The UK’s second biggest direct-to-consumer (D2C) platform Interactive Investor (ii) has revealed plans to launch a 'hybrid' robo-advice offering.
Speaking to New Model Adviser®, ii chief executive Richard Wilson (pictured) also set out a long-term ambition to follow in the footsteps of rivals Hargreaves Lansdown and AJ Bell with an initial public offering (IPO).
Currently ii does not offer robo-advice, although it does offer its customers guidance and information, including its best-buy list Super 60 which launched earlier this week. However, Wilson said the firm wants to develop its own robo-advice service, which will include both digital advice and human-based advice and guidance services.
‘We will end up inevitably in the advice space. How much of that is digital and how much is human, it will be a hybrid model.
‘You have a customer journey and you have different points of that journey that require support or guidance and some of that will be advised and some won’t, so that needs to be carefully done. It is not a near-term target but by the end of 2019 I would expect us to have made material progress on this.’
Wilson said he did not know how many advisers would be part of the plans but stressed the firm will not be ‘fiddling around with it: you either do it properly or don’t do it’.
He added he had looked at buying other robo-advisers but concluded it would not be worth buying a firm.
‘They have a moderate customer base and the intellectual property they own is not interesting,' he said. ‘Not very many [robos] will survive.'
Wilson also said the company would consider floating on public markets in the future.
‘For a business of our type, as a scale retail financial services business, the public market is an obvious end point, but it is just an end point. It is not our immediate horizon to think about that. We don’t need new capital.’
Currently ii, which acquired adviser and D2C platform Alliance Trust Savings (ATS) last year, boosting its assets to £35 billion under administration, is majority owned by private equity house JC Flowers.
‘At some point, given the nature of the private equity market, we expect to have some change to that, but that is years rather than months away. For our type of business the public markets are the natural place to be but we will see where we are nearer the time.’
He added IPOs are a ‘fickle’ market and any listing would depend on what the appetite is at that particular point.
In December fellow D2C and adviser platform AJ Bell floated. It currently has a market capitalisation of over £1 billion after its shares rose by over a third on its listing.