Interactive Investor

Digital wealth manager Investec Click & Invest shuts down

16th May 2019 08:39

Edmund Greaves from interactive investor

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Digital wealth management provider Investec Click & Invest is to shut down and has closed to new clients from today.

The firm, backed by major asset and wealth manager Investec, cites a lack of appetite for its investment services.

It adds that the digital wealth management market is growing at a “much slower rate than expected". 

The firm says it wants to minimise disruption for clients and employees. Investec has contacted clients today in order to help them move investments elsewhere.

The company says this will take place in the next 90 days. Clients will shortly receive an information pack in the post to explain their options, which will include:

  • Selling investments and withdrawing money in cash (an option already available to clients)
  • Transfer to another provider either in cash or investments if the new provider is able to accept
  • Transfer out in their own name

The firm says it will not charge clients for carrying out any of the above options and the management fees have been suspended.

Until the firm closes, it says it will continue to manage its clients' investments.

Investec Click & Invest first launched in 2017 with a minimum initial investment level of £10,000. However, this was slashed to £2,500 in January this year.

It positioned itself within the so-called 'robo-advice' market as the actively managed option with expertise from its parent company to draw upon.

It says that employees affected by the firm's closure will enter a consultation process in the next few days.

Moneywise has asked Investec Click & Invest how many clients are affected, but it has declined to comment.

What's the deal with robo-advisers?

The closure of Investec Click & Invest has come at a time when the number of so-called 'robo-adivce' firms has exploded.

But it is unclear how much impact they have had on the investment industry in the UK. 

Platform research firm the lang cat estimates the robo-advice market to be less than £5bn in assets under administration.

Compare this to the two biggest players in direct investments - Hargreaves Lansdown, with over £85 billion, or interactive investor (Moneywise's parent company) with around £20 billion - and the amount a multitude of robo firms is looking after pales in comparison.

Mark Polson, founder of the lang cat comments: "The British public have had several years to indicate how favourable they are with big brand and little brand robo-advice and no one has really gone for it. It is unclear what robo-advisers are disrupting.

"I know some direct investment platforms are fully priced, but they also work quite well. Its not like the investment platform market is really broken.

"Robo is in a tough spot and the best chance is for those who have some kind of diversification in their business. For instance, Nutmeg is doing institutional work and pension flows, which is slow but interesting.

"Others such as Open money and Evestor are two sides of the same business. I like them because they have other forms of revenue than just providing a basket of ETFs. And providers like Scalable Capital have presence in other markets too, such as Germany and other European countries.

"New robo brands launch every week. It’s hard to tell who they are chasing. And it’s really telling that big brands are closing."

This article was originally published in our sister magazine Moneywise, which ceased publication in August 2020.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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