Lightyear Investing Review

Written by Sam Hodgson
Last updated: 2nd November 2023

A Comprehensive Review of Lightyear Investing

Whether you’re an investor looking to grow your personal wealth, or a business aiming to make your spare funds work harder, we think it’s worth taking a look at Lightyear Investing as a platform.

Lightyear is a UK/EU-based stockbroker that offers low fees and a wide range of investment options, as well as high interest on your uninvested cash.

The main selling point for the platform is very low fees, both for trading investments and for holding them, but the drawbacks are that you can’t invest in funds, such as Unit Trusts and OEICs, and you can’t invest in an ISA or SIPP (tax-efficient wrapper).

In this review, we’ll explore everything you need to know about Lightyear Investing, from account types to fees, platform features, and alternatives.

Key Takeaways

• Lightyear Investing is a great platform if you’re looking for a broker with low commissions, an easy-to-use mobile app, and up to 4.5% interest on uninvested cash.
• It offers access to over 3,500 stocks & ETFs and fractional shares, so you can tailor your portfolio towards financial goals and diversify as much as you wish to give yourself less exposure to risk.
• Lightyear has also recently expanded into Exchange Traded Commodities (ETCs) like gold, allowing customers further diversification of assets within a climate of high inflation.
• Customers are generally satisfied with Lightyear’s convenience, user experience & helpful support, despite some concerns about limited selection of certain investments.

Overview of Lightyear Investing

Founded in 2020 by Lightyear Financial Ltd out of a desire to make the European market more accessible for investors, Lightyear Investing has quickly gained traction among DIY UK investors.

This innovative stockbroker operates in both the UK and EU, making it an accessible option for investors in these regions.

What sets Lightyear apart from its competitors is its low fee structure, coupled with the ability to earn interest on uninvested cash. Additionally, the new expansion into ETCs gives Lightyear Investing an edge over many of its contenders simply because of the investment choices available.

Account Types and Investment Options

Lightyear Investing offers a General Investment Account (GIA) that provides access to over 3,500 stocks, shares, ETFs and ETCs.

This wide array of investment options allows you to tailor your portfolio to your unique financial goals and risk tolerance, and diversify through different asset classes to limit your exposure to risk.

However, it’s worth noting that Lightyear doesn’t currently offer tax-free savings with asset classes such as ISAs or SIPPs.

We’ll now run through the array of investment options offered by Lightyear… 

Stocks and Shares

With Lightyear, you’ll have access to more than 2,000 US stocks, 200 UK stocks, and popular companies from Europe and China. Their platform is constantly updated with new stocks, ensuring that you always have a diverse selection to choose from.

One of the standout features of Lightyear Investing is the ability to purchase fractional shares. Fractional shares allow you to:

• Invest in a range of shares without requiring a large amount of money in your account
• Provide better management of assets
• Ensure that you can invest in your desired companies regardless of share price

ETFs (exchange-traded funds)

In addition to individual stocks and shares, Lightyear Investing also provides access to over 200 ETFs. ETFs are investment funds that trade on stock exchanges, and hold a basket of assets such as:

• stocks
• bonds
• commodities
• a combination of those

These ETFs offer investors a way to participate in the stock market without directly purchasing individual stocks or engaging in stock trading, minimising risk through diversifying your portfolio.

The best part? There are no fees for purchasing ETFs through Lightyear Investing. This allows you to build a well-diversified portfolio without worrying about additional costs eating into your returns.

ETCs (exchange-traded commodities)

Lightyear has recently added the option to trade in gold, in addition to its 3,500+ stocks and ETFs.

The ETC uses a gold-tracking index backed by physical gold bullions held with the custodian J.P.Morgan.

Movements in commodity prices act differently to price fluctuations of stocks or funds, so trading commodities is an extra layer of diversification and risk management.

This development also highlights Lightyear’s commitment to progress and expansion of its services. 

Money Market Funds (MMF)

These are low risk, highly liquid, AAA-rated, interest paying investments.

MMFs invest in a pool of short-term bonds from governments or private companies.

These are not traded on an exchange, but traded with the issuer themselves and priced daily.

This too can be utilised as a risk management strategy to diversify.

Also, the charge for holding these is 0.09-0.30% annually taken from monthly distributions.

Earning Interest on Uninvested Cash

A key advantage of Lightyear Investing is the competitive interest rates offered on uninvested cash balances.

This means that any cash sitting idle in your account can still generate an additional income stream for you.

Lightyear takes the central bank rates and passes them onto customers, with a small admin fee on top. Currently this sits at 4.5% for the UK and US, and 3.25% for Europe, but is subject to change with market fluctuations.

Fees and Charges

One of the standout features of Lightyear Investing is its low fee structure.

They charge low fixed trading fees for share investments, no fees for ETFs, and reasonable currency conversion fees.

And they also don’t charge for holding these assets on their platform, which most providers take an annual cut from or a monthly fee.

This makes Lightyear a cost-effective solution for investors looking to maximise their returns.

Here’s a more detailed breakdown:

Trading Fees

For stock buying, Lightyear charges low trading fees: 0.10% (minimum $0.10, maximum $1) for US shares, £1 for UK shares, and €1 for EU shares.

These low trading fees make Lightyear an attractive option for those of you looking to buy and sell shares without incurring excessive costs.

Coupled with their competitive interest rates on uninvested cash, Lightyear investors can maximise their returns while minimising expenses.

Currency Conversion Fee

When it comes to currency conversion, Lightyear charges a competitive fee of 0.35%. This fee applies whenever you need to change currency in order to buy stocks, making it cost-effective for international trading.

Withdrawal and Inactivity Fees

Another advantage of Lightyear Investing is that they do not charge any withdrawal fees. This makes it easy for you to access your funds without worrying about additional costs, providing a seamless experience when moving money in and out of their account.

Moreover, unlike some of its competitors Lightyear does not charge an inactivity fee, nor is there a minimum deposit.

Platform Features and Usability

Lightyear’s platform is designed with the user in mind, offering a range of features that make it easy to navigate and find the information you need.

The platform provides detailed company information, an efficient search tool, and well-organised asset groups. These features allow you to easily discover new investment opportunities and make informed decisions about your portfolio.

However, bear in mind that the platform does not feature advanced charting, which may be a limitation for more experienced traders who require these tools. But for the majority of DIY investors, Lightyear’s platform provides a user-friendly experience that simplifies the investment process.

Safety and Security

When it comes to the safety and security of your investments, Lightyear Europe has you covered. The platform is regulated by both Estonian and UK authorities, ensuring the protection of your funds.

Your non-US assets and cash are secure up to €20,000, providing peace of mind as you invest.

However, keep in mind that Lightyear Investing doesn’t fall under the coverage of the UK’s Financial Services Compensation Scheme (FSCS). Despite this, the company’s regulatory oversight and strict security measures make it a safe and trustworthy option for you.

Customer Reviews and Experiences

It holds an impressive score of  4.8 on Trustpilot, with customers praising it for its convenience, low fees, and great customer service. They appreciate the user-friendly platform and the ease of setting up an account.

However, some customers have expressed concerns about the limited selection of certain stocks and ETFs. This criticism will weaken as Lightyear makes further progress towards expanding all asset classes, such as stocks, funds and commodities.

When it comes to customer service, Lightyear’s email support is efficient and helpful, but they do not currently offer phone or live chat support. 

While their response time may sometimes be slower than desired, overall, customers seem to be satisfied with the assistance they receive from Lightyear’s support team.

Multi-Currency Accounts and International Trading

For investors looking to trade in multiple currencies and invest in different markets, Lightyear supports multi-currency accounts, allowing you to trade in:

• GBP
• USD
• EUR
• HUF

This feature enables you to store foreign currency for international trading, making it easier to invest like a local in various markets without the need for constant currency conversion.

Lightyear’s multi-currency accounts provide a significant advantage when trading internationally, as they reduce the effects of currency fluctuations and help you avoid additional conversion fees.

Alternatives to Lightyear Investing

While Lightyear Investing offers a solid platform for DIY investors, it may not be the perfect fit for everyone. If you’re looking for tax-free savings, advanced trading tools, or expert-managed investments, you might want to consider alternatives such as Moneyfarm or Nutmeg.

Other investment platforms worth exploring include:

• DEGIRO
• GenDeep
• Caissa
• SkenarioLabs
• Wealthyhood
• eToro
• Trading 212
• Freetrade
• Plum
• Wombat

These alternatives present a variety of features, fees, and investment options, thus it’s important to identify the one that aligns best with your individual needs and investment aspirations, and weigh up the pros and cons of each.

Summary

In conclusion, Lightyear Investing provides a user-friendly platform with low fees and a wide array of investment options for DIY investors.

Although it may lack certain features like advanced charting or tax-free accounts, it remains a strong contender for those looking to manage their own investments.

With competitive interest rates on uninvested cash, multi-currency accounts, and an easy-to-use interface, Lightyear Investing is a solid choice for anyone looking to take control of their financial future.

Frequently Asked Questions

Is Lightyear investing safe?

Investing with Lightyear is safe, with assets covered up to €20,000 by the Estonian Investor Protection Sectoral Fund and US investments up to $500k under SIPC. RiskSave, regulated by the Financial Conduct Authority (FCA), has appointed Lightyear as a representative.

Is Lightyear a good investing app?

Lightyear is an excellent choice for retail investors due to the high interest rate, low fees, and great mobile app.

What is Lightyear investing?

Lightyear is investing in offering users a competitive 4.5% interest on uninvested funds, access to over 3,500 stocks, a multi-currency account, ETFs and ETCs.

What are the fees for Lightyear investing?

Lightyear offers 10 free stock trades for Metal accounts, 5 for Premium and 3 for Plus accounts. Standard accounts get 1 free trade and then the commission is 0.25% or $1, whichever is higher.

What types of assets can I invest in with Lightyear Investing?

With Lightyear Investing, you can invest in stocks, shares, money market funds, ETCs and ETFs – an extensive range of assets that provide great potential for returns.