HSBC has become the latest bank to roll out an online investment service with My Investment, an automated platform designed to make wealth management ‘advice’ accessible to those with as little as £1,000 to invest; it levies an initial charge of 0.5% followed by fees of up to 0.46%.
HSBC estimates My Investment could be used by 2.87 m of its existing retail customers, including many who may not have considered wealth management an option in the past.
Would-be investors answer a series of questions about their finances, investment experience and appetite to risk; My Investment then recommends one of five HSBC Global Strategy funds – Cautious, Conservative, Balanced, Dynamic, and Adventurous, which will invest in a range of asset types, such as shares, bonds and property in markets around the world.
The service is accessible via tablet, phone or computer, with a personalised investment portfolio available to clients within 25 minutes; users are required to have an HSBC current account and be registered for online banking.
In announcing its launch James Hewitson, Head of Wealth and Advice at HSBC UK, said: ‘Currently, 82% of our customers with investable balances show no evidence of having any previous investment experience – My Investment will help change that by providing the ultimate investment flexibility with online convenience.
82% of our customers with investable balances show no evidence of having any previous investment experience
‘It complements our existing wealth management telephone and face to face support, giving customers the ability to invest the way they want, when they want and get the best possible advice for their personal needs. The result is a service open to a much broader range of potential investors.’
Raman Bhatia, Head of Digital Bank at HSBC UK said: ‘The way our customers interact with us is changing and we need to ensure that we stay ahead of the curve.
‘More customers than ever are using mobile and internet banking with more than 90 per cent of our interactions with customers now done through our digital channels, so it’s the natural next step that we utilise the latest technology to give customers investment advice how they want it.’
Last November NatWest launched its robo advice service and in the following December it was revealed Nationwide would be testing a digital investment advice service in the Financial Conduct Authority’s regulatory sandbox.
we utilise the latest technology to give customers investment advice how they want it
HSBC had also taken part in the sandbox project while developing an app to help consumers manage their finances.
Patrick Connolly, a certified financial planner at Chase de Vere told FT Adviser: ‘We’re seeing a lot of these innovations entering the market from investment companies, banks and start-ups, and providing you answer their questions correctly you shouldn’t go far wrong.
‘However, they can only ask straightforward questions, they can’t probe, so clients are probably only going to get one-size-fits-all recommendations. They are no alternative to bespoke financial advice.’
Although usually bracketed under the moniker ‘robo advisor’, perhaps a better term for these services would be robo guidance; City watchdog, The FCA regulates ‘advice’ and ‘guidance’ differently, because under its rules advice relates to a personalised recommendation on what to do with your money, while guidance is a broader summary of the options available to you. Receiving only guidance means that you have far less protection if an investment turns sour.
However, robo advice offers a straightforward path into investing for those with a smaller cash pile who are overwhelmed by the options available and might choose not to invest as a result.