In response to a recent survey more than half of direct to consumer (D2C) investment platform and robo advice bosses believe that assets held by retail investors in the UK will mushroom by more than £100bn in the next five years.
DIY investment platforms such as execution only brokers currently hold £209bn of assets on behalf of investors comfortable making their own individual investment decisions and the automated investment platforms – the relatively nascent robo advisors – add a further £2.3bn, around half of which is held by pioneer Nutmeg.
People are increasingly taking control of their finances as self-reliance replaces state support; Muckle is committed to encouraging the movement toward financial independence and believes that improved financial education is the key.
People are increasingly taking control of their finances as self-reliance replaces state support
The research conducted by Boring Money canvassed 17 D2C platform and robo advice CEOs and directors and found 10 of them (59%) expected growth in the UK space to grow by more than £100bn, while one-third (36%) believed the sector would see more modest growth of between £40bn and £100bn.
Boring Money said that it expects the total UK DIY digital wealth market to grow by £170bn over the next five years; when asked their expectations for the DIY investing market across Europe, more than 60% of the UK bosses believed the robo advice market will be worth more than £1trn by 2025.
Boring Money founder Holly Mackay said ‘Although robo-advisers retain a tiny market share today, we think that Robo Mark 2 has the potential to accelerate growth. The focus will shift from the provision of online decision trees leading consumers to a pre-packaged portfolio, and move more towards advice.
‘If the banks and life companies can crack this space, this will also fuel growth. But that’s a big ‘if’. They are typically slow and hamstrung by committee-think so this needs to be a story of specialist partnerships and collaboration rather than a solitary offence as in the past.’
Natwest, HSBC, Nationwide and Standard Life’s advice arm 1825 have each developed or are currently developing robo advice solutions.