The age of the internet has disrupted almost every sector, from retail to journalism. The financial industry was slower than most to make the most of the phenomenon but in recent years has caught up fast – Fintech start-ups are beginning to relentlessly challenge the traditional banks, providing consumers with cheaper, easier and quicker alternatives.
Robo-advisors
Moneyfarm
Robo-advisors offer online advice and guidance for investments and, depending on the platform, execute it as well. They typically charge less than half the fees of traditional brokerages and their low-cost, simple approach to investing has earned them a real name for themselves.
Moneyfarm was launched in the UK in February after gaining traction in its home market of Italy. It was founded by Paolo Galvani and Giovanni Daprà in 2011 with a simple mission: to make low-cost, low-stress wealth management a reality for everyone.
It allows customers to build an investment portfolio online after answering a simple questionnaire to find out goals and risk tolerance. The site has six portfolios made up of ETFs, which offer full transparency of the assets that make up a fund and have low management fees and low minimum investment levels.
Comparison sites and platforms
Investment Superstore
The platform was created to help tackle the ‘financial advice gap’, which according to the FCA affects 16 million people in the UK. Until recently, receiving real investment advice has seemed impossible for younger or lower net worth individuals – many Financial Advisors have minimum asset requirements of £500,000 or above, and charge 1-2 percent for their services.
Unlike robo-advisors, the Investment Superstore doesn’t recommend any investments or provide dealing services; it provides investors with the means to make their own informed decisions of which services best suit their objectives. It offers comparison tools and tables, research packages and tips and social stock tipping to give investors the information they need to make informed decisions as to their investment futures.
Digital alternatives
Habito
Habito is the UK’s digital mortgage broker, which uses technology to bring the mortgage application process into the 21st century. Simple, fast and honest, it ensures home owners get the best mortgage on the market for the first time.
It has just raised £5.5 million in Series A funding led by Silicon Valley-based Ribbit Capital, with participation from existing investor Mosaic Ventures. Habito plans to use the new investment to accelerate its rapid growth, enhance the technology behind its award-winning service and transform the outdated mortgage industry for millions of homeowners and new buyers across the country.
Daniel Hegarty, Founder and CEO of habito, said: “The amazing response we’ve received from customers has proved what we always knew – there’s a huge opportunity to make the experience of getting a mortgage simpler, more transparent and a lot less painful. The industry has suffered from a lack of innovation for decades and the outdated, paper-based manual processes aren’t fit for 21st century homeowners.