Looking at Wealthify’s website, it takes a few moments to realise it is not in the business of selling hipster lifestyle goods.
Bright pictures of quirky young men and women, frequently tattooed and all in fashionable attire, draw the eye much more than the ‘Join the new wave of investors’ messaging.
This is intentional, says Michelle Pearce, Wealthify co-founder and chief investment officer. The robo adviser is reaching for a market of investors so broad – and so unlike the traditionally wealthy – it offers diversified portfolios for a minimum investment of £1.
The language, tone of voice and imagery aims to create a warm, fuzzy feeling that makes investment approachable and bring millennials into the market before they become rich.
‘One of the issues with getting new clients is that people are scared of digital platforms,’ says Pearce. ‘To help them feel more comfortable, we have built a good website with the right things in the background.’
A little more than a year after it officially launched, the firm says it counts some 6,000 registered users, who include traditional high net worth investors, with accounts in excess of £500,000. The average age is 36, and the demographic overwhelmingly male.
‘We want to reach more people through social media and further marketing. Giving our service a human touch is what matters. This is why we are putting much stress on customer service and approachability,’ says Pearce.
Wealthify is among a number of providers trying to project a human touch. Nutmeg and Netwealth have a fairly similar approach. So does Moola, which only recently started accepting clients.
Gemma Godfrey, Moola founder, says the firm is seeking to position itself on the side of the consumer, with relatable and engaging content to help people understand more about investing and give them a comfortable entry point to try out the service.
Accessibility is clearly a big feature of the sector. Nutmeg has a £500 investable minimum, while Moola has a minimum of £100.
Deutsche Asset Management is also launching a robo service for its distribution partners in continental Europe in July. With a minimum investment of €400 (£352), it is probably safe to assume it too is aiming for a broad audeince.
Not the mass market
‘Your investment minimum is undoubtedly part of branding and differentiation,’ says Ella Rabener, founder and global chief marketing officer at Scalable Capital, which sets a comparatively high entry level of £10,000.
The three-year-old firm is consciously turning its back on the mass market to target a very specific audience of tech-savvy investors tired of the traditional methods employed by the industry.
‘Our website, mobile app, marketing focus and investment minimum are all part of how we brand ourselves,’ Rabener says. ‘If we were starting at £50 it would be a completely different approach.
‘Acquisition cost is too high and converting people who are not already in the investment world can be incredibly time-consuming.’
The way Scalable presents itself seems consistent with the aim of reaching a concentrated group that is neither at the lower nor the higher end of the client scale.
The business prefers long-form advertorials and educational blogs to catchy one-liners. It advertises in high-end outlets such as The Economist, targets a very specific audience on social media, and runs hands-on investment seminars.
‘Earlier this month Scalable appeared in an editorial in the Frankfurter Allgemeine Zeitung,’ Rabener says. ‘It was one of our best days ever.’
The firm’s average portfolio size is £35,000. Around 20% of its total £217 million of assets under management come from portfolios of more than £418,000. And more than 50% of portfolios exceed £84,000. It is now launching a pension product to match the needs of a majority of its clients.
‘The public perceives robo-advisers as a millennial thing because this is how the press and other providers have presented them,’ Rabener stresses. ‘But this is not the reality.’
Netwealth is at the other end of the scale, targeting 35-55 year old professionals, who chief executive Charlotte Ransom describes as ‘educated, but time-poor, likely analytical and potentially cynical about what’s out there. They might have anywhere between £500,000 and £5 million, including their Sipps’.
‘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,’ she said.
‘We have a marketing budget and it will be used for a mix of things, engaging people digitally and by holding invitation-only events.’
Still some way to go
A consideration for those who are not preaching to the converted may be that although the market is starting to become crowded, consumer nervousness towards digital investing is still rife.
A PIMFA survey due for publication later this year found that millennials, the stereotyped robo target group, would prefer to talk to a human before investing.
Strong branding might be one way of overcome this challenge.