As the wealth management market sees new competition growing year on year, existing providers are starting to feel the heat. With investors having differing expectations on how they view the balance of simplicity, yield and ethical investing, new models are emerging to help with these aspirations. The size of the prize is extensive for those organisations that play to these needs. The overall global wealth management market in 2019 was valued at $486.78 billion (The Business Research Company, July 2020), and is forecast to grow to $585 billion by 2023, despite the challenges we have seen from COVID. This impressive rate of growth will be fuelled by several factors; an aging population preparing for retirement, a new generation of high-net-worth individuals looking for better yields and investment opportunities, and fintech’s opening-up new investment vehicles that can be accessible to a wider number of consumers that may not be comfortable with institutional wealth manager.
Additionally, trends in techno-data advancement in the form of robo-advisory is also taking up a larger share of the market when it comes to less complex portfolios, which increases the market potential, creating both challenges and opportunities for existing wealth managers. Changes in pricing and commission structures which are made more transparent to investors, also opens the market for new tech-savvy consumers with smaller amounts to invest or save. Also, as sustainability becomes a key feature of nearly every business conversation, focus has also shifted to more ethical decision making when it comes to looking at the balance of yield and planetary damage.
These trends have become key cornerstones for new entrants to the market, and emergent strategies can give incumbents a lot of food for thought. To help decipher which strategies are important to note, five new (ish) entrants are examined to shed some light on key lessons to be learned.
5 New Wealth Management players
Purpose of the company
How it helps Investors
Features & Benefits
Wealthify was set-up in 2014 with the simple aim of helping people achieve more with their savings and making the process simple and transparent.
Looking support more entry level customers, with lower levels of funds to invest
Offering is simplified so potential investors can select the right combinations for them
• Easy to use platform
• Pricing transparency, which is easy to understand
• Backed by Aviva for those investors looking for the backing of an established brand, but liking the flexibility of a fintech
• Access to ethical investment strategies
Established in 2011, nutmeg is the UK’s first online discretionary investment management company. It was founded industry veterans Nick Hungerford and William Todd, who had become dissatisfied with what traditional wealth management providers were offering to investors. The aim of the company was to do “less pretending on relationship management”, and focus on offering simple, jargon free, and accessible advice on wealth
East access to pre created portfolio based on investment needs
Simple and fast account opening process
• Comprehensive services offered across savings, retirement and investments
• Access to calculators and useful tools to determine growth and yield
• Easy to understand pricing and commission structures
Good range of entry level investment options
eToro was launched in 2007 and was one of the very first fintech’s to start operating in the wealth management space. Its mission is clear, which is to be able to open-up the world of investing to anyone, anywhere and therefore reduce the reliance on traditional player in this area
Making simple investing solutions easy to understand, and benefit from
Feature rich solution for new investors looking at cryptocurrency
• Continually innovating since 2007
• Comprehensive suite of services including FX trading, web-trading for financial assets, social trading through CopyTrader, mobile trading, and more recently cryptocurrencies
• Attractive and transparent pricing structure
Founded in Milan in 2012, Moneyfarm has expanded across Europe, and the platform now manages over £1 billion. Again, similar to others, started up with the aim of making investing simple and enable to easy-to-use technology and channel.
Great for investor who are starting on their journey ad want to keep their options open - no exit fees, and no expensive lock-ins.
• Unlike other providers there is access to personal advice
• Combining human expertise and leading-edge technology to delivery tailored investment strategies
• Simple T&Cs and pricing with a single fee model
• Backed by some industry heavyweights; Allianz Global Investors, Cabot Square Capital, United Ventures, and Poste Italiane
Founded in 2015 by close friends and entrepreneurs, Ben Stanway and Charlie Mortimer. The rationale behind setting up moneybox was their philosophy that everyone needed to be supported in saving and investing for their future. Everyone needed more options for this help beyond traditional wealth management providers
Adding several useful services that surround the investing process to help decision making
Simple easy to apply offering
• In addition to investment services, availability of loyalty scheme across several retailers
• Bespoke calculators to support macro life moments like saving for a home, or retirement
• Simple and easy to use mobile app and interface, with compelling multi-channel support
Key Takeout’s & Considerations : What makes a good wealth offering ?
Easy and clear offerings that help the investment decision making process
Ease of account opening, using digital technology to make this pain-free and fast
Transparency of pricing and overall terms and conditions
Ability to access a number of services under one roof
Common experience, look and feel, across all channels
Ability to offer more than just products e.g. ethical investing as well as loyalty
Having offerings that are inclusive, and to cater for both smaller and larger investors, and differing levels of risk appetite
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