Scalable Capital is looking at partnering with commercial entities such as retailers to offer a white labelled robo-advice proposition.
The regulated fin-tech company offers automated discretionary services and chief executive Adam French (pictured) said he could see a partnership on the cards as retail companies look to add robo-advice to their existing white-labelled financial services such as insurance and credit cards.
Many supermarkets like Tesco and Sainsbury’s already have a suite of such services. French would not comment on which company or companies Scalable Capital has spoken to but said the interest was there.
‘We have spoken to consumer-facing corporate businesses on this front, ones that are looking at this as part of their financial services group,' said French.
‘If this [robo-advice] sector takes off it is the perfect proposition for them to start offering alongside the insurance and credit card services they currently offer on a white labelled basis,’ he said.
French acknowledged client acquisition was a challenge for companies like his but claimed the market was ready to for matching of automated services with millions of clients via a third party.
‘The challenge is customer acquisition. I have to work a lot harder for the marginal client than Old Mutual Wealth or Barclays for example.
‘As soon as a big player launches the service it is my belief it will be a huge success.
‘If you have access to millions of clients who have money, people will use this service,’ he said.
The wealth gap
French said he is on a mission to open the conversation on investments in the UK, in part to start bridging the wealth gap.
‘We need to get more people invested generally. It is good for wealth inequality for the mass market to invest.
‘The problem you have now is you have the 1% investing and earning 7% returns per year and you have the mass market in cash earning 0% a year.
‘The rich are getting richer and the mass market, unfortunately, cannot keep up,’ he said.
Scalable Capital offers a ‘full fiduciary service’ where clients select a risk category and the firm does the rest on a discretionary basis but has not ruled out full automated advice.
‘The difference between what we do and advice is actually quite small on the technology side of it. The only thing we don’t have is the permissions, but if someone came with the permissions then we could offer it.
‘Advice permissions are not something we are looking at getting per se but it is not off the table in terms of how we are looking at how our solution develops going forward. Discretionary is a great service but I cannot solve all my clients’ problems right now,’ French said.