Investec Wealth & Investment (IW&I), part of the Investec Group that currently manages over £150 billion (c.$191bn) in funds for clients globally, has launched a new actively managed online investment service ‘Click & Invest’ for individuals in the UK with £10,000 (c.$12,735) or more to invest, aiming to make investing as “straightforward and transparent” as possible.
As for the rationale to the platform being launched now, Investec, which sponsors a number of leading sporting events including The Derby at Epsom Downs, is understood to have developed it from scratch and they did not want to initiate the launch until it had been thoroughly tested.
Investec Click & Invest, authorised and regulated by the Financial Conduct Authority (FCA) in the UK, touted the newly launched platform as offering and combining the experience of a team of investment managers with the “convenience and ease of an online service”, opening the door for individuals who would not usually be able to access traditional wealth management services. Indeed, the service is being couched in terms of appealing to a wide range of investors – from novices to the more experienced.
A team of investment managers create and actively manage investment portfolios on behalf of clients, which are based on over 300 actively managed funds that are chosen “using strict criteria” from the whole of the investment market. The funds are assessed and reviewed on a monthly basis with the “aim of outperforming the market.”
Jane Warren, Chief Executive of Investec Click & Invest, commenting in the wake of the launch said: “Investec Click & Invest is uniquely placed as an online investment service, which is based on the same principles and expertise offered by Investec Wealth & Investment.”
She added: “The service is simple, intuitive and transparent, offering clients the convenience and ease of an online service, with the knowledge that their money is being actively managed by our team of experts – not algorithms.”
Filling A Gap
As to where Investec sees this new offering filling a gap or a need for investors, the protagonists behind Click & Invest asserted that it has the benefit of the strength and security of the Investec brand, Investec Wealth & Investment’s 180 years of investment expertise. And, it provides active management, rather than a service relying on algorithms and passive funds.
Investec Click & Invest’s model levies one annual management fee, which is tiered according to the level of investment. Individuals are not charged for setting up and creating a portfolio, commission, transferring in, withdrawing money or closing an account. As with other services there are underlying costs, which are applied by the individual funds.
The fees charged to clients for Click & Invest are set at 0.65% on the first £100,000 invested, 0.50% on the next £150,000 that are invested and thereafter 0.35% on any amounts invested over £250,000.
So how competitive exactly are these tariffs from Investec versus the rest of the market? Well, according to David Black, an independent researcher and personal finance expert: “Having analysed twenty of the robo-platforms’ websites it is apparent that there is a wide variation in what is available in terms of type of service offered, ease of navigation, charges, active or passive investment styles, fund selection options and crucially the method of assessing investor risk appetite.”
He added: “Investec’s Click & Invest is one of the robo market leaders in terms of its risk profiling methodology and impressively it also reassesses the risk profiling of each investor every year and it offers genuine 24/7 customer service. Its fund selections are primarily active – rather than passive – and its annual charges are very competitive in this sector.”
A thorough application process has been designed in conjunction with Investec’s Investment Management team and Chicago-based investment research firm Morningstar to ensure an individual’s attitude to risk, capacity to absorb financial losses and investment goals are determined before placing them in one of five different risk-based investment strategies. These strategies are namely: (1) Defensive; (2) Cautious; (3) Measured; (4) Adventurous; and, (5) Aggressive.
Clients of Investec Click & Invest have visibility of the funds in their portfolio so they can see where their money is invested. They also receive monthly video updates from their investment managers about how their portfolio is performing and any changes that have been made on their behalf.
According to a competitor analysis of wealth management platforms recently authored by David Black, in relation to the newly launched service from the Investec stable (Click & Invest) that is offering simplified advice for ISAs and general investment accounts, he stated it was ”one of the leaders for risk profiling and it also reviews each investors’ attitudes to investing annually.” The firm is also offering 24/7 telephone support.
The 30-page study, which looked a range of providers, concluded that this is “an evolving industry with an ongoing flow of new entrants” to an extent, added that “Simplified tariffs are likely to be the future for those targeting the mass market non-HNW sector catered for by IFAs.” But there was “still much to do” the study pointed out.
Examining 23 providers in the space including the likes of Barclays Stockbrokers, Charles Stanley, Fidelity and Vanguard across 47 key parameters, it was also noted that there were “major differences” between the individual risk profiling tools from providers, to choose the optimum readymade portfolio.
“Some were incredibly basic…most were basic, and there was a huge gap to the highly impressive risk profiling of Click&Invest, eVestor and Wealth Horizon,” the document stated.
It concluded: “Robot-advice has a definite place in the market and will undoubtedly plug the gap of the mass segments who aren’t really being targeted by Independent Financial Advisers (IFAs).”
Services offered by IW&I in the UK include: Discretionary and advisory investment management; Fully comprehensive financial planning capability; UK and international multi-currency investment portfolios; Tax, pension, ISA, estate and succession planning; and, Onshore and offshore capabilities.
As part of the Investec Group, IW&I, which had around £32.5bn of client funds under management as of March 31 2017, offers wealth management and investment services to private individuals, charities, trusts, international clients and financial advisers. The firm has some 1,200 staff located at its fifteen offices across the UK.