A new online investment service aimed at “millennials” has said it will not offer advice because it doesn’t believe young people need it.
Wealthify launched earlier this month and is aimed at people aged between 25 and 40, allowing them to invest a minimum of £250.
Michelle Pearce, co-founder and chief investment officer at Wealthify, said she was a millennial who worked in the investment sector and set up the business after her friends asked her what they should do with their money.
She said: “The sad truth was that because they were talking about £5,000 or at most £10,000 their options were limited.
“They were given low rates by banks or complex products with lock-ins and an IFA wouldn’t want to look at you unless you have got £50,000.”
Those who invest between £250 and £14,999 with Wealthify will be charged 0.7 per cent while those who invest between £15,000 and £99,000 will be charged 0.6 per cent and those who invest £100,000 or more will be charged 0.5 per cent.
The service offers five different “investment styles” including “adventurous” and “tentative” with investors assessing their own attitude to risk through a series of questions.
Ms Pearce said: “The main reason we are non-advised is that for our target audience there is not really a lot of advising that needs to be done.
“When you are talking about wealthier individuals, they may have Sipps or different tax wrappers but what our target audience is really looking for is a very simple Isa and the majority don’t need advice.”
Money saved through Wealthify will be 80 per cent invested in passive vehicles such as ETFs and mutual funds.
The service will also include a social aspect called Wealthify Circles which gives customers discounted fees if they introduce their family and friends to it.
Richard Ross, director of Norwich-based Chadwicks, said: “I think the suggestion that younger people can be served by what is effectively an online guidance process holds true for the majority.
“The lower cost and convenience are likely to mean people engage in financial services earlier.
“As a profession we are not particularly good at articulating how we can add value and if services such as this can help demystify financial services and build trust in the wider industry then it will increase the likelihood that people will seek advice as their finances become more complex.”