Investors are moving to robo advice as they rush to meet April 5 deadline.
Robo advisors are seeing an increased interest in their services as investors rush to lock in their Individual Savings Accounts before the tax-year deadline.
Nutmeg, the largest and oldest robo-advice platform although it prefers the term online wealth manager, has seen its strongest ISA season yet, said Katie Prentke English, the firm’s chief marketing officer.
“Year on year, we've seen a 260 per cent increase in total new investors, including non-ISA and pension investors,” she said. “We're seeing a combination of both ISA transfers and new ISAs, with an acceleration of new ISAs opening.”
Robo advice is the term given to digital and online wealth managers and financial advice that uses automated investments. Investors assets are allocated into portfolios based on risk tolerance and other factors. The platforms often offer general investment as well as ISA and pension options.
The tax-allowance is £15,240 but will raise to £20,000 next year. Investments can be made into cash, stock or innovative finance, such as crowdfunding, portfolios or a combination of all three.
Scalable Capital, a wealth manager that users automated algorithms to adjust portfolios on a daily basis, is starting to see a pick up in ISA investments but “the real rush around ISA Season has only just started,” said Marianne Slamich, a spokesperson for the firm.
The German and UK-based firm has 3,500 clients and is growing at about £5m to £6m in new assets per week.
There is often more interest in robo advisors this time of year as awareness of the ISA increases, said Caroline Evans, a spokesperson at robo advisor Moneyfarm. The firm is seeing a combination of new ISAs and transfers, usually from cash ISAs.
“We think this is a combination of low interest rates, rising inflation, and the personal savings allowance which are causing people to turn to investments for their ISA allowance,” she said.