A company hoping to help financial advisers build a robo-advice service will be trialing its services by the end of the year after getting authorisation from the Financial Conduct Authority.
WealthKernel was co-founded by Karan Shanmugarajah to provide investment management and technological support for companies – from banks to small financial advisers – seeking to operate an automated advice service.
The London-based company was given authorisation by the FCA at the end of last month.
Mr Shanmugarajah said he was not sure when the service would become more widely available.
He said: “We are doing the last little bits and by the end of the year we are hoping to get friends and family using it.
“We are self-funded for the most part so we want to spend more time on the product.
“Everyone wants to go as fast as possible but we want to be a bit more cautious.”
He said the company has already lined up two clients to use the system when it is up and running: one is an insurance company in Europe and the other is a robo-adviser in the UK.
Mr Shanmugarajah was a portfolio manager with Barclays for three years after working as an analyst.
He said his company was committed to offering its services to businesses, rather than direct to the consumer.
He said: “I am not built for D2C. I was always a guy who managed portfolios really well but I was never a guy to call the clients. I know what my skill set is and I respect people who can do that better than me.”
Mr Shanmugarajah said advisers could “thrive” in the digital world but said they would probably have to adapt.
He said: “Department stores in the late 1990s didn’t believe in having a website but now they will all have at least some form of click and collect.
“I am not an IFA but I cannot imagine many people will be happy to pay more than 2 per cent when they can go online and get something for 50bps – that’s a tough sell.”