Robo-advice  

Robo-adviser sees 281% client growth as losses double

Robo-adviser sees 281% client growth as losses double

Robo-adviser Moneyfarm has seen its number of investors reach new heights, despite seeing its losses more than double.

The company has seen its investor numbers reach 30,000 while assets under management grew by more than 50 per cent to £400m.

Meanwhile revenues for 2017 increased by almost 500 per cent to just above £1m - though revenues for the previous year were not for a full 12 months since the company had only just launched.

But Moneyfarm's losses also increased, from £6.3m to £13.9m as the company invested in its growth both in the UK and abroad.

Paolo Galvani, co-founder and chairman of Moneyfarm, said the company had set itself the target of growing customers by 209 per cent during 2017 which it exceeded, achieving growth of 281 per cent for the year.

He said: "We’re seeing continuous investor growth of 7 per cent month-on-month and monthly inflows of 11 per cent of assets under management. As more than 40 per cent of our investors deposit regularly through recurring payments, this provides a strong foundation for exponential growth."

Earlier this year Moneyfarm, which is minority-owned by Allianz Asset Management, launched a self-invested personal pension and since then the robo-adviser has seen the average first investment size increase by 120 per cent, with 58 per cent of pension accounts opened by existing investors.

Mr Galvani said the company is now investing in a more personalised advice service, which will be launched in the coming months and will use data - including information about the whole family's wealth - to provide a more individual recommendation.

He said: "The advisory concept has always been in our DNA since day one. The next natural phase is to analyse a much larger amount of data in order to provide a more personalised advisory service.

"We’re looking at factoring in partner income, monthly savings, and expenditure to help make financial goals more attainable.

"Existing ‘robo’ options are limited to generic click options for savings targets – car, house deposit, rainy day fund – but each person’s goal is unique. Our questionnaire-based approach will incorporate far more data points to ensure that specific saving requirements, such as the cost of raising a child, are factored in. It’s all about providing the most accurate advice possible."

Moneyfarm, which recently introduced a minimum investment amount of £500 to make sure its investors are properly diversified, has a tiered charging structure starting at 0.7 per cent for anything below £20,000, and decreasing to 0.4 per cent to anything over £500,000.

damian.fantato@ft.com