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Profile: the boutique the blue chips are backing

Profile: the boutique the blue chips are backing

They say that necessity is the mother of invention and it was finding herself in a state of ‘paralysis’ regarding her finances that inspired former Goldman Sachs partner Charlotte Ransom to set up her own online wealth firm.

‘I spent 20 years at Goldman, the last five as head of wealth, so I got to know a lot about wealth management and the propositions out there,’ she says.

‘When I left [in 2011], I’d been working for 25 years and I wanted to tidy up my finances. I quickly realised that I didn’t want to spend my time managing my money, nor did I want to give it to any of the offerings around, so I found myself in a state of paralysis.’

Netwealth opened its doors last month, offering both investment management and financial planning to high-earners who have a minimum of £50,000 in savings. It has been designed as a low cost service with long-term asset allocation at its core, but with the option of face-to-face advice for clients who desire it.

‘It seemed to me that discretionary investment management made sense, what made less sense was that the offerings out there were relatively un-transparent and relatively high cost, which in a low return environment, were unappealing,’ Ransom says.


‘We wanted to combine the best parts of private banking and discretionary investment management with the best things technology can bring.’

Although the news that another player has entered the burgeoning, so-called fintech market may be met with a shrug by some, this one certainly stands out – not least due to the big-hitting team it has attracted and its A-list City backers.

Ransom, who took on the chief executive role, co-founded the firm in January with former JPMorgan managing director, Thomas Salter, who serves as chief operating officer.

The pair both have extensive backgrounds in the institutional world and had worked together at Decura between 2012-2014, a newly launched asset management business which imploded after losing a legal battle over distribution with UBS (‘you learn a lot if you’ve been at a start-up that didn’t work’).

They quickly set about assembling a team, which includes a host of former senior executives from JP Morgan, Julius Baer, Schroders and UBS Asset Management.

Gerard Lyons, who was previously the chief economic adviser to former London mayor Boris Johnson and chief economist at Standard Chartered, was signed up last month as chief economic strategist. 

The management committee also includes former UBS Asset Management executive director Iain Barnes, who joined as head of portfolio management, and Rachel Willox, latterly an executive director at JPMorgan, recruited as head of operations.


Ransom and Salter have ambitious plans for the business and City grandees have bought into them. The start-up raised £6.5 million from angel investors and has a list of personal shareholders that reads like a who’s who of the business pages. These include Jupiter Fund Management vice-chair Edward Bonham Carter, Santander vice-chair Bruce Carnegie-Brown and Rosemary Leith, a tech entrepreneur and the wife of Tim Berners-Lee.

Ransom is keen to differentiate Netwealth from the wider ‘robo’ market, stressing that its investment management proposition ‘will have a human hand on the tiller’, while clients can opt for face-to-face advice. Technology is very much viewed as the ‘enabler’, with human interaction an important aspect of the service.

‘I struggle with the notion of fintech, we are very much more financial than technology,’ she says.

Netwealth is predominantly targeted at 35-55 year old professionals, who are ‘educated, but time-poor, likely analytical and potentially cynical about what’s out there’.

‘They might have anywhere between £500,000 and £5 million, if you include their Sipps, but we can see some being either side of that,’ Ransom says.

‘We’re deliberately trying to bring the service to this group because they’ve never had a service designed for them before. If you look at old-world private banks, a lot of people do want that service, but there aren’t a lot of alternatives.


‘They are all offering the same service and we are presenting something genuinely different.’

Clients coming to Netwealth will carry out the risk profiling process online and can select multiple pots, covering different investment goals, such as longer-term retirement planning or shorter-term aims, such as funding school fees.

The firm also offers a range of product wrappers, comprising Sipps, with James Hay acting as trustee, ISAs, Junior ISAs and general investment accounts. SEI provides the back office and custody.

Clients can select from a range of seven risk-graded multi-asset portfolios, run using a strategic asset allocation approach with a cyclical overlay. They are designed to be long-term in their approach and, although they will be tweaked over time, the funds will eschew short-term tactical trading.

‘We looked at taking one of the systematic strategies, using algorithms to define the asset allocation, but we didn’t think it would work for a number of reasons and we wanted to have a human hand on the tiller,’ she says. ‘We are not trying to be too clever, just investing sensibly over time.’

The underlying holdings are passive and generally exchange traded funds (ETFs), unless single instruments, such as gilts, can be bought cheaper directly. This is designed to keep costs down with Netwealth aiming to deliver its investment service for a third of the cost of traditional asset management.


The firm has a tiered fee structure, which starts at 65bps for £50,000-£250,000, falling to 50bps on £250,000-£500,000 and 35bps for £500,000 and above.

The charge covers asset management, VAT, tax reporting, custody and execution, although there will be the cost of the underlying ETF holdings’ charges on top, which are 20-30bps on average.

Advice, if required, will be charged separately at £125 per hour including VAT or 0.2% of assets under management (AUM) if clients want ongoing advice.

‘Clients pay a separate charge for advice, which is deliberate, because we don’t know what proportion of clients will want advice,’ Ransom says.

‘If you are talking about transferring over Sipps, they normally have hundreds of thousands in them and it is very likely that people will want to speak to someone.’

To encourage affluent individuals to switch over to the firm it has also established the ‘Netwealth Network’. This enables clients to invite friends and family into their network. They will have their own portfolios, but their fees will be calculated on the amount of their total pooled assets, which means that the children of parents with over £500,000 could set up an ISA or Junior ISA and benefit from the lower 35bps fee.

‘It is designed to help families with cross-generational wealth planning, creating economies of scale,’ she says.


‘If you are young and are paying 35bps rather than compounding the effect of paying 1-1.5% fees, it is very powerful.’

The network initiative is likely to prove important to Netwealth because the business needs to build scale.

Ransom says that the firm’s angel investors are long-term backers of the business, but it will need to build significant assets under management (AUM) before breaking even and then moving into profitability.

‘We were very targeted in who we went to in our angel investor raising. They are all friends and ex-colleagues in some cases. They are very excited about being part of making it happen,’ she says.

‘There are different ways to think about breakeven. We have designed the business to be the best wealth management offering and I wouldn’t expect to be reaching breakeven before we have £2 billion AUM. We’re talking about several years, maybe five or six.’

Some of the £6.5 million raised will be used for advertising, but Ransom says that this will be very targeted.

She adds: ‘Our marketing is geared towards a very discreet client segment. We have no intention of being on the tube or on the side of taxis. We feel it is not appropriate.

‘We have a marketing budget and it will be used for a mix of things, engaging people digitally and by holding invitation-only events.’

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