Yahoo Finance Plum CEO: Day trading boom was the 'shock' that got a generation interested in investing
The founder of investments app Plum believes the rise of day trading during the pandemic has been the "shock to the system" that has got a generation interested in investing.
CEO Victor Trokoudes hopes the new wave of interest in investments will mean a step in the right direction for his business — a DIY investing and saving platform, and its plan to offer individual stocks and cryptocurrencies, as well as its expansion into other European territories later this year.
"I’m of the belief that you need to learn to invest, and making or losing some money is the way to do so. Hopefully that hype and that flush of news gets people interested," says Trokoudes on the recent boom in people investing from their bedrooms.
"Hopefully they see that, they get interested, they open an account and then we give them the right tools for long-term and continuous investing and they get into those habits, which will be very beneficial for society."
"I think you need to shock the system to get movement and that was it. And our generation will have a higher percentage of people investing," says Trokoudes, adding the caveat that on balance, the majority of day traders lose money.
Trokoudes began his investing journey with money given to him by his dad, monitoring stocks on Yahoo Finance after swimming practice in Cyprus.
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At the time he wasn't a big fan of monitoring his investments closely, which sowed the seeds of what Plum is today.
"I like the idea that it was continuously positively happening in the background," says Trokoudes.
After university he went on to work as a trader for Morgan Stanley and later joined fintech platform Transferwise — a job which he says opened his eyes on how you can successfully make a change in fintech and people’s finances.
In 2016, he and Alex Michael founded Plum, which says its technology "acts like a brain" by automating the parts of personal finance that people find difficult or don’t have time for.
It sets aside what each person can afford, finds better deals on everyday bills, offers useful spending insights and provides a simple platform for easy-access investments.
The fintech, which now has more than 1 million users, has grown rapidly over the past year, and has raised $19.3m (£13.6m) since its inception. It is now far from its first iteration as a messenger bot, with an iOS and Android app launched in 2019.
A Swiss army knife of products in one app, the company has now grown to include an investment platform, budgeting analytics, and interest on savings. Customers can also choose from funds that are risk-managed according to their current age and the remaining years to retirement.
Its most recent product is a self-invested pension plan (SIPP), and you will be able to trade cryptocurrencies and individual stocks on the platform by the end of the year, says Trokoudes.
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The pandemic has been a boon for the business, with pent up lockdown savings adding fuel to the fire for many new, young investors. 75% of Plum's customer base is under 35, with the average age of a saver at 28, and average age of an investor at 31.
"The first month or so everyone was trying to figure out what to do with their life, but it really accelerated the business," says Trokoudes. The amount of savers on the platform tripled during COVID.
"We had record months of people opening up investment accounts with Plum as well."
The advent of Plum's pension product has also shown a growing interest in green investing, with 60% of people that have opted to use the product so far going for a green plan.
The business is likely to try to launch in seven new European markets by the end of the year, with a presence already in the UK, France, Spain and Ireland.
"The movement from saving a few pounds at a time to consolidating your whole pension takes time," says Trokoudes.
"We want to build a platform where the essence is how to put money aside and also how to grow it."
Watch: What are the risks of investing in cryptocurrencies?
