Investec is to close its robo-advice service, Click & Invest, just two years after it launched.
The business, created by investment giant Investec, said appetite for the service “remains low” and that the market is growing at a slower rate than it had expected.
Investec is writing to customers who use the service to start a process to move their investments elsewhere over the next 90 days. They will have the option to sell their investments and withdraw their money in cash or to transfer to another provider. Investec says clients will not be charged for moving or withdrawing their money and that management fees have been suspended.
Click & Invest launched in 2017, joining the likes of Nutmeg, Wealthify and Moneyfarm in the competitive robo-advice industry. These websites aim to provide a low-cost, simple investment service to investors.
While it has been estimated that investors hold around £5bn of assets on such websites, some commentators say that demand has not been nearly as strong as expected. Holly Mackay, founder of money advice site Boring Money, said: “I think the real problem is that people are not looking for online investment products, they are looking for someone to talk to who will tell them what to do. So, we can keep launching robo-advisers until we’re blue in the face but that doesn’t solve the problem of the advice gap.”
Click & Invest had a minimum investment requirement of £10,000, putting it out of the reach of many newbie investors, but cut this to £2,500 in January. Rivals such as Moneybox, Plum and Wealthify allow users to start investing with as little as £1. UBS’s SmartWealth had a £15,000 minimum investment level but it closed in August 2018, just two years after launching.
Click & Invest had relatively competitive fees compared to rivals. Its charges range from 0.35% to 0.65% depending on what level of service users opted for. Charges on ETFmatic, meanwhile, range from 0.12% to 0.48% and IG Smart Portfolio users pay between 0.1% and 0.65%.
Mackay added: “[Click & Invest] is a business that is closing not because of the quality of its offering, but because of a lack of demand.”
Investec said: “We fully appreciate that this announcement will be of real sadness to both clients and staff of Investec Click & Invest. Our prime concerns from this point are to minimise disruption for clients and ensure that employees are treated with respect and fairness.”
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