M&G Wealth has launched a direct-to-consumer investment platform called '&me' following its decision to lead a £44.1mn funding round in digital investment app Moneyfarm a year ago.
The platform, which will focus on younger investors and savers in the ‘accumulation’ wealth phase, was built in nine months and employs a handful of investment consultants.
This means clients are able to speak to someone, unlike a robo-adviser model, though these consultants are not advisers.
M&G Wealth will, however, provide advice to Moneyfarm on the composition and rebalancing of the risk weighted portfolios.
"[The platform] is designed to help people invest with a long-term view and approach, encouraging them and helping to educate through the app and the dedicated &me consultants," said managing director at M&G Wealth, David Montgomery.
"This is an easy-to-use investment app that guides people through the process of investing, but more importantly, has real people to help answer real questions.
"Not everyone wants, or can afford, to take full advice and we want to enable more people to save and invest for the financial future they want and dream of."
Alongside the platform, M&G's deal with Moneyfarm also sees the digital investment app provide product wrappers, asset management capabilities, and back office operations.
The &me investment app is now live on Android and iOS, as well as through a web application.
The app will identify customer's comfort with risk, as well as their financial goals, through a "few simple questions" before matching them with one of the six &me portfolios.
There are 'classic' and 'targeted' portfolios.
Classic portfolios are typically lower cost, made up of exchange traded funds and investing in equities and bonds.
Targeted portfolios consist of a blend of actively managed and passive funds, investing in equities, bonds and alternatives.
Once one of these portfolios is selected, the customer then chooses the type of account they want. These include a stocks and shares Isa, Jisa, pension or general investment account.
Customers can call or chat to Moneyfarm's team through the app, as well as book a video meeting with an &me consultant.
The minimum investment to use the &me app is £500. On top of this management fee there is also an investment fund fee.
For the classic range this is 0.19 per cent, and for the targeted range this is 0.42 per cent.
So, if a client invested £20,000 they would pay £14.67 per month in a classic portfolio, and £17.83 per month in a targeted portfolio.
Invested amount Management fee
Up to £10,000 0.75%
£10,000 to £20,000 0.70%
£20,000 to £50,000 0.65%
£50,000 to £100,000 0.60%
£100,000 to £250,000 0.45%
£250,000 to £500,000 0.40%
£500,000+ 0.35%
Source: M&G
Moneyfarm already provides investment platforms to partners abroad, but this is its first white-label deal in the UK.
M&G's decision to lead its investment round at the beginning of last year saw the global investment manager take a minority stake in the business.
Earlier this month, Moneyfarm appointed former Virgin Money boss Dame Jayne-Anne Gadhia as its chair.
She previously founded money management app Snoop after 11 years at Virgin Money where she led the lender to IPO.
Moneyfarm’s current shareholders include M&G, Poste Italiane S.p.A, Cabot Square Capital, United Ventures, Fondazione di Sardegna, and Smedvig Capital.
D2C to hybrid advice
Back in August, Montgomery said over time, he does see "a blending" of what Moneyfarm provides today plus the company's hybrid advice services.
"So when you get to the more complex needs of customers, but they still want to interact with you through that digital channel, then they can get into hybrid advice," Montgomery explained at the time.
"You can see a natural evolution from: a customer joins with simple needs, they then acquire a more complex set of requirements and they can go into hybrid advice.
"And then over time, they may need full, holistic planning and want a financial adviser involved."
M&G Wealth is also in the process of building out its hybrid advice service with a view to offering it to retail banks’ customers.
The wealth arm of M&G said banks are a good avenue for tapping the mass market and increasing the uptake of financial advice across the UK.
At the end of 2021, M&G launched its hybrid advice service - a mix of technology and its self-employed advisers checking outcomes.
The service, developed with the help of Australia-based technology provider Ignition Advice, was ‘soft launched’ to a group of existing customers last year ahead of a wider roll out throughout 2022.
ruby.hinchliffe@ft.com
