GETTING IN THE GAME

Online platform eToro has turned investing into a team sport with its social media-style community, copycat trading tool and even a campaign targeted at football fans. UK Head of Marketing Stephanie Wilks-Wiffen explains the rules

Children learn at a young age in The classroom that copying their mate’s homework can be a neat shortcut to success – as long as your mate’s got the answers right, of course!

This, in a nutshell, is the ethos behind eToro’s drive to attract new people to the world of retail investment. What began with ‘social trading’ (small investors discussing assets and strategy in internet chatrooms) has developed into the Copy Trading service, whereby eToro customers can observe and have the choice to replicate every move another makes.

The trick, of course, is to follow a trader who knows what they are doing – and the eToro platform provides the tools needed to examine past performance, current positions, and ask questions directly of the copied trader. Copy Trading was developed by eToro to attract people previously unwilling or unable to enter the world of retail investing because they didn’t think they had the time or knowledge to do so.

“People really enjoy our social trading tools – they come to the eToro platform, talk to other traders, ask questions. They can learn from them but, most importantly, they can also copy,” says Stephanie Wilks-Wiffen, eToro’s UK head of marketing.

“To take myself as an example, I work full-time, but I have an interest in tech stocks. I don’t have the time to do the research, to trade throughout the day, so I can go on to the eToro platform and find other investors with an interest in similar asset classes. I can see their past performance, what their attitude to risk is. I can assess whether this seems like it’s a good fit for me and, if so, I can copy them at the click of a button. That means that when they buy, I buy, when they sell, I sell, and that is completely free for customers to use.”

The usual warnings of capital being at risk apply, of course – which is why, once aboard the eToro platform, users can lift the bonnet on other traders’ portfolios
in order to minimise their exposure. eToro has a membership of 11 million people and investors’ histories are open for all to see, as are their annualised profits. There is a performance simulator that shows how your assets would have delivered – or not – had you started copying at various intervals. Beyond this, the platform offers the traditional tools provided by other online brokers, such as broker/analyst reports and charts.

The focus is on providing access to buying stocks and cryptoassets, as well as the ability to trade major currencies, commodities, indices and ETFs. Algorithms track the performance of customers, and traders who allow themselves to be copied, and who are a part of the eToro’s Popular Investor programme, are rewarded by receiving payment from eToro.

Wilks-Wiffen says: “The great thing is that the people you’re copying actually have skin in the game. They are using their own funds to manage their own investments, and you are copying what they are trading with your own money. So this is different from buying into the services of a traditional asset manager who manages other people’s money.

“The onboarding process is pretty straightforward. You enter your name, email address, current address, and because we are a Financial Conduct Authority
(FCA)-regulated platform in the UK, like other regulated platforms we have to ask for know your customer  (KYC) information. This involves asking you about your income, attitude to risk, how much disposable income you have to invest, and what kind of things you’re looking to invest in.

“Once you have registered on the platform, you have three choices. You can transfer money in and start investing in the products of your choice. If you’re not quite ready to invest, we offer a $100,000 demo account where you can play with fake money, but on the real-life market, so you can get a feel for the platform. Or you can just surf the feed, see what people are talking about and ask questions. We have an 11 million-strong global community, so there are lots of people to ask.”

The TripAdvisor model

Set up in 2007 in Israel, eToro is regulated by the FCA in the UK, the Australian Securities & Investments Commission in Australia, and everyone else is covered
by Cypriot regulation.

While investing in stocks is commission-free, the business makes much of its money, as with all other brokers, through its spreads, and charges a $25 flat fee for withdrawing cash from an account. All accounts are held in US dollars.

Wilks-Wiffen says eToro’s ultimate aim is to become the ‘Amazon of finance’ by using the social media-style community ethos that has made businesses such as TripAdvisor so successful.

“eToro started out as a vanilla derivatives platform, however, we’ve progressed a lot in the 12 years we’ve been around. There are a lot of websites and platforms that offer various opportunities to invest but there’s not really one platform that addresses all of your financial needs.

“eToro can cater for people who are looking for long-term investing, short-term investing, investment in regulated assets such as commodities, indices, stocks, or unregulated assets such as cryptoassets.

And they have choice. They can invest in anything, from crypto to stocks, to exchange traded funds (ETFs). We provide a one-stop shop for a lot of those investment needs, and we believe we’re the only platform where you can hold regulated
and unregulated assets in one portfolio.”

The aim is to ‘get everybody investing’ and Wilks-Wiffen believes there are three key pillars to achieving this.

“A lot of fintechs are only tackling the first, usability,” she explains. “Most platforms have a lovely user interface – we’ve all seen the pie charts and sliders, it’s pretty much fintech 101. The other two pillars, which eToro addresses, are community knowledge and choice. Our customers can ask the community for advice on certain investment products, just like, when you’re going to book a restaurant or hotel, you go to TripAdvisor and ask your peers.”

To achieve its growth targets, eToro’s marketing seeks to engage people who would otherwise consider investment as something only done by men in suits. And it’s employed a wide range of techniques and messaging to reach them. Its ‘goojybooboo’ advert, featuring A-list actor Alec Baldwin taunted: “Let me guess, you’re too busy to watch this ad. Like you were too busy to invest in Bitcoin or Ethereum.” Late last year it launched eToro FC, which built a community of UK football fans who were interested in investment and crypto assets. The firm ran the #WelcomeToTheClub Premier League marketing scheme, which involved partnerships with seven Premier League clubs – Tottenham Hotspur, Cardiff City, Crystal Palace, Brighton & Hove Albion, Leicester City, Newcastle United and Southampton. eToro FC provides educational materials, tutorials and market news, plus access to unique football content and competitions. Deals were paid for in Bitcoin. It’s also hired digital marketing consultancy PMYB to run a campaign employing internet influencers. Thirty of them were recruited from the technology, lifestyle, gaming and sporting niches to introduce eToro to their followers. Their aim was to explain how fans’ knowledge of the brands they love could be put to use in an investment context. The agency used data to identify which brands were relevant to each group, then demonstrated how they could be invested in via the eToro platform.

Wilks-Wiffen says: “We’re trying to turn the world of investing on its head because people can see it as dull or scary. Our campaign around investing in brands that you know and love aimed to take conversations from the dinner table to real life. So, if you’re talking about how much you love Uber or Airbnb, or how you really believe in a cause – for example, what the Body Shop stands for – why not invest in these brands?

“We’re trying to connect on a different level. Everyone knows they need to invest for their future – there’s lots of education available, but it doesn’t necessarily translate into behaviour. We aim to connect in a meaningful way that makes sense to people.”


This article was published in The Fintech Finance Magazine: Issue #15, Page 88 & 89.

Author: Yash Hirani

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