Smarterly

Idea

Introduction

Smarterly aims to turn the UK into a nation of investors, by promoting the benefits of healthy savings habits via people's employers. We make investing simple, easy and accessible for the mass market - aiming to make buying a Smarterly ISA just as easy as buying a product from Amazon.

Employers promote Smarterly as an employee benefit, to help their staff build healthy saving habits with the convenience of saving directly from their pay, often with a contribution boost from the employer as a more accessible complement to pensions.

Our service is automated and therefore very scalable. We use sophisticated algorithms to analyse over 1,000 funds, build ready-made portfolios and comparison tables and then monitor each customer’s individual portfolio on a daily basis. We own all the tech and have full regulatory permission to handle client money.

We are positioning ourselves with the aim to be the market leader in workplace savings, with key distribution partners in place and many high profile corporate clients.

Intended impact

Financial Advisers are generally not interested in giving advice to people with less than £100k in liquid assets, so the average consumer gets caught in the growing advice gap. Increasingly, employees and the UK Government feel their workplaces should do more to help people with financial education.

ISAs are increasingly seen as an attractive complement to pensions as millennials prioritise getting on the housing ladder and higher earners are restricted by tightening limits on pension savings. As a result, 70% of employers are now considering introducing a workplace ISA (source: Willis Towers Watson, 2018).

Low rates on savings stimulates interest in investing, but choosing investments is daunting and confusing. Smarterly’s platform makes it easy with comparison tables and ready-made portfolios to suit different people’s needs. Our technology designs and monitors portfolios and provides regular alerts to keep portfolios on track.

Substantial accomplishments to date

Smarterly was founded by Ben Pollard, an actuary specialising in risk & investment consulting. Ben went to buy an ISA and was so appalled at the experience he decided to build a platform to appeal to the average consumer.

• In 2016, investment was secured from Unum, a Fortune 500 Company and one of the UK’s largest providers of employee benefits.
• The first corporate client went live in Spring 2017.
• Strategic partnerships were formed with Aon and Thomsons, two of the UK’s largest employee benefit consultants who recommend Smarterly to their corporate clients.
• Phil Hollingdale, a leading figure in employee benefits technology with a track record of building successful tech businesses, joined the company in August 2017.
• We are now a team of six full time employees plus several contractors helping with marketing and on-going product development. Because our fundamental proposition is completely automated we don't expect to need to hire loads of people.
• Seed funding was secured in December 2017 from an enviable list of angel investors.
• We now have over 25 corporate clients including Samsung, OVO Energy and Rolls Royce Engineering.
• With limited sales resource, we've already identified opportunities with 85 organisations who between them employ over 600,000 people.
• We've just launched with a new strategic partner, Neyber, which will put us in front of up to 1m people in the workplace.

Monetisation strategy

We charge a fee of 0.4%pa of the assets under management. In addition to our fees are fund manager charges which are usually around 0.2% - 0.25%pa.

We consider that this is very competitive with other digital investment platforms and substantially cheaper than typically charged by more traditional wealth managers.

Assets accumulate as individuals top up their account over the years, the UK average contribution to an investment ISA is £6,000 per annum. This would equate to revenue of £24 in Yr1, £48 in Yr2, £72 in Yr3, etc… a total of £1,320 over a 10 year period.

Because employers promote Smarterly to their employees our acquisition cost per customer is low and we don't need to invest significant amounts building a consumer brand.

Our goal is to be the "go to place" for workplace savings and to have 250,000 customers on our platform in 5 years. First we aim to perform a land-grab and sign up corporate clients, then we intend to focus on improving take up rates and encouraging customers to transfer existing investments.

Use of proceeds

Funds will be used to accelerate sales and marketing activities to take advantage of our early mover position in the workplace and to further invest in our product proposition.

We have two experienced B2B sales people in our team and need to support them with lead generation via telesales and marketing.

A full-time marketing manager has just been hired to oversee all marketing activities, including digital marketing, with emphasis on engaging with employees to drive take up rates.

We own all of the IP in our tech and our platform has been built in-house with the support of outsourced development teams. We intend to further enhance the functionality of our mobile app and launch additional products and features to make our proposition even more appealing and convenient to use.