Removing the barriers to investment management and launching an online service within an organisation

By Jane Warren on 26th September 2018

Robo-Advice

Barriers to investing such as the cost of advice, complex jargon and hefty fees all contributed to the rise of technology-led disruptors, but large established players have also entered the market.

Removing the barriers to investment management and launching an online service within an organisation

In the crowded investment platform market, where centuries-old banks compete with start-ups, the diversity of services on offer shows there are many valid approaches to getting people to invest. When we launched Investec Click & Invest over a year ago, we had two aims: firstly, we wanted to make the concept of investing accessible for those who found this world alien or frightening; secondly, we wanted to do so using an actively managed, online service that capitalised on Investec’s wealth management heritage.

Our association with Investec Wealth & Investment has helped on both counts. For those beginning to explore the unfamiliar world of investing, as many of our clients are, our connection to a respected brand is reassuring. It also helps us stand out in a competitive marketplace. Though there are always challenges, overall we benefit hugely from the resources, knowledge and credibility built up by Investec Wealth & Investment over many years. Respecting these traditions, while developing a sleek online experience, has been a wonderful challenge, and one we are all proud of meeting.
 

Breaking down barriers

For years, the wealth industry struggled to appeal to large swathes of the population who, for whatever reason, don’t believe investing is for them. We set about challenging these preconceptions from the start. Through research, we explored the reasons behind the gender investment gap, and emphasised what women stand to gain by investing in the stock market rather than through cash savings. We have been rewarded with a higher proportion of female clients than expected, though of course we could always do more.

Our research found that, for many non-investors, the stock market is not only fraught with risk but also scarily complex. Percentages, graphs, technical terminology – it’s a lot to contend with for those unaccustomed to dealing with this sort of thing. I therefore felt that a simple, quality user experience was essential if we were to attract and retain clients.

Our industry must do more to successfully demystify the investment process and provide clients with the best possible service. For Click & Invest, we drew inspiration from the retail sector, where luxury retailers like Net-A-Porter have proved that a personal service is digitally possible. Our thorough on-boarding experience eases new clients into the process in a way that appeals to novices and experienced investors alike. We are lucky that this has been recognised in our first year where we won an award voted on by consumers.

 

Building trust 

There are a number of barriers to investing including a lack of knowledge and confidence which creates uncertainty about what you stand to lose versus what you could gain. When asked for their thoughts on investing, we found most people focused more on financial loss than potential gain, preconceptions which must be challenged if the industry is to successfully broaden its appeal.  

If these worries remain at the forefront of consumers’ minds, it’s our responsibility to ensure that they feel and know that their money is in safe hands and can trust that our team of Investment Managers are making decisions on their behalf.  

Not only are our clients taken through a detailed application process which thoroughly assesses their appetite for risk, it also helps determine their appetite for risk, and therefore allows us to recommend an appropriate investment strategy. They can also be reassured that Click & Invest is run on the same principles and expertise offered by Investec Wealth & Investment, who have been managing clients’ money for over 180 years. It’s really important to me that Click & Invest clients know their money is being looked after by a team of people and not machines.

It’s a personal passion to lead a business that aims to broaden the appeal of investing. For me, too many people, particularly women and young people, are perhaps missing investment opportunities through a lack of investment education. That companies like Investec Click & Invest are all trying to break down these barriers is a great thing – for our industry and for society.

 

Jane Warren will discuss the opportunities and challenges of building a standalone online investment management 'start-up' within a large listed financial services organisation further and why making the concept of investing more accessible is so important at AltFi's Digital Wealth Forum on 2nd October. Details and tickets can be found here.

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AltFi Amsterdam Summit 2018

AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.

5th November 2018


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