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Robo-adviser Moneyfarm expects profitability by 2019

European robo-advice firm Moneyfarm targets profitability in two years as its customer base grows rapidly.

Robo-adviser Moneyfarm expects profitability by 2019

European robo-adviser Moneyfarm expects to become profitable by 2019 as it looks to bring to market new products in the coming months.

The Italian firm filed its 2016 financial statements this morning, announcing expansion to 10,000 customers in the UK and £260 million in global assets under management (AUM), which renders it the second largest robo-adviser in Europe.

The firm has reported total losses of £6.4 million in 2016, but claims this was in line with its agreed targets. Most of its expenditure came through developing its own technology and hiring the team behind it, along with its marketing department.

Moneyfarm has also raised $30 million (£22.3 million) in funding and expects to be profitable by 2019. 

In the first half of 2017, the company has doubled its customer numbers and is adding 10% to its AUM each month on average.

Earlier this year, Moneyfarm launched its first business-to-business partnership with Allianz Global Investors, and has multiple product launches in the pipeline. The first will be a Sipp, launched at the beginning of Q4 on the Embark platform. 

Chairman Paolo Galvani (pictured) said: 'Customer growth is due to outstrip the 209% we anticipated at the start of 2017, and we’re confident we’ll continue to add more than 60% a year for the next three years.

'Our ambition is to build a digital wealth proposition that could offer the whole spectrum and financial lifecycle, from accumulation to investment and then pension, but that can be offered to anyone independent of the amount they have to invest.'

The digital wealth manager has operated a hybrid model between a human and computer interface since it started in 2012. In Italy, it has already begun assisting customers with financial planning and portfolio reviews, and has been working with the Financial Conduct Authority (FCA) Advice Unit to transfer this offering to the UK market.

Galvani told New Model Adviser®: 'Part of the FCA's Financial Advice Market Review has been looking at how technology can enable solutions for people that have been turned down by advisers due to the lack of a scale economy.

'If you look at it from this perspective, we have been offering something that simply wasn't there, rather than challenging IFAs, so I think we can complement the advice profession in that sense.

'Open banking will also bring huge opportunities for future business growth, as APIs (application program interfaces) will enable us to deliver increased advice capabilities via our platform.

'The speed of growth in terms of clients in the UK has been astounding. In just 15 months, we are already way ahead of our client base in Italy, where we have been operating since 2012. It shows that people here are really open to embracing innovation and technology.'


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