A new service aiming to offer affordable financial advice has begun its pre-launch and is due to be available to the UK public in the autumn.
Munnypot is a robo-advice and investment service designed to be easy to use and provide straightforward financial advice in a language any investor can understand, at a fraction of the cost of a financial adviser or wealth manager.
Munnypot is aiming to address the financial advice gap affecting 16 million people across Britain. As of May 2015, 47 per cent of consumers had not received any form of financial advice within the last three years, yet research suggests that the demand is there – up to 5.4 million extra people would consider paying for advice if it cost less.
Figures suggest 57 per cent of UK working adults have less than one month of income saved. It is widely believed that lack of clear and affordable guidance may be largely to blame.
Munnypot combines the latest robo-advice technology with human expertise to learn about an investor’s financial situation, set financial goals, invest their money, and keep them posted on performance.
Users begin by answering simple questions online to define their life goals. This is done using natural language and a conversational style. They can then 'play’ with different scenarios to understand how their financial future could be affected by different decisions.
Munnypot goes beyond simply making suggestions and instead plans to offer clear advice on the best way for a person to invest their money, via one of five tracker products. It keeps consumers informed on performance, advising them on the possible decisions to take if things change.
Munnypot works the same for a GBP1,000 investment as it does for a GBP1 million investment.
Munnypot is co-founded by financial services entrepreneurs Simon Redgrove and Andrew Fay and backed by significant investment.
Redgrove says: "The UK's current system of financial advice is profoundly unfair and must change. Millions are bamboozled by the variety and complexity of financial products on the market. The financial service industry profits from this, charging sky-high fees for advice, whilst often failing to outperform the market. We're on a mission to make financial advice affordable and accessible to all, so that their money works harder for them. The Munnypot product is like nothing else on the market – we can’t wait to hand it over to UK consumers."
Fay says: “The first generation of robo-advice services were, frankly, too robotic and failed to actually give people advice. Munnypot is aiming to change that by creating a more natural, intuitive experience that delivers actionable advice, rather than vague recommendations.”
Munnypot is backed by SEI. Through the SEI Wealth Platform, the organisation will provide outsourced investment operations, including trading, custody and settlement services. SEI is also providing consultancy services to help bring the proposition to market.
Brett Williams, managing director, SEI Wealth Platform, UK Private Banking, adds: “As a consequence of the RDR, we have seen an increase in demand for automated advice solutions to help those customers who are no longer being served by advisers, or for those that want to self-serve with some help and guidance. We are delighted to be partnering with Munnypot, which we believe will be a disruptive brand in the UK market and think the company’s user experience, mobile-first design and simplicity will greatly appeal to a broad range of consumers, not just the tech savvy mass affluent millennials. The innovative ongoing alert and messaging framework is extremely powerful and gives customers the chance to be regularly updated on their financial matters.”