Giving fifty-fifty is making money and sense for younger investors

Investing

Trade for Good is Australia’s first ASX trading platform that donates 50% of its brokerage to charitable causes.
Alistair Warren | Image source: Supplied

Trade for Good is Australia’s first ASX trading platform that donates 50% of its brokerage to charitable causes. Its CEO and co-founder explains its appeal to younger investors in particular.

    When Alistair Warren turned 50, he decided to take a different direction. He had spent the past 35 years involved in the operational and managerial side of broking, which gave him a strong understanding of the costs involved. He started toying with the idea of creating an online brokerage that gives 50% to charitable causes.

    “I wanted to create a vehicle that would drive a social impact and be a sustainable way for charities to raise money without the need for expensive marketing campaigns and so forth,” he says.

    Trade for Good launched at the start of the year and quickly signed up 250 retail clients, who began trading. But after a few months Warren realized how cost-intensive it was.

    “If you want to play in the retail space, you need a lot of capital,” he says. “There’s a couple of platforms out there who do an ultra-cheap $3 trade and $5 and trade, and they must be spending at least a million dollars a month in advertising.”

    Trade for Good has since pivoted to institutional clients and its first clients were Armytage Private in Melbourne and Pitcher Partners.

    Both its retail and institutional clients can choose which of the 30 partner charities the donation will go to. The charities comprise ten causes associated with helping “animals, humans and the environment.”

    “It means that every time you trade, we donate the money to say, Food Bank, and we do that collectively on your behalf,” explains Warren. “You get the tax receipt from Food Bank because there are the tax benefits from a donations point of view.”

    The 50% is donated by the trading platform after deducting clearing and ASX execution and clearing costs.

    First to market

    Warren knows of funds that donate around 10% of brokerage to charity, but so far as he is aware, no other broker in the world is giving as much as Trade for Good. His peers in the industry were initially incredulous when he told them of his plans to voluntarily give away half of what he could earn.

    “The first thing they said to me was ‘Why would you give away 50%? That’s stupid. Give away 10% or something.’ But it had to be 50%. Yes, we’re making money to keep the business open, but we’re also going to disrupt this industry and build something that makes a massive difference.”

    As well as educating existing investors about the alternative models available for the investments, Warren has faith that younger generations will need less convincing. He sees them as more socially aware, and thus more willing to pay a higher price if they know that will have a social impact.

    “We’re certainly out to make money, but we’re out to make money for charities as well,” he says.