Alice Kahrmann talks to Yoni Assia, CEO of eToro, the world’s largest social investment platform.

It’s a Tuesday when I’m wandering through Waterloo Station. There it is, the advertisement that stops you in your tracks, a barrister, complete with wig and er, bull horns stares assertively into camera, ruminating on the best possible strategy with regard to investing her hard earned cash. But what if this highly educated, competent (in all areas) high flier struggles when faced with the buying and selling of shares? Why not imbue herself with a decidedly bullish outlook and copy someone who knows how? It’s the go-to strategy of self help experts the world over, Tony Robbins for one expounds the theory of modelling; taking an individual you deem successful, analysing what they do and then mirroring to your heart’s content. But what if there was a platform, a social/financial matrix where experts listed their trades and offered followers the chance to do the same?

It’s a quite staggering paradigm shift in the world of finance, and disruptive innovation is founder Yoni Assia’s mission statement. At eToro, why not flout the modus operandi of an industry heavily invested in keeping a wall of smoke and mirrors between the ‘advisers’, stockbrokers and fund managers with their prohibitively complex dialect of financial jargon and those who may have the instinct, the nose, but not the skill set or experience. Oh what a way to queue jump.

No surprise the service already has 4.5 million users and growing. No doubt also Assia is seriously sharp, a mile a minute talker, funny too, "If it’s directly competing in the same business I would advise them not to do it!" he says when asked to dole out pertinent advice to next gen startups.

So here we are having a natter (on Skype) me in London, Yoni in Israel, where surprise surprise, all the best startups hail from (more of this later). "We took the entire company to see The Big Short recently," he says (extremely fast), "There’s a quote in there (I’ll remove the curse words) ‘Wall Street has always made things complicated and complex for normal people to understand so they’ll pay the fees’ [haven’t they just]. Finance 1.0 or traditional finance is very much a closed industry."

Assia has seen close up how invested banks are in keeping the average punter out. "One of the biggest banks in the world, they have wealth management services, you need to have at least a million dollars to trade shares with them… I asked ‘Do you have a mobile app?’ and they said ‘ Listen we have something that is very bad, like an old mobile app, but the problem is none of the advisers are willing to give it to their clients because they don't want the clients to understand they can actually make decisions on their own. Because then why would they pay the adviser?" Point made.

Assia has been a trader since he was thirteen. "I love the capital markets," he smiles as he reminisces. "For me, to be able to trade UK and US shares, it’s part of being a global citizen. I buy a share and then I see it on the Nasdaq, that’s one of the things that impacted me, but I found it really difficult to communicate with a lot of people on it, because it’s not a regular person’s hobby. I couldn’t speak to anyone in high school about it. For me back then it was: I hope one day I’ll work in a place like Goldman and have a thousand people around me telling me what’s going on in the market, connected to every big city in the world. That’s the idea behind eToro, to build this for everyone. To be able to see (for everyone) what the finance geeks are doing and follow them."

There’s something of the finance geek to Assia himself, though (speaking of Moneyball) closer to the Brad Pitt end of the spectrum than the wig bearing Christian Bale. The luminous grin, the wire framed glasses, the glowing tan. It’s funny interviewing entrepreneurs, you get a vibe, even on Skype, Assia’s charisma reaches through the screen and shakes you about a bit, a potent tool backed with wit, stats and intent.

"You don’t have to be a City boy to be someone who’s smart about how they manage their money," he says. "If you’re smart about managing your money, you can have a second income by having people copy you. You don’t need to go to the big rooms - that you’re paying for, you can actually find them on the internet, they can come from everywhere and nowhere." Further, Assia is all about facilitating "a level of transparency that never existed. You can see whatever people are doing, their entire history of trades, a three year track record." If you asked your adviser ‘What are you doing in your own private fund?’ He’d answer how is that your business? You say ‘I want to talk to other clients of yours’ he’ll say ‘You can’t.’ In fact it’s anathema to Assia that in today’s internet age things aren’t more open.

Just last year eToro handled over 400,000 ‘copy actions’, "That means 400,000 people replaced their money manager on eToro," he says. The speed and pace of things that’s "a hundred times faster than traditional finance." Lower risk, smaller sums, copy a trade for less than £100 if you want to, maximise smaller bites at the cherry at a sizeably lower risk. The web platform also offers users ‘advanced discovery’: search for exactly the kind of trader you want. "Say I’m looking for people in the UK trading shares in the UK, who had gains of at least 10% last year," Assia explains. "You would then drill down and look at two main things, the performance of gains and the risk. How consistent are the gains? Some people are looking for someone who made 50% last year, but if they did, I would say it’s possible they could also lose 50% in one year."

With regard to the future, what does Assia see in his crystal ball, for the industry? "The user experience is shifting towards a much simpler consumer experience, everything is now shifting into mobile. Make sure you find an added value service that’s global, moving from local regional institutions to global solutions and products. Thirty years ago everything was local goods, interestingly enough with finance, it’s still sort of stuck in the past, local banks, local advisers and local bonds.' There's also the adviser handed down by parents, with their sticky gum like residue so difficult to shift. "In some places, the UK for example. everyone is using Facebook and Google and Skype but in thirty years, everyone will be using the same financial services offered through the internet."

"How do you communicate the fee structure of what you’re paying for?" he continues, impassioned by the topic. "Added value, and how much you pay for that added value? In the past most financial service companies were extremely asymmetric. Which quite ironically means the richest people are paying the least commissions. Most communication is one on one, and most fees are hidden. People are under the assumption that no one is supposed to talk about it, just as no one talks about their mortgage, no one talks about their loan rates, or the fees in their broker account, and that allows financial institutions to price differently for everyone. A big part of Finance 2.0 is about fair and similar pricing for everyone."

But what of the man behind the mission statement? Who inspired him? "For most of his career, my grandfather was in Switzerland, he opened a bank which is today one of the largest banks in Israel. A lot of my passion with regard to finance comes from learning from what he did in the 60s and 70s. He had a book with this quote on the front, ’If what you want to do in life is make money, then don’t deal with industries and lightbulbs and factories, then just deal directly with money’. It’s not necessarily a politically correct quote, but that’s the passion you need with finance and capital markets."

Assia’s father was also an entrepreneur, "He established the first software company in Israel that listed on Nasdaq called Magic Software. The reason I started trading when I was thirteen was because he gave me shares for my bar mitzvah." Shares in a company which was publicly traded on the Tel Aviv Stock Exchange. Unlike Assia’s brother and sister who "kept them over years and years", Assia asked for a Power of Attorney to get an account and started buying and selling. An interest in technology ran alongside the constant comms with his father in business, resulting in "the convergence that’s happening today with finance and technology." 10,000 hours at least (thank you Malcolm Gladwell); 5k in finance and 5 in tech and there you have it, the consummate Fintech entrepreneur.

"Since I’m Israeli I’m not going to be politically correct," Assia says when asked to pin down why Isareli startups (alongside Scandinavian firms) are dominating the landscape. "The single’ [most pertinent] characteristic of Israelis is that they are extremely direct and opinionated. Jerry Seinfeld was recently in Israel and he said ‘I can’t believe it, there are only two answers to anything I ask, either ‘It’s impossible no!’ Or it’s a great idea let’s do it!’ There’s nothing in the middle." he laughs.

"The Israeli process doesn’t follow an organised hierarchy. Perhaps it’s because we’re all going into the army at an early age. There’s a joke where the employer says ‘Please finish A< BY>Z’. He would say, ‘It’s better than what you’ve asked’. It’s a very interesting culture that creates a lot of entrepreneurship and innovation." Isn't it just?

We end on Assia’s favourite quote, "#Something is always better than nothing.' Always make decisions, always progress, always do something," he says with aplomb. To which I would say, ‘It’s a great idea, let’s do it!’

April 2016