Anthony Morrow, founding shareholder of IFA group Paradigm, and Duncan Cameron, co-founder of Moneysupermarket, are planning to launch a new online advice business called eVestor.
Based in Wilmslow, Cheshire, the venture is expected to launch in 2016, combining an “effortless user experience” with integrated regulated advice, to make investing more accessible and affordable.
The investment solution will be tailored to specific needs and made available via traditional wrappers, including pensions and Isas.
The service will cost 0.44 per cent, which is made up of 35 basis points for product, advice and investment, with 9 bps for fund charges.
For those needing additional support, eVestor will offer a dedicated team of professional advisers, for what the firm pitched as “a fraction of the cost of many other online advice and investment propositions”.
Chief executive Mr Morrow explained the business was born out of the belief that investing is too expensive and complicated for the vast majority of people in this country.
“With eVestor, we are creating a proposition that will not overcharge clients. Instead, it will engage with them to provide a service which suits their needs. Using technology as the enabler, we believe we can make investment decisions simpler while also reducing the cost.
“We want to empower consumers to become increasingly comfortable when it comes to understanding and managing their investments, so education will also feature heavily in our ongoing service,” he added.
Mr Cameron commented the proposition “has the potential to revolutionise investment advice for the benefit of consumers in the UK”.
So far the UK’s automated advice market has not moved as fast as developments across the Atlantic, where one consultancy recently predicted around £1,200bn will be managed under ‘robo-advisers’ by 2020.
Advancements made by US pioneers Betterment and Wealthfront - both approaching $3bn (£1.9bn) each in terms of assets under management - were pounced upon by Charles Schwab in March this year, with its brand meaning that it has already clocked up around $4bn (£2.6bn) worth of assets in it Intelligent Portfolios.
In August, BlackRock also signalled its intent, acquiring FutureAdvisor for an undisclosed sum.
Meanwhile, on this side of the pond moves have been less bold, with LV taking a majority stake in automated advice firm Wealth Wizards to power its online retirement advice service and Just Retirement making tentative moves into ‘simplified advice’.
Analysts have suggested that while regulation is slightly more lax in the US, the potential reputational risks in the UK - particularly around the unlimited liability advisers have to bear - may be putting larger institutions off early market entry.
peter.walker@ft.com
