Lightyear Review: Illuminating Your Path to Financial Success

Lightyear is a new app-based investment platform. Standing out is difficult because there is already a lot of established competition. However, we discovered in our study of the Lightyear investing app that it offers a ton of features to draw in new users. High interest in idle capital, no fees, and a free multi-currency account will draw in both novice and seasoned investors.

Company Overview

Country of regulation UK, Estonia
US stock fee 0.1%, max $1 per trade
Inactivity fee charged No
Withdrawal fee $0
Minimum deposit $0
Available base currencies GBP, EUR, USD, HUF

Lightyear is an app for investment that was created in October 2020 in London to make investing more accessible to all. Martin Sokk and Mihkel Aamer, who were both employed at the fintech company Wise, which specializes in cross-border payments, are its founders. Even though Lightyear is very young, it already has many well-known investors, including Sir Richard Branson, the co-founder of Skype, Wise’s co-founder, and a former president of Robinhood.

Pros and Cons

Pros Cons
  • Awesome mobile app
  • Can also use their website (web app)
  • Low trading fees
  • Very low cost overall
  • Multi-currency account
  • Great interest rate on uninvested cash
  • Not commission-free
  • No Stocks & Shares ISA
  • No personal pension
  • No live chat support

Is Lightyear Good For Newcomers?

Yes. That is if you wish to decide for yourself what investments you want to make, such as trading stocks and shares and other financial instruments.

Lightyear is probably not for you if you’re looking for professionals to handle your investments and grow your money over time. 

It might be ideal for you if you’re new to stock trading and eager to purchase and sell shares on your own, taking full control of the process.

Starting with little initial investment, you should be able to grow your money more quickly than on platforms like Hargreaves Lansdown which have significantly higher trading fees due to the cheap expenses. 

LightYear Account opening

The only type of account you can open with Lightyear is a General Investment Account. In terms of tax-free savings, it’s a simple account, but that’s alright because you only have to pay taxes on the £6,000 in annual profit you make from your investments if you decide to sell them.

LightYear Product Offerings

In general, the selection of investment options on Lightyear is impressive, encompassing a diverse array of both stocks and shares as well as ETFs (exchange-traded funds).

Stocks and Shares

Stocks and shares represent ownership stakes in companies and are traded on global stock exchanges. Lightyear offers access to over 2,000 US stocks, including well-known companies such as Tesla, Apple, Google, Alibaba, Baidu, major banks like HSBC, and even sports giants like Manchester United.

For those interested in UK investments, Lightyear features a robust portfolio of just over 200 UK stocks, with new additions regularly introduced. It’s important to note that while larger companies are well-represented, smaller companies listed on the AIM (Alternative Investment Market) may not be as extensively covered.

A notable feature of Lightyear is its continuous expansion of available stocks and shares, ensuring users have access to an evolving market.

Fractional Shares

Lightyear also allows trading in fractional shares for US stocks. This means investors can purchase a fraction of a single share, making it feasible for those with smaller account balances to invest in high-value shares. For example, if a Netflix share is priced at $600, investors can buy a portion of it, say $100, and receive 1/6th of a Netflix share in return.

It’s essential to keep in mind that when dealing with fractional shares on Lightyear, purchases are made at the prevailing market price, without the option to set a future purchase price through a limit order, a characteristic consistent across most investment platforms offering fractional shares.

ETFs

In addition to individual stocks, Lightyear offers an adequate selection of ETFs, or exchange-traded funds. These funds bundle various investments, such as stocks and shares, into a single, easily tradable investment vehicle, making them popular among investors for their convenience and cost-effectiveness.

Currently, Lightyear provides access to over 200 ETFs, covering a broad spectrum of options. This includes key index funds like those tracking the top 100 UK companies (FTSE 100) or the top 500 US companies (S&P 500). There are also ETFs focused on dividends (companies distributing profits to shareholders) and others concentrated on specific sectors like real estate.

Importantly, when purchasing ETFs on Lightyear, users enjoy the advantage of zero Lightyear fees. However, it’s essential to be aware that fees may still apply within the ETF itself, a standard occurrence regardless of the investment app used to buy ETFs.

Lightyear Fees

Lightyear distinguishes itself as a highly cost-effective platform, offering users the advantage of fee-free account opening and cash deposits (except when depositing via card), and withdrawals are also exempt from charges. The sole fees users encounter are associated with investment transactions, commonly known as trading fees.

Trading Fees

These fees are incurred with each investment transaction, prompting users to exercise caution, particularly when dealing with smaller amounts, such as a £20 investment.

Currency Conversion Fee

The only fee users encounter in this category is the currency conversion fee, which comes into play when converting currencies for the acquisition of foreign stocks, such as US or European stocks. This fee is fixed at 0.35%. To illustrate, converting £100 to Dollars incurs a mere £0.35 in fees, making it a notably cost-effective option.

Comparatively, when assessing currency exchange fees offered by other brokers and investment apps, Lightyear’s 0.35% currency conversion fee stands out as highly economical.

Fast Deposit Fees

For users seeking swift fund additions via card transactions, Lightyear offers a “fast deposit” option, subject to a 0.5% fee. Notably, the initial £500 deposited through this method is exempt from charges, providing users with a cost-free entry point for expedited fund transfers.

Is Lightyear Regulated?

The Lightyear investment app operates under regulatory oversight in two jurisdictions: the UK and the EU. In the European Union, Lightyear is subject to regulation by the Estonian Financial Supervision Authority (EFSA). 

In the UK, Lightyear has engaged an appointed representative, RiskSave Technologies, to provide support and supervision for activities regulated by the Financial Conduct Authority (FCA). It’s important to note that Lightyear is currently awaiting full FCA approval.

This strategic approach, commonly employed by newer providers, aims to expedite the company’s entry into the market. While Lightyear has initiated the application process for official FCA approval, the inherent time-consuming nature of this process might explain the interim utilization of the appointed representative route.

Customer Service

Overall, the customer service is good.

The website and app provide an excellent help center that covers almost all aspects of your account, including dividends, taxes, and how to buy and sell investments.

You can also email help if you can’t locate what you’re searching for, and they will respond rather quickly.

Alternative To Lightyear

Lightyear is obviously a good broker. But, before making any final decision, you need to compare this broker with two of the other brokers.

Lightyear IG Index Pepperstone
Rating 4.5 4.4 4.8
Markets Stocks Forex, Stocks, Commodities Forex, Stocks, Commodities, Crypto
Minimum Deposit $1 $0 $0
Minimum Trade $1 0.01 Lots 0.01 Lots
Demo Account No Yes Yes
Regulators FSA FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB
Bonus
Education No Yes Yes
Platforms MT4 MT4, MT5, cTrader
Leverage 1:30 (Retail), 1:222 (Pro) 1:30 (Retail), 1:500 (Pro)

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Final Thought

Although Lightyear is still in its early stages, it’s already a fantastic investing software. It focuses on current popular desires. Somewhere to make a profit on their investment. Furthermore, fee-free ETFs are hard to disagree with for the long-term investor.

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