Two weeks ago I wrote about a new advised online investment proposition that falls far short of what I understand the required standard to be. This week I am looking at the complete reverse: a non-advice service that is well structured, user-friendly and goes above and beyond what one would expect.
It is called Wealthify and has been built by a team with strong financial services and technology credentials. These comprise a chartered wealth manager, the chief executive of a boutique asset management business and a successful technology entrepreneur who has previously built protection comparison services for some of the largest UK aggregators.
On entering the service users are asked if they wish to invest in a “regular” plan or an Isa. After selecting their preference they are asked to create a plan. This process begins by asking if the user has a goal in mind. A number of standard goals are listed, such as retirement, a new house or a dream holiday, together with the option to create bespoke goals. Users identify how much they want to save as a lump sum (minimum £250) or on a monthly basis (minimum £20), how long they wish to invest for and their perception of their investment style, from cautious to adventurous on a scale of one to five.
As this information is input a projection of the future value of the fund is displayed. This includes a graphic to demonstrate the risk of underperformance. From this, the user can then click “see your plan”. This presents a summary of the plan, including the goal, the amount to be invested, and if the funds are in an Isa. It also shows the total amount invested over the period, the annual fee in percentage terms, what that will be as a monthly cost in cash terms and the predicted fund at the end of the investment period.
Wealthify’s fees are 0.7 per cent per year for accounts up to £15,000, reducing to 0.6 per cent for accounts up to £100,000 and 0.5 per cent above this. Fund charges are between 0.08 per cent and 0.2 per cent depending on the fund. The fund charges are not currently shown in the summary, which is one point I think could be improved, although they are clearly disclosed in the frequently asked questions.
As soon as you click to read the customer agreement this downloads as a PDF file. This is far more user-friendly than squeezing them in a small on-screen window, as was the case with the service I looked at two weeks ago. The investment terms and conditions are written in a reasonably plain English style.
They explicitly state the firm is a discretionary investment manager that does not provide financial advice. Users who want advice are signposted to “seek independent advice from a suitably qualified professional adviser”. Noticeably, even though the service is non-advised, Wealthify is clear it will credit any commission received from collective investment schemes to the individual’s plan.
If the customer chooses to proceed they are then taken through a risk profiling questionnaire to validate the investment style selected. This is always the area I look to test the system hardest and was impressed to see that when I suggested I had no emergency funds it prompted me to invest a lower amount.
This is not advice – and the service is refreshingly clear about that – but it provides better guidance and suitability tools than some digital “advice” services I have seen recently. I find it worrying that some of these offerings appear to be falling short of regulatory standards. This may identify a need for greater clarity around what is and is not advice, so consumers clearly understand what they are getting from different organisations.
Wealthify is providing clear and well-constructed content to guide investors, and this must be applauded. Some readers will respond that consumers should always have advice but can that advice be provided at a price that consumers are willing to pay?
If Wealthify’s offering can make investment affordable to more consumers it can help address the savings gap. The challenge to the advice community is how to convince consumers their added value is worth any extra cost.
Ian McKenna is director of the Finance & Technology Research Centre