Robo-adviser posts £2.3m loss

Robo-adviser posts £2.3m loss

Robo-adviser Wealthsimple posted a £2.3m loss during 2017.

The Canadian business launched in the UK in September last year so its results for 2017 only covered four months and as a result Wealthsimple posted only £696 of revenue.

This was set against £686,141 which was spent on advertising and promotion and £894,188 which was spent on salaries and compensation, putting Wealthsimple's expenditure at £2.28m.

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Wealthsimple's results said: "Throughout 2017, the company has continued to invest in its technology while simultaneously improving the online user experience for its clientele. Growth of client base is a result of strategic and effective marketing investment."

It added that the company's directors were "satisfied" with Wealthsimple's growth in the UK going into 2018.

The robo-adviser, which operates in Canada, the USA and the UK, now manages more than £2bn globally and has 100,000 clients but has not broken down how much of this comes from the UK.

Last month Wealthsimple launched a pension product which includes a service to help savers switch from their existing provider.

Wealthsimple is backed by Power Financial, which is the parent of a number of financial services companies, including Canada Life.

Earlier this year Power Financial invested nearly £37m into Wealthsimple, taking its total investment to CAN$165m (£95.7m).

Toby Triebel, Wealthsimple's European chief executive, said since the company's backer was a financial services business and not a venture capital firm, this meant it had the experience and patience to help the robo-adviser grow.

He said: "It is a strategic, long-term partnership rather than an ad hoc five-year one."

Mr Triebel said Wealthsimple sees its £2.3m loss as an investment, adding: "We are still in the growth phase right now."

So far most robo-advisers are loss-making, with Nutmeg seeing its losses increase to £12.3m for 2017, Moneyfarm posting a loss of £13.9m for the same year and Scalable Capital losing £1.3m.