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Online trading platforms have transformed the way we put our money to work . Iain McCombie , joint manager of the Baillie Gifford UK Growth Fund , explains how these companies brought financial power to the people
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The value of your investment and any income from it can go down as well as up and as a result your capital may be at risk .
Back in the days before digital , retail investors tended to buy funds directly from a variety of managers , making it hard to calculate what their total investments were worth . Portfolio changes involved letters , faxes , phone calls and the navigation of complex tax implications . Little wonder most customers just ‘ bought and forgot ’ or left managing their portfolios to the pinstriped professionals . Technology transformed everything , enabling the dramatic growth of investment ‘ platforms ’. These online financial shops allow investments to be traded through a single website or app , catering for both do-it-yourself investors and financial advisers . Investors can see all their accounts in one place , monitor and manage holdings , and research new investment ideas . “ People now take for granted this massive improvement in the investor experience ,” says McCombie . “ But at the beginning , only a few entrepreneurs really grasped the transformative potential of internet technology .” Even more important than the technology has been a growing realisation that we will all need to provide for our own retirement , as more companies close defined benefit pension schemes ( guaranteed by employers ) and move to defined contribution schemes ( which depend on the performance of investments ). The need for long-term savers to manage their own investments has helped the platform industry to grow
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