Wealthify

Market

Target market

Cash ISA Subscribers - Around 13M people a year invest in an ISA of which currently around 80% choose a Cash ISA as opposed to a Stocks and Shares ISA (aka Investment ISA). That's about 11M people a year who invest in a Cash ISA who are prospects for Wealthify, because they could be expecting more from their money.

Cash - £700bn is held in cash savings accounts in the UK earning tiny interest rates and we aim to convince consumers to invest a proportion of this cash with Wealthify.

Existing Investors - DIY investors who use an online trading platform, or who hold money in a Stocks and Shares ISA. We expect to persuade a small but increasing share of these customers to shift to Wealthify, driven by recognition that having a trusted third party make the decisions is better than DIY investing.

Characteristics of target market

This market has become known as "Robo-advice" or "Robo-investing". The term “Robo” reflects that fact that most services use a high degree of software and automation, but possibly also that most services prefer passive investment strategies, which can be managed using automation at low cost.

The concept of Robo-advice originated in the USA about eight years ago when services such as Wealthfront and Betterment were launched. These two companies now manage approximately $7 billion, and the US Robo market is now valued around $60bn. One study by A.T.Kearney predicts that money managed globally by Robo-advice services will rise to $2.2tn by 2020.

Although Wealthify falls under the Robo-advice heading, it offers its service on a non-advised basis. We make no recommendations to our customers and we do not offer them advice. This means that our business has a lower risk of mis-selling to customers and has lower operating costs, due to not needing to charge for customer-facing advisers.

Marketing strategy

The founders and team at Wealthify have considerable experience of digital marketing and we intend to leverage this expertise to bring to bear online marketing to acquire customers. The strategy includes use of SEO, PPC, social media, affiliation, email marketing & online display advertising.

In addition, the CEO has extensive business relationships with websites in the UK that already attract high volumes of financial services traffic. We seek to leverage these relationships to acquire high volumes of customers on favourable terms.

We have already conducted a successful public relations campaign since launch, gaining significant coverage in the national media. We intend to continue this successful approach and expect to gain increasing coverage in the personal finance sections of the mass-media in coming months and years, as Robo-advice becomes more well-known.

As trust in our brand and awareness of Robo-advice grows amongst consumers, the company will also consider above-the-line marketing strategies, so long as a low average cost of acquisition can be maintained.

Competition strategy

Wealthify has a single, clear proposition which stands ahead of the competition, based on its simplicity and its focus on the mass-market. Competitors are mostly targeting affluent customers and fighting each other to win them.

There will be numerous new entrants to the Robo-advice sector. However, the market is large and expanding and we believe that the market will accommodate competition. The breadth of propositions and companies will drive the education and awareness required to support rapid expansion.

Wealthify has a number of USPs that will enable it to acquire and retain customers more effectively than competitors:

• The simplicity and ease-of-use we have delivered through the design of the proposition, and in particular its elegance on the mobile platform, positions us to lead the market.
• We offer the lowest minimum investment amount of £250 for a fully diversified investment plan.
• We have built in a social engagement mechanism, known as Wealthify Circles, which allows customers to introduce friends and acquaintances for a shared reduction in fees.
• Automation and Scalability: we have engineered our systems from day one to cope with mass-market volume. No paperwork or face-to-face meetings required.

We recognise that trust, reputation and performance will be paramount to our continued competitive success and we are working tirelessly to ensure success on all these fronts.

Our competition will consist of new entrants and incumbents. We believe that incumbents are not driven to push Robo-advice because it undermines existing revenue streams and they have a wide array of services amongst which their Robo-advice offering gets lost. The key opportunity for Robo-advice is the mass-market, expanding the market for investing. We believe the leader will be a single-purpose brand that establishes itself as the go-to name for British consumers.