tax obligations are investors liable for…?

On Stake, we try to make tax time as painless as possible. We provide customers with the information they need to complete their tax either by themselves or with an accountant. Generally, if the cost of your portfolio is under $50,000, dividend tax has already been deducted and in most cases, no profit tax is required to be paid for regular investors. This can change for a specific class of traders. For those with a portfolio in excess of $50,000, we’d suggest seeking professional advice. For more information, feel free to check out this advisory on what to look out for at tax time.

Of course cryptocurrency investing platforms like Swyftx are also hitting the NZ market – what’s your view on crypto?

I’ve dabbled a bit in crypto, and our data shows that Stake investors are pretty interested in it as well. We’re always on board with people trying out new ways to make their money work harder for them, but obviously cryptocurrency is fairly volatile. We’re focused on breaking down barriers to the US market and we pride ourselves on providing as much information as possible to our investors, so that they can make informed decisions based on their investment goals.

What’s your personal investing journey been like?

Much like anyone’s, I started as a novice and continue to learn. That’s what I really like about the markets, that sense of ongoing development and learning. I made my first investment while at university on the Aussie market and have had the bug ever since. 

After uni, although I started off working as a lawyer, I made my way over to Optiver, an options trading firm in 2007. It was an amazing place to work and I was able to be in the markets full time ever since – I’ve just loved it. The energy and excitement of being challenged daily and to be able to meet people from all over the world and all walks of life, trying to make it in the markets has been inspiring. In some ways, that is the real driver behind Stake – to give everyone the opportunity to get more from the markets and be able to engage with one another in their respective journeys!