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In the latest of our CEO interview series, we hear from Robert Lempka, CEO of social trading broker ayondo.
Many years ago when I was at Investors Intelligence, I visited ayondo. They had just launched their social trading platform with the unique ability to set your own margin rates at 100% (thus mitigating leverage risk). It was a fleeting visit, but I did walk out and down the street with Robert Lempka the founder and CEO.
Far from the typical City of London boss, Robert came across as slightly more at ease, a bit like the Swiss Hedge Fund managers I used to deal for back at Man Financial. Perhaps, that’s what makes ayondo a potential alternative to traditional fund managers, rather than an outright execution-only CFD and spread betting broker.
Five years on, we hear a little more from Robert about what ayondo has to offer…
You’ve worked at some of the biggest names in investing. What prompted the decision to found ayondo?
Almost nine years ago, me and my former colleague at Goldman Sachs Thomas Winkler made the life- and career-changing step to start ayondo. We were eager to start our own business and at that time, the internet changed consumer behavior so much that we knew that there was no way the investment and banking industry would stay the same.
This was when the term FinTech was not even established. We identified the need to offer highly efficient and institutional-like products to retail customers and started to develop ayondo into a leading provider of trading and investment services for B2C and B2B clients.
What ayondo sets apart from other CFD and spread betting brokers is the fact that ayondo offers Social Trading. This modern way to invest allows retail investors to automatically copy the trades of experts.
Social Trading is one of the latest growth industries that tap innovative technology to change the way trading and investment services are traditionally provided.
What is unique about our business is, that we own the full value chain as all trades are executed on our own London based and FCA regulated financial service provider ayondo markets.
So, we basically don’t only deliver the design but also own the technology and the engine that makes the car move.
And how about other social trading brokers like eToro?
What sets ayondo apart from other Social Trading brokers is regulation…
ayondo is the first provider to offer its social trading service under a portfolio management license from the German regulator (BaFin). The Portfolio Management License provides our clients with an even better fit for their individual needs: It ensures that Social Trading meets their personal investment goals, also taking into account their individual risk appetite.
This is ensured, for example, by coordinating the risk parameters of the Top Traders with the risk appetite data provided by the clients. So customers will determine what risk they want to take and will be notified as soon as one of their Top Traders does change their behaviour.
The Portfolio Management License represents an innovation in the European market for innovative financial services and makes Social Trading much more of a real alternative to traditional asset management.
For investors looking to copy traders, why use ayondo instead of a traditional fund manager?
There is a very simple answer to that: Social Trading meets the investment needs of the technology-savvy generation X and Y and is, thanks to their learned online behaviour in social networks, an attractive form of investment. The concept of following someone who is an expert in a certain area is well known.
Currently Social Trading accounts for only a fraction of the addressable market, but is perfectly positioned to mobilise customers. Reasons are, for example, the diversification need for retail investors in the current low-interest environment, the global trend for greater control over investments, particularly for the Millennials who need to catch up in building wealth for retirement.
Also, traditional funds need to be sold to the customer, and the amount of people using their bank advisor is constantly diminishing. The younger generation never sets a foot into a bank branch, so if clients are not big enough to be covered by their Private Banker, they are part of a large under-served customer segment.
What does the name ayondo mean and how did you come up with it?
It is funny, a lot of people ask this question. It does not have any special meaning, although it is a common surname in Africa, Nigeria. It is always helpful to have a name which is easy to remember, easy to pronounce and starting with an a ☺.
What’s the ultimate goal for ayondo? Is it today what you originally planned it to be?
Our goal was always to revolutionise the retail trading and investment space and make customers happy. Did you ever hear a visionary saying that his or her job was done? I don’t think this will ever happen. The trading space has been changing over the last few years, let alone the regulatory side of it.
So, providers have to adapt their business models and constantly strive to improve the product and work towards ultimate goals. And even goals can change: Since March 2018 we are the first listed FinTech Company on SGX in Singapore. So, of course, there came some additional goals with this event.
If I compare the development with a marathon run I can say that we haven’t passed the 10 kilometer mark yet, there is much more to come.
And finally, what are your top three online resources that new traders and investors can use to improve?
My number one is of course our selection of Top Traders on ayondo.com: All ayondo traders work within a five-stage trading career. The higher the level, the longer the Top Trader has proved their trading skills under the trading career. Rankings lists can provide a quick overview of the traders and for deeper analysis, extensive statistics and metrics can be found on the Top Traders’ individual profile pages.
So, clients and website visitors can see every detail and trade of the Top Traders’ strategy. You can learn from the experts, for free.
I would recommend to search for free of charge online webinars to get a deeper insight into risk management, trading strategies or technical analysis or to do a platform tour to make sure you make the most of your trading provider. Most brokers or educational platforms offer free webinars. You can find the ayondo webinar schedule on our website.
May I also give an offline resource to get great insight on how to improve your trading? I feel it is worth sharing with your readers: Call the Customer Service or Account Manager of your trusted provider and have a chat about what the product offers for you and how the Support Team can be of use for you.
This is the time to ask any tiny question around the product or the markets you always wanted to ask or just take the opportunity to have a personal guided tour around the platform. Although we are offering our products in a highly digitalized fashion we strongly believe that personal and human interaction are highly relevant. Check it out, it will be worth it!
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Richard started the Good Broker Guide in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously acting as multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.