By Daniel Lanyon on Wednesday 27 January 2021
The digital wealth manager will continue its direct to consumer offering in Germany and Austria as well as its B2B operations in the UK but not target UK retail investors directly.
Scalable Capital, one of the first digital disruptors in wealth management, is closing its direct UK retail wealth management business.
The Anglo-German firm, which also operates in Austria, launched in 2017 as ‘robo adviser’. It later won a number of large customer mandates through partnerships with the likes of ING Germany, Siemens and more recently Barclays in the UK.
In an email to clients in the UK seen by AltFi, the firm said:
"Scalable Capital has operated across multiple platforms in the past. We have taken the decision to consolidate our services onto one central platform to provide a consistent and scalable experience across markets and offerings. Following significant analysis and serious consideration, the German platform has been selected for further international expansion of our B2C brokerage and wealth businesses. As a result of this decision, we will be closing all client accounts in the UK"
It offers both SIPPs and ISAs alongside general investment accounts but has a higher bar for client money - £10k - compared to other firms such as Nutmeg.
Pressures on the cost of customer acquisition to grow assets under management directly to retail have plagued digital wealth managers with a number shutting their doors. These have included standalone brands as well as digital offerings from the likes of UBS.
Scalable Capital has clearly grown, however, with its total assets across its direct and B2B channels now reaching €3bn making it perhaps the largest digital wealth manager in Europe. Nutmeg is also close to this figure.
It has offices both in the UK and Germany but AltFi understands that no redundancies will take place at either thanks to its continued growth in its B2B operations.
It will, however, bring all customer monies onto a single platform including ending its custodian services in the UK provided by Winterflood in London.
Scalable Capital’s UK clients will be helped to transfer their accounts away from the UK platform while new and existing B2B partnerships will continue to be operated with local partners around the world, including the UK.
Scalable raised €50m Series D funding round last year, bringing its total funding to c.€114m.