Winterflood Business Services has launched a fractional share dealing facility allowing clients to trade and hold ETFs to four decimal places. The solution enables robo-advisers, platforms, discretionary fund managers and financial advisers to fully invest into ETFs and ensure these instruments can be used effectively through model portfolios of all sizes.

Alex Kerry, head of Winterflood Business Services

Fractional dealing helps smaller investors to access markets which may previously have been impractical to invest in. Online investment companies, including robo-advisers, are set to be key beneficiaries of the new service.

Indeed, Winterflood has announced that Moola is the first client to go live with the service, becoming one of the first UK-based online investment managers to offer trading and custody of ETFs on a fractional share basis. The move follows in the footsteps of rival Nutmeg who began offering fractional share trading in March 2016. Winterflood also expects Parmenion, Novia and Wealthify to commence with the service in due course.

Alex Kerry, head of Winterflood Business Services, commented: “We believe fractional share dealing will help more platforms to build a wider investable universe for micro investors and encourage saving and investment. Through our automation and aggregation services, we have successfully been able to reduce fees and improve access for the end investor.

Together with our aggregation engine, fractionals also opens up access to a wider investment universe for more discretionary fund managers and financial advisers who will now be able to fully invest their clients’ money.”

Gemma Godfrey, founder of Moola, added: “The ability to buy a fraction of an investment means an entire portfolio can be constructed with a far lower amount of money. For the mass-affluent market in the UK, equating to £2 trillion of untapped capital, this provides a more manageable entry point to start their investing journey and a service for advisers to satisfy smaller investment needs.”