Brexit discourages robo-advisors from entering the UK

Aussie fintech Ignition Wealth is expanding into Ireland instead

Australian robo-advice provider Ignition Wealth has chosen to expand into Ireland not the UK in part because of Brexit.  

Robo-advice provider Ignition Wealth is set to become one of the only Australian fintechs to expand overseas.

With a twist of the knife, the company said that it will open offices in Ireland not London, in part because of Brexit.

“We met with a couple of very large accounting managers and they were all expressing the view that they were considering moving their UK office to Dublin [after Brexit],” Mark Fordree, CEO of Igntion Wealth, told Robo Advice News.

“Nobody really knows how long this is going to take or how messy this is going to be. At worst there is going to be a huge push into other regions.”

But it wasn’t only Brexit.

Ignition also chose Ireland because it better suits its business model. Irish financial advice is dominated by advisors who charge commission. Commission-free digital advice offerings like robo remain mostly unknown.

“We saw little evidence of using technology to scale businesses [when we visited Ireland],” Mr Fordree said.

“It was mostly manual procedures and the costs that go with that.”

Choosing Ireland has drawbacks, Mr Fordree acknowledged. Its market is small and highly concentrated – which can be good and bad.

A more concentrated market makes breaking in harder, yes. But it also means that once a relationship with a big company is forged, much of the Irish population can be reached.

“The demand is there because we’re business-to-business, not business-to-customer,” Mr Fordree said.

“Our strategy is partnering [with existing Irish companies]. We’re not going to launch a B2C in Ireland. Ever. It will be determined by the caliber of the partners we take on.”

Because no Australian fintechs have built up businesses in Ireland, Ignition will have to blaze its own trail. But Mr Fordree is alive to the challenge.

“When we talk about digital advice three years ago it was probably only a very small percentage of big distribution arms that were talking about it. Now it’s a small percentage that aren’t.”

This article was originally published on www.roboadvicenews.com.