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Hubwise launches fractional ETFs service

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Hubwise has become one of the first platforms to enable fractional units in ETFs to be added to a client’s portfolio when investing or when a model is being allocated as part of an investment strategy.

Previously, the ability to only buy a full share in an ETF has resulted in residual cash or different asset weightings than prescribed. Investors have only been able to buy whole shares in a single-company stock or exchange traded fund (ETF) on platforms.
 
These shares cost specific monetary amounts, for example GBP43.78 per share, making it tricky if the investor does not have enough money to purchase a whole share or prefers to invest a fixed sum like GBP100.
 
The introduction of fractional units (up to four decimal places) allows the exact sum to be invested in an ETF mirroring what the investor has been able to do with unit trusts and OEICs.
 
Hubwise is also launching a communications suite ‘Campaign Manager’ to enable advisers using model portfolios to electronically deliver to the client: their rationale for the investment advice; supporting documentation (KIIDs); and a schedule that details the transactions that will be undertaken to achieve the recommended changes to the portfolio “portfolio effect”.
 
The adviser’s clients can then accept the recommendation electronically authorising the trades to be undertaken on a set date or in the normal daily process. The adviser is then able to monitor those clients who have or have not accepted the revision and chase accordingly. Dealing charges are kept to a minimum when dealt with as part of a bulk trade.
 
Jeff Plowman, chairman of Hubwise, says: “Designing and developing our own software enables us to provide market leading solutions ahead of the opposition. Above all, we aim to make life easier for our adviser clients whilst improving the investor’s experience.
 
“The advent of changes, particularly with new pension legislation, has increased the search for cost-effective ways to invest, making ETFs and index funds a perfect solution.”
 
Joe Parkin, head of iShares UK wealth and retail sales at BlackRock, says: “ETFs continue to challenge the status quo when it comes to investing. There is a clear trend towards investors wanting to use ETFs to manage their portfolios and invest their regular savings, and fractional services will help level the playing field with other investments – empowering investors and their advisors to buy and sell ETFs seamlessly and cost effectively. This is a big deal for the UK investment industry.”

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