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Lightyear Investing App REVIEW – 6 Problems It Solves!

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In this Lightyear Investing review we explain what makes the Lightyear app different. To do this, we outline some major investing problems Lightyear solves when compared with some of the more traditional investing platforms out there.

First off, let’s just quickly outline some of the main features of the Lightyear app.

  • Multi-Currency accounts available at no cost
  • Competitive interest rates paid on uninvested cash
  • Maximum trading fees of £1, $1 or 1 Euro per trade
  • Fractional investing available for high value US shares
  • Low Currency Conversion Fees at Interbank rates
  • Free Investing tools to help you learn and succeed
  • No Lightyear Execution Fees on ETF investments – other fees may apply

The Team Behind Lightyear

One of the first things I like to do when writing a review is to look at who is behind the platform, to see if it is credible.

The good news with Lightyear is that there are some instantly credible names that jump out, filling you with confidence that the company know what they are doing.

The founders of Lightyear are Martin Sokk and Mihkel Aamer. This pair were former members of the team over at Transferwise – now known simply as Wise. Wise made international money transfers cheap, fair and simple. This is the same philosophy Lightyear are now applying to trading and investing.

It’s also encouraging to see that Lightyear have secured financial backing from Sir Richard Branson of the Virgin Group.

Getting Started With Lightyear

While Lightyear have recently launched a web based version of their platform, this is still in beta stage and can only be accessed by already verified investors.

So to get started with Lightyear, you’ll need to download the Lightyear app* from your App Store of choice.

On downloading the app myself I was asked to verify my phone number and enter some other details to confirm my identity.

Lightyear Solves Common Investing Problems

One of the main things I wanted to achieve with this Lightyear review is to explain what problems the platform solves for investors. Let’s consider 6 of these problems.

Problem 1: High commission on share trades

One of the biggest barriers to entry for those looking to trade stocks and shares are the high fees charged by traditional investment platforms. If you wanted to buy a share in Coca-Cola, for example (currently priced at around $61 per share), then you would need to pay a commission fee of perhaps £10 or more to buy that share and then a further £10+ to sell it! You can see how these kind of fees might wipe out any profits you might make through gains in the share price.

SOLVED – With Lightyear you will only pay a maximum of £1, $1 or 1 Euro per share trade.

Problem 2: Investing in high value shares

Another problem faced by some investors is that of investing in shares that are of particularly high value. If you want to invest in Microsoft, for example (currently trading at $327 per share) but you only have $100 to invest, then with traditional investing platforms you would be priced out of this trade.

SOLVED – Lightyear allows fractional investing on some US shares. This means that rather than having to buy a whole share, you can buy a fraction of one instead.

Problem 3 – High currency conversion fees

High currency conversion fees is yet another issue traditionally faced by those looking to invest in overseas shares. If you live in the UK, for example, but want to invest in US stocks, you will need to exchange your pounds into dollars to make the trade. This would often be at less than favourable exchange rates and come with hefty currency conversion fees too.

SOLVED – The first way Lightyear address this problem is by allowing you to hold multiple currencies in your account. This means if you sell a dollar denominated share, then you can hold that dollar balance in your account until you want to buy another dollar denominated share, even if you are a UK investor. The same is true with euros. If you do need to convert your currency in order to buy a share, then the currency conversion fee charged by lightyear is set at a very reasonable 0.35% and your money will always be converted at the live interbank rate. This is the rate at which banks convert currencies with one another.

Problem 4 – Lack of return on uninvested cash

Another way investors can miss out unnecessarily is when you hold uninvested cash in your trading account. Many investment platforms don’t pass on the full interest they are receiving on this money. If they do, they often only pay if it’s held in a certain currency.

SOLVED – Lightyear pay interest rates they themselves receive on multiple currency balances held within your account. The interest rate paid by Lightyear is equivalent to the current base rate set by a relevant central bank minus 0.75%, which Lightyear transparently take as a cut. At the time of writing – 20/11/23 – this rate is between 3.25% and 4.5% depending on which currency your balance is held in.

Problem 5 – Fees on ETF investments

ETFs are now widely known by investors as being an economical way to invest, mainly due to their popularity among robo advisor platforms like Moneyfarm, InvestEngine and others. While ETFs are less costly than some other types of investment, many traditional investment platforms still charge a one off fee to buy them. Robo advisors charge an ongoing fee to manage your ETF portfolio for you.

SOLVED – Lightyear don’t charge you execution fee or a management fee to invest in ETFs. While ETF providers do charge management fees themselves, Lightyear do not add any of their own fees on top of this. (Other fees may apply)

Problem 6 – Monthly fees

A final problem that some investors face is that of monthly fees being charged by their investment platform, just to maintain an active investment account. This could be around £10 per month with some platforms.

SOLVED – Lightyear do not charge any monthly fees to use their platform.

Lightyear Fees

While we have already mentioned some of the fees charged by Lightyear in this review, it’s always helpful to see them in one place. You can see all their fees on the Lightyear website*.

Do remember that there are sometimes extra fees involved with investing which Lightyear don’t have any control over. These include fees like stamp duty on share sales (or equivalent fees in the country you are investing in. Then there are management fees charged by various fund managers when investing in funds or ETFs. Finally you may have to pay tax on any gains you make, be it capital gains or on income.

Lightyear Investing Tools

Lightyear also offer some free features to help you grow your investing knowledge. These tools include Live news feeds related to stocks you own along with other analyst ratings and price expectations.

The company also have features which will help you to understand any investing lingo. While Lightyear do try to simplify the investing process a little knowledge can still go a long way.

Lightyear Reviews

While we hope that this Lightyear review has helped you to understand more about what Lightyear offer, it’s good to hear what experiences other Lightyear customers have had with the platform. This includes the customer service on offer.

The reviews left by Lightyear users on Trustpilot so far have been very positive. Lightyear are currently rated as excellent based on 585 reviews and score an impressive 4.7 out of 5 stars.

Is Your Money Safe With Lightyear?

Lightyear outline in great detail on their website the efforts they make to safeguard your money. Of course, Lightyear are not able to shield you from any unwise investment decisions. Governmental protection schemes are not designed to cover investment losses which may or may not be related to unwise investment decisions.

You can read more about their safeguarding process on the Lightyear website.

Are There Any Drawbacks?

In this Lightyear review we’ve highlighted many of the pros Lightyear has to offer for investors. But are there any cons to using Lightyear? The answer is that – presently – there are some cons to mention. The company do say that they are working to resolve these issues, though.

The main drawback I personally can see is that you can’t currently invest via a Stocks and Shares ISA or pension account. This is due to the company not yet being FCA authorised. This is something Lightyear are working on resolving. The company hope to offer a Stocks & Shares ISA in the future.

If you really want to invest via a Stocks and Shares ISA then you might want to check out our reviews of robo advisors like Moneyfarm and InvestEngine.

If you want to pick your own Stocks and Shares, then maybe a more traditional platform such as Hargreaves Lansdown might work for you.

Another potential drawback with Lightyear is that crypto trading and CFD trading are not available.

What Do We Think Of Lightyear?

It’s hard not to be impressed by what Lightyear have to offer investors. Lightyear solve many problems that prove to be a barrier to entry for most new investors. These solutions include low trading fees, multi-currency accounts and also fractional investing. The fact that there is currently no Stocks and Shares ISA or pension product available is certainly a drawback but this is something the company are looking to address. All being said, Lightyear seems like a great option for new investors looking to invest in several different markets and currencies. On top of all this, you can earn a decent rate of interest on any uninvested cash in your account.

If our Lightyear Investing review has helped you, then please do consider signing up via this link*. If you do, we will receive a small commission. This helps us to keep this site free to use, at no extra cost to yourself.

Lightyear would also like us to mention the following…

Your capital is at risk. The provider of investment services is Lightyear Financial Ltd for the UK and Lightyear Europe AS for the EU. Terms apply: lightyear.com/terms. Seek qualified advice If necessary.

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