Italian ‘robo-adviser’ targets UK launch

Italian ‘robo-adviser’ targets UK launch

Italian digital wealth management company MoneyFarm has completed a major round of financing in preparation for launch into the UK market.

The company has raised a €16m (£11.3m) investment from Cabot Square Capital and United Ventures.

MoneyFarm uses technology to deliver advisory and discretionary services at a fraction of the cost of a traditional wealth management firm, according to a statement.

It has already built up a registered user base of more than 50,000 in Italy, with chairman and co-founder Paolo Galvani stating that UK investors “need cheaper and more transparent wealth management services”, adding “their investment returns really do suffer because of the service they are currently getting”.

He argued that wealth management and advisory services in both the UK and Europe have typically been very expensive, while delivering below market performance and poor customer service.

“We believe technology is the key in creating solutions that can achieve far better results for customers at a much cheaper cost.

“Keeping costs down is one of the major drivers of better investment results over the long term. That’s why we decided to combine technology and process innovation with structurally low costs instruments such as ETFs.”

James Clark, partner at Cabot Square Capital, commented that combining technology with a strong customer service ethic has enabled the firm to build lasting relationships with their customers.

“The team has proven MoneyFarm’s appeal by building a sustainable and growing FinTech business in Italy and we are excited to help them deliver the same level of service and product to clients here in the UK.”

As well as launching in the UK in next year, MoneyFarm plans to continue the double-digit growth in the Italian market, positioning itself to be Europe’s leading digital wealth management business.

The firm recently received regulatory approval from the Financial Conduct Authority and is also regulated by the Bank of Italy and Italian securities and exchange commission, CONSOB.

MoneyFarm revealed their plans to launch in the UK as the FCA announced it intends to open a sandbox unit to help firms test potential robo-advice offerings and “innovative products” in spring 2016.

According to the watchdog their new sandbox unit will allow businesses to test out new, innovative financial products, services or business models without incurring all the normal regulatory consequences of engaging in those activities.

The launch of the unit comes after the regulator came under fire from Harriet Baldwin, the economic secretary to the Treasury, for making innovation difficult back in September.

Ms Baldwin said a start-up that wanted to enter the automated advice space was told it would have to ask consumers 247 questions to comply with regulation.