The boss of Investec Wealth & Investment’s recently launched robo service has defended the 18-month delay in bringing the service to the market.
Click & Invest finally launched this week having originally been set to come to market in the fourth quarter of 2015, and then in autumn 2016.
Jane Warren (pictured), Investec W&I’s head of digital and CEO of Click & Invest, said the firm was ‘trying to create that feeling of personal service’ but admitted that ‘doing it digitally is quite difficult.’
She told Wealth Manager: ‘It actually took us longer than we thought but we wanted to feel comfortable when we went to market and not just throw anything out there.
‘Investec is all about service. What we didn’t want to do was dilute that approach.
'It’s increasingly difficult to recreate a personal service digitally, so that’s why it took us longer than we anticipated. It had to be absolutely right, the whole concept had to be right for the client.’
Unlike many other robo-advisors which have emphasised cost control above all else, Click & Invest will be actively managed.
A risk-scoring algorithm will place clients into one of five portfolios, which will then be actively managed by Investec’s investment team, utilising over 300 actively managed funds, chosen from the whole of the market.
Warren believes this is key for the firm to differentiate itself from its competitors and win clients in what has become a ‘much more crowded’ marketplace since Investec first started developing the service two years ago.
She said: ‘We’re an active house, that’s what we believe in. But a lot of clients hear about passive and one of the challenges has been explaining to clients the benefits of active compared to passive – that’s been a challenge.
‘[The market] is really competitive. It’s much more crowded than when we started two years ago. Pricing wise you have got to be quite keen. It would be easy to get into a race to the bottom, but what we have is a very different proposition.’
Click & Invest will charge an annual management fee of 0.65% on the first £100,000 invested, 0.50% on the next £150,000 invested and 0.35% on funds above £250,000.
The minimum investment will be £10,000 and Warren said the service is aimed at young families who already have some investments: ‘If we look at the demographic, it’s young families who do have investments like cash ISAs, who are looking to save for their children’s university education, or wedding, or whatever.’
Warren said the service will also offer educational videos explaining financial jargon, aimed at clients who are both time-poor and mistrustful of firms who fail to explain financial complexity.
She said: ‘We’ve done an awful lot of customer research and we’ve seen that with some of these other services there is a lot of jargon and people don’t like that.
‘They don’t trust firms when they use a lot of jargon. We also believe people are time-poor and don’t have the time to learn about these terms, so one of the big things we’ve done is used a lot of videos to help educate people on the jargon.’