wealth tax

HNWs underserved by market, says Wealth Club boss

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High net-worth individuals in the UK are being underserved by the wealth management industry, the chief executive of Wealth Club has said.

Alex Davies told FTAdviser the market is focused on free trading apps and millennials’ investing habits, but nobody is looking at where the bulk of wealth is.

“Firstly, many of the financial services industry’s non advisory brokers seem to be focusing more on first time investors,” he said.

This means in many cases they are dumbing down everything they do, he added, so in effect someone with £1mn to invest is being treated in the same way, and given the same products, as someone with a £100 to invest.

He said there is also an assumption that high-net-worth individuals want a face-to-face service, and nearly all of the industry is geared towards that. 

“Our business, which is completely online, suggests this is not the case,” he said.

“We find that many wealthy people want to make the decisions themselves and want to be fully in control…and if they like what they see they can apply there and then, online, with no pressure and at a time convenient to them.”

The Wealth Club is an online investment service for high-net worth individuals and sophisticated investors that launched in February 2016.

It currently has 42,000 members who receive regular investment information, as well as 7,400 investors through the firm’s platform that offers exposure to tax-efficient investments.

It is also the largest VCT broker with a 19 per cent market share, according to the company.

Davies told FTAdviser he is aiming to float Wealth Club within the next five years, and he wants to build “the next Hargreaves Lansdown”.

The company has a market share of sound 21 per cent, and Ebitda for the year to the end of June 2021 was £2.66mn.

Future VCT investment

Davies said he expects £1bn to be invested in VCTs in the coming tax year, with double that invested in EIS.

“We expect the market to grow considerably over the coming years…VCTs and EIS are a win for investors and a win for the future prosperity of UK plc.”

He said it’s important to highlight that the two products aren’t a “give-away”.

“You get tax relief from the government both to soften the risks of investing in early-stage businesses – which is risky, this is to incentivise people to invest such businesses because they create a disproportionate amount of jobs and economic growth.”

sally.hickey@ft.com

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