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BlackRock joins forces with neobroker Bucks to create a low-cost savings plan using exchange-traded funds to encourage the world’s largest asset manager to adopt ETFs among more retail investors across Europe offers.
Investors can build an investment portfolio of up to 10 BlackRock iShares ETFs on the Bux platform with a so-called savings plan with a flat monthly fee of just €1. Investors can make portfolio trades where they can adjust the allocation of all his ETFs for a €1 fee, and the minimum investment required is set at just €10 per month to appeal to young depositors. It has been.
The Bux ETF Savings Plan will launch on January 31st in 8 countries: Netherlands, Belgium, Germany, Italy, France, Spain, Austria and Ireland.
The initiative shows how intense price competition over ETF fees is spreading to other areas of financial services, such as transaction costs for savings plans and fund transactions.
BlackRock has struck similar deals with around 30 distribution partners in Europe, including banks and online brokers, in anticipation of a significant acceleration in the adoption of ETFs by retail investors on digital investment platforms. With approximately 3.1 million savings plans already established using iShares ETFs, BlackRock expects 10 million new investors across Europe to begin buying ETFs via digital investment channels over the next five years, with 5,000 We anticipate creating a new asset pool worth €100 million. End of 2026.
Bucks CEO Yorick Naev said the new ETF savings plan would appeal to younger and less confident investors who are intimidated by their lack of experience and knowledge of the financial markets.
“Working with BlackRock has created a great solution for clients who are overwhelmed with product choices and unsure of when and how to start investing,” said Naeff.
Christian Bimueller, BlackRock’s head of digital distribution across continental Europe, said the new partnership with Bux is “a simple, accessible and cost-effective way for investors across Europe to enjoy the benefits of ETFs. will create an efficient way to invest in global markets.” ”.
Germany, which already has about 5 million ETF savings plans, has emerged as one of the key battlegrounds for new investor money, according to BlackRock. He, DWS, the asset management arm of Deutsche Bank, and Vanguard, the world’s second-largest asset manager, also signed distribution partners to attract retail investor interest.
Trade Republic, a German online broker and another of BlackRock’s distribution partners, expanded to 11 new European countries in October.
To date, investment flows and trading activity in Europe’s $1.4 trillion ETF industry have been almost entirely dominated by large institutional investors.
However, some European regulators have said that encouraging more retail investors to use ETFs instead of actively managed mutual funds could improve consumer returns. thinking about.
The EU’s head of financial services, Mairead McGuinness, has voiced support for a ban on the solicitation of money managers to pay financial advisors to recommend products to their clients. ETF providers do not pay financial advisors for these incentives (also known as retroactive). The lack of financial incentives for advisers to recommend her ETFs to clients is widely seen as one of the main reasons for the relatively low adoption rate among European retail investors.
At a meeting of the European Parliament’s Committee on Economic and Financial Affairs last week, McGuinness said: “Low-cost products like exchange-traded funds are largely discouraged, impacting the bottom line consumers can expect. ‘ said.
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