Investec's Click & Invest (UK Robo) Shuts Down

(David Kent) #1

Sorry if this is the wrong forum but had to share this news.

As of today they have closed their doors, £12.8m spent after three/four years.

Their new CEO has a clear vision and it isn’t doing what they were before!

I wonder what will happen to the customers? Anyone used the service? Did they move you on?

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#2

The press release said they’ll move the customers investments over the next 90 days, the options are: sell and transfer to cash, transfer to another provider, or transfer out into own name. There won’t be any charges for this, plus they are suspending their Click & Invest fee.

Investec also said “…the appetite for investment services such as ours remains low and the market itself is growing at a much slower rate than expected.”. I don’t know what they actually offered or how it differs from Nutmeg, Wealthify, MoneyFarm etc but still interesting. Also wonder if this statement is meant in comparison to Investec’s other services rather than a comment on Robo Advisor services generally.

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(David Kent) #3

That is the big question for me as well. Is this a reflection on the market or simply Investec’s view of the world.

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#4

Their minimum investment was £10k. All the research has told me that HNW individuals are simply not comfortable handing over much of their assets to an algorithm and expect a more personalised and relationship based service.

When they key selling message of a platform is low cost, then inherently it becomes a volume play as robo advice is not a margin play and thus you need to target the mass market. A boutique play like Click & Invest with minimum £10k is not practical then.

Wealthfront, Betterment, Acorns on the USA and till some extent Nutmeg in the U.K. have shown that there is a market, although they struggle to make money as they haven’t hit critical mass yet.

Whether the market is growing fast enough? The Global Data survey did find an enduring and growing demand for robo-advice, with 40% of private wealth managers noting strong demand for the technology from their clients, more in the fast-growing Asia-Pacific region.

It feels to me that Investec just got their proposition wrong and is now blaming the market.

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(David Kent) #5

Ah I didn’t know that! No wonder they struggled.

Completely agree. Hopefully the media don’t use this as a chance to trample robos and starter investors.

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#6

I had another look into them. They revised this down to £2,500 in January 2019, the biggest plus was their fees were between 0.35% to 0.65% which is cheaper than the majority of other robo-advisors.

Nutmeg is the UK’s biggest robo-advisor, which has about 1.5 billion in assets under management (AUM), so it’s reasonable to assume the total AUM for UK robo-advisors is maybe 2x/3x this, so a few billion in AUM for the UK, it doesn’t seem like a section that has had explosive growth so far.

It will be very interesting to see more information when Nutmeg’s crowdfunding pitch goes live.

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(David Kent) #7

I wonder where it all went wrong then?

Nutmeg will be going live on CrowdCube so I’ll be able to ask my questions then. It’ll be interesting to get their take on what happened and why.

Maybe it was just poor management or they didn’t want to run a “lower-end” service?

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