A new investment platform targeting the “ordinary” person looking to invest smaller amounts of money has been launched by the co-founder of the classifieds site Gumtree.
Simon Crookall, who founded Gumtree alongside Michael Pennington in 2000, and his sister Joanna Crookall, managing director of investment firm Ramsey Crookall, created InvestEngine to manage the portfolios of people with as little as £ 2,000 to invest.
Crookall said fairness and accessibility are at the heart of the business and he launched it after finding that “everyday people just weren’t able to access the same level of money management than those with larger sums.
Investors can save as little as £ 2,000 with InvestEngine through its website-based platform
What does InvestEngine offer?
InvestEngine is a new online investment platform for those looking to invest a minimum of £ 2,000.
Like many other robo-advisers, InvestEngine offers simplified advice by assessing a client’s personal situation – their goals, investor profile, investment schedule and risk tolerance – then uses an algorithm to determine the most suitable portfolio using a mix of ETFs.
Portfolios differ according to their weighting in stocks, bonds and alternatives, with the prudent investor the most heavily weighted in bonds and the adventurer in stocks.
All portfolios will be monitored by the Company on an ongoing basis and rebalanced as and when necessary.
Investors have the choice of a general investment account or a stock and equity Isa and can supplement their portfolio with monthly payments.
The platform charges a fixed fee of 0.45% per annum, although investors should keep in mind that an average of 0.17% is also charged for each fund with another 0.04% for the market gap.
This means that there is an average total load of 0.66 percent per year.
Do robo-advisers have a future?
Asset management firm Investec announced last week that it had decided to shut down its Click and Invest robo-consulting business after two years of losses.
This is not the only one – all online investing platforms have struggled to make a profit.
Many have expressed concern about the viability of robo-consulting businesses, especially the amount of money spent on acquiring new customers and ineffective advertising strategies.
Mark Stokes, group communications director, wealth management firm Succession Wealth, said: “We have discovered in talking to our clients that they value the people side of wealth advice, they want to s. ” sit down or talk to a professional about their financial goals and aspirations before approving an investment strategy.
“Some online wealth advisers have recognized this value and have since revised their business model to accommodate a ‘human advice’ service, albeit over the phone or email.
“It remains to be seen whether“ robo-advice ”has a future or not. We can see a move towards consolidation in this space as companies look to save costs. The continued investment in technology to enable traditional advisors to deliver some type of direct proposition to the consumer is inevitable. ‘
Meanwhile, eToro removed its commission fees earlier this month for clients who buy or sell stocks and ETFs on its platform.
Iqbal Gandham, UK Managing Director of eToro, said: “We want more people to invest. Research shows that there is a huge difference in the costs charged by providers for investing in stocks.
“We have seen a more in-depth look at fund fees, but not yet the same awareness of the excessive fees that some providers charge for stocks.”
The service is currently online only but aims to launch an app in the coming weeks.
How does it compare?
A multitude of online investment firms have sprung up in recent years offering to help you choose and manage a portfolio, achieve your financial goals and earn money, all for a “small” fee. .
These are largely defined under the umbrella term “robo-advisers” and almost always provide investors with a model portfolio consisting of a number of low cost tracking funds.
With an annual fee of 0.45%, InvestEngine sits at the bottom of the cost scale, with Nutmeg and Scalable Capital charging 0.75%. MoneyFarm charges 0.7 percent on amounts up to £ 20,000, which ultimately reduces to 0.4 percent, but only on investments of £ 500,001 or more.
There are no transaction or setup fees, and getting started is relatively straightforward. Customers simply answer a few questions through the online survey before being offered a portfolio.
Like many other robots, InvestEngine trades exclusively on ETFs.
Currently it is an Isa account or a general investment account, but he hopes to diversify and expand his services to include investment advice, pensions, business accounts for SMEs, business accounts. current savings, cash management tools as well as ethical investment options.
Should you invest through a “robot”?
The advantage is that it is quick and convenient. Robo-advice comes from companies operating online, most of which also have apps, so individuals can access investment opportunities anywhere, anytime, day or night.
They save the time and hassle of finding and consulting with a financial advisor, who will examine them on all aspects of their financial affairs to develop a tailored investment strategy as part of a detailed financial plan. And as mentioned above, it is inexpensive compared to traditional face-to-face advice and active investment management.
However, it’s important to note that not all proposals that fall under the robo-advisor category offer financial advice.
Some only have discretionary investment management permissions, which means they buy and sell investments on behalf of clients.
They don’t make personal recommendations. This means that the investment strategy might not be the most suitable for you and you might be better off with a different strategy.
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