Robo advice hotting up: Wealthify cuts minimum investment to £1; Moneyfarm growing fast

Robo advice hotting up: Wealthify cuts minimum investment to £1; Moneyfarm growing fast

In a move to further its plans to democratise investment, robo advisor Wealthify has reduced its minimum investment requirement to £1 from £250, launched a new app to allow customers to track and manage their investments and has extended its lowest band tariff of 0.5% to investment of £50,000 or more.

Available on iOS and Android, the app also includes added security features such as fingerprint ID; the Cardiff-based start-up has also announced other changes to increase accessibility and transparency for customers.

In announcing these developments, Richard Theo, CEO of Wealthify, said: ‘These changes are important steps towards our mission to democratise investing and represent a genuine desire to be the most accessible, most transparent and most straightforward online investing service available.’

important steps towards our mission to democratise investing

The company’s charging will remain the same, with a maximum 0.7% per year management fees and 0.17% in fund charges.

Investments below £2,000 are put in a portfolio of around 15 passive mutual funds made up of 6,500 underlying investments; portfolios over £2,000 contains 20 funds, including ETFs and 8,000 investments.

Wealthify recently released its first year results with each of its risk managed investment portfolios outperforming its benchmark with returns ranging from 8.9% for its cautious portfolio to 28.5% for its adventurous –  Wealthify – Robo-investor Delivers up to 28.5% First Year Returns and Announces White Label Business

Meanwhile robo advisor Moneyfarm has seen 16% month-on-month average growth in its client base since it launched in the UK a year ago – 150% growth over the past 12 months, although the company does not reveal how many clients or assets under management it has.

Moneyfarm’s model portfolios all enjoyed positive performance ranging from 4.7% to 21.5% since the company’s UK launch; the company has doubled its number of employees at launch and now boasts an 80-strong team.

Moneyfarm, which was originally launched in Italy in 2012, announced investment from Allianz in September 2016 which would see the robo advisor make active funds available through automated advice at some point this year.

Elsewhere, NatWest has announced plans to launch a robo advice service later this year, the latest major name to target online investing.

the latest major name to target online investing

NatWest, which is owned by Royal Bank of Scotland (RBS) will shortly launch an online investing service called NatWest Invest, allowing people to invest directly with a minimum investment of £500; later this year it plans to expand its online investing to include robo advice, using risk-profiling questions to recommend investments to clients.

Les Matheson, chief executive of personal and business banking at RBS, said NatWest’s new investing service was responding to how consumers engage with the bank.

‘People are using digital services more and more; the majority of our main bank customers are banking with us either online or mobile,’ he said.

NatWest is one of a raft of UK banks who have signalled their intention to enter the robo advice market. At the start of last year Barclays, Lloyds and Santander all signalled an interest in the market.

The Financial Conduct Authority (FCA) and Treasury have encouraged entrants to robo-advice through the financial advice market review (FAMR) and a specialist robo advice unit at the regulator.

The FCA has so far accepted nine businesses to this unit, eight of which are ‘established firms’ in financial services.

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