The arrival of new app-based investment services with low minimum investment requirements has opened up a wealth of choice for savers, but many UK consumers are unaware of the new options open to them

A study from CREALOGIX, the provider of digital banking solutions, has found that only a fifth of UK consumers are aware that wealth management services can be accessed with as little as a £1 investment.

Alongside this, almost half of consumers have not made any investment of £100 or more in the last decade despite the fact that the average British consumer tries to put away £171 into savings, further highlighting the potential for easy-access investment opportunities for the mass market.

Once only accessible by investors considered “high net worth individuals”, sophisticated investment management is now available through a growing selection of digitally accessible services. Automation and improvements in self-service digital portals and apps have radically altered the traditional wealth management market by lowering the barrier to entry and thus dramatically widening the potential consumer market. Consumers in the UK now have more choice than ever before when it comes to finding ways to grow their money, and wealth management firms are in a strong position to attract huge numbers of new investors. Nevertheless, both consumers and the established wealth management firms have been slow to grasp the opportunity.

The independent study of 1,200 UK consumers commissioned by CREALOGIX revealed that those with £100,000 to invest would likely to turn to their family (35%), their partner (32%), or their existing retail bank (29%) before they would seek out a dedicated wealth manager (19%).Negative views of the financial industry post 2008 may play a part: the survey revealed 19% view traditional City of London wealth managers as “elitist” and 18% regard them as “old-fashioned”. Respondents associated professional wealth management service with in-person services: 40% said they would choose a wealth manager based on access to face-to-face time with an advisor. This is despite the fact that many of established wealth management firms now offer self-service and digital channels, while a growing range of fintech investment services aim to eliminate the need for human advice altogether.

Jo Howes, Commercial Director at CREALOGIX UK said: “Many consumers still hold a negative perception of the wealth management industry as behind the times. In the past, professional investment services were often exclusionary and associated with expensive, opaque fees. In fact, wealth management services are now more accessible and flexible than ever, and new digital offerings are democratising access to a wide choice of high quality investment options, including for people with smaller amounts to invest. Instead of viewing wealth management purely as a face-to-face service for the wealthy, most ordinary consumers can take advantage of new digital services, which are well designed to address modern user requirements of transparency and 24/7 access.”

Asked what criteria would be important in choosing wealth management services, 22% of consumers cited ease of access to their investments, while almost a fifth (19%) cited aspects of mobile app design, app-delivered advice, and app-based features.

New digital services from wealth management firms aim to balance the scalability and automation of digital self-service portals with the high quality investment options and active portfolio management previously available only from an expert (human) relationship manager. Some 47% of UK consumers are either very receptive or somewhat receptive to the idea of receiving robo-advisory type investment services online and via mobile apps. This matches a picture of increasing digital self-service across UK consumers’ financial lives, as 61% are managing most of their bills online, 52% are managing savings and a quarter are managing mortgages and property-related payments digitally.

Jo Howes said “The main barrier to accessing wealth management services isn’t a lack of financial resources but a lack of awareness of the availability of the services. Addressing this misconception has the potential to significantly expand the market for wealth management services and foster stronger relationships with customers. We expect to see choice – and hence competition – increase rapidly in the next two to three years. Wealth management firms that have a roadmap in place to deliver new and improved digital investment services stand to gain from this technology-fuelled democratisation of wealth management.”

The independent study was undertaken by Censuswide between 26^th–29^th July 2018. It interviewed 1,200 consumers aged 16 and above.

For more information, visit https://crealogix.com/uk/products/crealogix-invest/