The co-founder of UK classifieds site Gumtree, Simon Crookall and his sister Joanna have launched a new online robo advice platform aimed at providing a low cost service to investors with smaller sums.
InvestEngine charges 0.45% of assets held on the platform per annum and promises no further charges, which makes it one of the cheapest options in the automated investment space.
By way of comparison, UK robo pioneer Nutmeg charges between 0.45 – 0.75% p.a. on investments up to £100,000 and 0.25 – 0.35% above £100,000, plus fund costs of an average between 0.17 – 0.19%; Wealthify charges between 0.4 – 0.7% p.a. depending on the size of investment, with an average fund charge of 0.22%. See our comparison table here.
Joanna Crookall is chief executive of independent investment management firm Ramsey Crookall which is backing the venture; the company has over 70 years of relevant experience and has £1bn of assets under management.
InvestEngine has positioned itself as a competitive option for those with as little as £2,000 to invest in a bespoke portfolio
InvestEngine has positioned itself as a competitive option for those with as little as £2,000 to invest in a bespoke portfolio.
The new robo advisor claims to be the only automated investment manager in the UK to adopt a ‘buy and hold’ strategy intended for those investing for the long term approach; long time-horizons allow investors to ride out short term market volatility and take advantage of the fact that markets tend to rise over the long term.
The company says that holding stocks over a longer period of time regardless of variations in the market, is also a means to reducing the capacity for human error; its app is set to launch in the coming weeks.
In announcing its launch, Mr Crookall said: ‘After selling my tech businesses, I gravitated back to financial services and I could immediately see there was a real opportunity for a lower cost solution for people with smaller sums.
the only automated investment manager in the UK to adopt a ‘buy and hold’ strategy
‘Everyday people simply weren’t able to access the same level of money management as people with larger sums.’
Mr Crookall said InvestEngine gives investors a ‘regulated, low cost and easy solution’ for taking control of their own investment into high quality market trackers where all the hard work is done for them.
He said: ‘We deal with carefully selected exchange-traded funds combined with proven methodology and innovative technology tracking global markets to deliver diversified investment portfolios across countries and markets – essentially people don’t have all their eggs in one basket.’
It’s more for people who are unhappy with their current providers and are looking for profitable alternatives
Mr Crookall added: ‘The vision for InvestEngine is to become the ultimate destination for investors and savers.
‘Over time our offering will diversify and expand to include services like investment advice, pensions, ISAs, SME business accounts, current savings accounts, cash management tools as well as ethical investing options with truly green portfolios.’
During its on boarding process, investors are able to see their objectives, assess their risk tolerance and set the amount to invest – either as a lump sum, or via monthly instalments; the platform then selects a diversified portfolio of stocks, bonds and other assets accessed via a selection of exchange traded funds.
InvestEngine offers the choice between a General Investment Account and a tax-efficient ISA wrapper; despite the ‘robo advice’ tag (liked by the media more than the industry) the company does not offer advice – its service is discretionary investment management.
InvestEngine has eschewed the trend for digital wealth managers to trumpet the fact that they ‘democratising investment’ and targeting (cash-strapped) millennials; though low cost, Mr Crookall said he was not pitching the business towards a very young target market. ‘It’s more for people who are unhappy with their current providers and are looking for profitable alternatives,’ he said.