By John Reynolds on Monday 16 November 2020
Simon Rabin believes there will be a big swing as consumers move towards investment funds amid low interest rates.
The CEO of Chip believes the savings app has a “big opportunity” to own the wealth building and wealth management space as it gears up to launch its first investment products next year.
Simon Rabin said: “I wonder whether what’s happened now with interest rates basically has made cash a bit of a dead asset.”
“And we are going to see an enormous trend towards passive investment funds, passive diversified investment funds, that consumers are going to become as comfortable with as they have been having their money in cash.”
Rabin said that during Covid and a period of low interest rates, its customers have wanted to earn returns outside of cash deposits.
Chip is planning to offer access to funds and ETF’s but not direct equities under its premium account offering launching next year.
Rabin believes current incumbents in the wealth building and wealth management space are underserving customers.
On Robinhood, in particular, he said it appealed to “hobbyists”.
On roboadvisors generally, he said: “They don’t necessarily give people the effective tools to build wealth and put themselves in a better or improved financial situation going forward.”
Chip is now four-years-old and says it has helped savers put aside over £165m over the period.
Rabin added: “We started out by automating savings in order to make putting money aside as effortless and simple as possible, and now we’re on track to revolutionise wealth building by making it automatic."
“2020 has been an incredibly big year for us. Not only did we double the user base, triple the team and close our biggest funding round to date, but we also launched features that allow our users to build wealth and save for the longer term.”