Embedded finance fintech DriveWealth struck a partnership with investment platform Sproutfi to allow companies to service Latin Americans looking to invest in financial markets in the United States.
With the new partnership, accounts opened by Latin Americans through Sproutfi will be held at DriveWealth, which specializes in fractional equities trading technology.
The overarching goal is to make investments in U.S. markets more accessible to Latin Americans in a region where local markets and currencies are frequently subject to pronounced financial volatility.
The trend for overseas investments has been growing in large Latin American countries, where currency volatility has pushed domestic investors to options for diversifying country risk. The rising demand for global assets has led to an increase in providers offering access to foreign stocks.
Access for $1
On Sproutfi, local investors can gain access to U.S. markets with as little as $1. The company leverages DriveWealth’s fractional trading technology that allows clients to trade quantities of less than one full share of a company, making investments more widely accessible.
“The partnership empowers investors with the technology they need to invest in fractional shares of U.S. equities,” DriveWealth said in a press release.
The company noted that investing in U.S. markets used to be an “isolating experience” for Latin Americans.
To be sure, penetration of local investment products was already low in most countries, all the more so investing overseas. Research shows that above 50% of U.S. households have some level of investment in the U.S. stock market, while in the case of some countries in Latin America, that number can easily fall well below 10%.
“Investing was perceived to have been reserved for high-net-worth individuals with an in-depth understanding of the markets,” the company said. “While 46% of the population in Latin America do not have access to financial services, technology is driving financial inclusion in numerous ways.”
Access to 6,000 U.S. securities and ETFs
Latin Americans will now have access to over 6,000 U.S. securities and ETFs through the current partnership, making investing in the U.S. markets affordable and accessible. Additionally, it will also help investors with little or no experience with financial education, as many first-time investors are turning to social networks to learn about markets.
“We believe in the power of learning by doing here,” Bob Cortright, Founder and CEO of DriveWealth said. Both companies are “making it easy for communities to learn how to invest by removing the traditional barriers that have previously held them back,” he added.
“Thanks to this partnership, all investors in Latin America can easily access the technology they need to build long-term wealth in collaboration with their friends, family members, and online communities,” said Ruben Guerrero, Co-Founder and CEO of Sproutfi.
Founded in February 2021, Sproutfi is an investment company with operations throughout Latin America that allows investors to invest in U.S. stocks and ETFs through its U.S. broker affiliate Northbound Securities, with no minimum value required for the account no commissions.
It also works as a social network through which customers receive financial education content and share investment ideas.