Artificial Intelligence driven Marketing Communications
InvestYourWay allows the average investor to build their own, bespoke investment fund. Each fund is personal and offered in real time. InvestYourWay is already offered as a service on IG, giving access to 85k clients. The team includes the CEO of a pan-European equities exchange and the former Global Head of Wholesale Services for Citigroup.
InvestYourWay was created to allow the average investor to build their own, bespoke investment fund and have it managed for them going forward. Every fund is completely personal and offered in real time, putting us at the cutting edge of a new wave in online wealth management.
The InvestYourWay platform was the brain child of Michael Newell, founder and CEO of InvestYourWay. He could see the regulatory shifts within the industry, with a focus on clearer pricing structures and more transparency. From his experience working at the London Stock Exchange and other notable names within financial services, InvestYourWay was created to bring cutting edge technology and custom-built service to those not able to access the high net worth wealth managers.
The service was originally backed by Jack Vensel, the European head of electronic trading for Citigroup, who saw the potential of the platform given his experience within the industry. He was soon joined by Steve Swanson, ex Global Head of Wholesale Services for Citigroup, as well as Mark Hemsley, CEO of BATS EU. BATS Global Markets (BATS) is a leading operator of stock and options markets around the globe.
Following almost 2.5 years of development the company launched it’s offering to the market in October of 2014.
We created InvestYourWay with one question in mind, if you could start again and create the ideal investment management product, what would it look like? To answer this question we looked at how the very wealthy invest.
Generally speaking, from our experience, high net worth clients do not invest like the rest of us. They don’t pick the high street tracker fund that thousands of other clients are using. Instead they have a wealth manager design a completely customised investment portfolio just for them. Investing in the products which pique their interest and managing those investments for them going forward.
The solution we designed enables us to take a client with as little as £2,500 to invest and provide a similar level of service. Clients can choose how much they want to invest, the risk they want to take and, crucially, the products which interest them. This means a client can create a European tracker fund with exposure to gold, or perhaps construct a fund investing heavily in Asia but which also includes the UK tech sector.
After the client has told us what their ideal fund looks like we create it instantly and manage it for them going forwards. Unlike traditional fund managers we do not group clients together or lock them in for any minimum period. It is our view that we should never provide a one size fits all approach.
Our first 6 months have been a very exciting time, with everyone from first time investors to high net worth clients opening InvestYourWay Funds. To cater to this truly international client base we began offering accounts not just based in GBP but also EUR and USD to allow for maximum flexibility.
By starting from scratch we were able to offer a service that we don’t believe is available on the market today. Not only is every fund we build bespoke but it is built in real time, with money being invested within the market in as little as 30 seconds from activation. Withdrawals are equally as quick, allowing clients to access their money when they need to with same day withdrawals.
You can view the average return across all of the many individual funds we manage by going to the following link.
Existing fund managers are limited to running a selection of funds catering to specific needs. Even new online entrants, whilst providing the attraction of being online, often only offer a handful of funds based on a 1-10 risk scale. Whilst simple for the fund manager to administer we believe this to be far from the best solution for the client.
By contrast the custom built InvestYourWay technology allows us to bring to market a solution which is truly bespoke. It was the reason we spent so long researching and perfecting the product. This research has allowed us to construct a service which enables us to run many different funds for thousands of individual clients, all in real time.
Every fund manager needs a broker and InvestYourWay is no exception. However, rather than hide the broker behind the scenes we decided to partner with a leader within the retail finance space and champion them as part of the solution. A FTSE250 company worth over £2.2bn, IG were selected as our broker of choice having been in the business for over 40 years.
IG were sufficiently impressed with the InvestYourWay offering to to agree a deal to include InvestYourWay within their own platform to offer out to their existing client base. This means that InvestYourWay became instantly available to over 85,000 IG clients across Europe at launch, a substantial win for any startup.
During the development phase we worked hard with IG to create the right product set to support our offering. We chose to create InvestYourWay using CFDs (Contracts For Difference). Whilst normally only used for short term speculation we re-designed the CFD product, removing any leverage and margin charges and creating a product which could be used for long term investing. The result was a platform which allows each client to have their own unique fund which they can edit in real time, all made possible through the use of CFDs which are backed by one of the largest companies in the UK.
Given our pan European reach we have already begun work to localise our content for each of the main languages across Europe which will help us to expand further into each of the countries we cover. Additionally we have begun the work to bring our solution to market in other regions which, combined with product enhancements, will allow us to continue to expand the business at the current rate. The next large product release for InvestYourWay will be a personal pension (SIPP) product which we aim to bring to market later in 2015.
The UK investment market is huge. Firms registered with the Investment Managers Association (IMA) were managing £5 trillion as of December 2013 with that number set to increase, having already increased from £4.5 trillion in 2012.
Whilst InvestYourWay are a UK based company our pan European reach gives us access to a much wider pool of assets. In fact in the first 6 months over 30% of our client base have come to us from outside of the UK. This only looks set to increase as we provide more localised versions of our product.
The market has been heavily disrupted by regulation in recent years, in particular the Retail Distribution Review. Such regulation, combined with the increasing use of technology and higher expectations from end clients, has seen the introduction of a number of new companies into the retail finance space. From crowd funding to crowd lending, from currency transfer platforms to online investment managers. This wave of change in online investment management is already in full swing in the US with companies like Wealthfront managing in excess of $2bn in just a few short years.
Where most startups must begin marketing from scratch, our pan European deal with IG Group has meant that their existing 85,000 clients across Europe can access our product in just a few clicks. This creates a very low barrier to entry for this large set of potential clients. Not only is InvestYourWay publicised via the IG website but it is also available directly from within the IG platform.
Competition in this space in the US is hotting up rapidly with companies such as Wealthfront and Betterment leading the market, though each are still relatively early on in their growth story. Across Europe a few platforms have started to spring up with the most notable being Nutmeg who are based solely in the UK. Each of these platforms follow a similar theme of offering a very limited set of 10 or so funds and allocating clients based on a simple risk scale. By contrast we feel that our superior technology, bespoke funds, pan European reach and large industry partner leave us well placed to compete within this market.
Michael Newell, Founder and CEO
Prior to launching InvestYourWay Michael was European Head of Business Development for BATS Chi-X Europe, one of the largest equity trading venues in Europe. With a career in financial services spanning over 10 years, he has held positions at prestigious institutions including the London Stock Exchange. He holds the CFA Investment Management Certificate (IMC) and is a member of both the Chartered Financial Analyst (CFA) Institute and the Chartered Institute for Securities and Investment (CISI).
Angela Bryant, Compliance
Angela handles day to day compliance matters for InvestYourWay and has over 25 years experience within the financial services industry. She is also a member and director of the Association of Professional Compliance Consultants (APCC), working to develop the profile and professional standards of compliance consultants and interacting with the FCA on issues where they believe their influence and experience would be beneficial to the industry.
Mark Hemsley, Investor and board advisor
Mark is Chief Executive Officer of BATS Chi-X Europe, the largest pan-European equities exchange and the European arm of BATS Global Markets. Under his leadership, BATS Chi-X Europe became a Recognised Investment Exchange (RIE) in May 2013.He has also served as a LIFFE board member and ran LIFFE Market Solutions as well as being a senior technology manager for a number of investment banks.
Jack Vensel, Investor and non-exec director
Jack holds the position of Non Executive Director for InvestYourWay, having previously been Global Head of Wholesale Services for Citigroup. Prior to Citigroup Vensel ran sell side sales for ATD, one of the pioneers and global leaders in automated trading. Previously he was also Executive Vice President of Island ECN, now known as NASDAQ’s INET. Jack holds an MBA from Harvard Business School.
Steve Swanson, Investor and non-exec director
Steve was previously the Co-Head of Citi’s Global Electronic Trading Products and Services group. Steve joined Citi with the acquisition of Automated Trading Desk (ATD), a trading technology firm he co-founded in 1988. Steve is actively involved with a range of startup companies across the globe.
Key sales drivers: Investors Gold (IG) cross sell opportunity to existing client base
USE OF FUNDS:
Concentrated marketing campaign, primarily focussed on digital channels
Increasing staff from initial build out team
EXPENSES AND PROFITABILITY:
Gross profit is at 99% given the low per client direct cost
The business is able to operate with a comparatively lean cost structure given the relationship with IG and because it owns and develops all its own software
EXISTING DEBT OR EQUITY INVESTMENTS:
Directors’ loans: There is a £10k loan from Jack Vensel and £1.5k from Michael Newell at 0% with no fixed repayment schedule which will be paid down when funds allow
Equity: Around £270K in equity to date.
Next round: A second fund raising (of £500K) will occur in the 16/17 financial year to further fund the early marketing push to help get the product established
The company has £78k in cash on account at time of writing
InvestYourWay is a scalable business whose unique partnership with IG provides us with the opportunity to expand into other regions with low overheads.
We see two main exit routes for investors. Firstly we believe that the company has a strong potential for a public listing and that the board have the necessary experience and expertise to bring such an offering to the market.
Additionally we expect to see trade sale offers over the next few years as this industry grows and the incumbents struggle to build solutions to meet the needs of their customers. With valuations in the US for companies such as Wealthfront and Betterment already exceeding $500m+, InvestYourWay is well placed to achieve a favourable valuation within the pan European market place.
Receive an InvestYourWay mug, all in black and emblazoned with the best investment advice you will ever receive – “Don’t be a mug. #InvestYourWay”. We know, genius.
Why would you ever want more than a free mug we hear you ask? Well invest over £500 and receive a fee credit voucher worth £100 entitling the holder to receive £10k managed free for a year on the InvestYourWay platform or £2.5k managed free for 4 years (or any similar combination). Keep the gift for yourself or pass it on to a friend, it’s up to you.
For those who invest over £1k InvestYourWay will, in addition to all prior rewards, offer something unprecedented. We will provide completely free use of the InvestYourWay platform until midnight on December 31st 2018. This means you will be able to invest any amount, in any number of custom built InvestYourWay funds, completely free of any standard fund management charges.
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