Canadian-based robo-adviser platform, Wealthsimple, today announced its withdrawal from the UK investment market, citing “…the decision was a result of a shift in focus to our Canadian business for the time being” according to an official announcement on its website.
Wealthsimple launched in the UK in 2007 and has an estimated AUM in excess of $15bn (£11.3bn) and a combined user base of 1.5m across its US, CA and UK accounts. Just how many of these are UK-based accounts isn’t clear, but what is clear is that there just aren’t enough to be viable for Wealthsimple to operate in the UK.
It would appear that the UK investment and robo-investor market is at ‘saturation point’ and this has almost certainly played a role in the withdrawal of Wealthsimple from the UK in order to focus on its core Canadian market.
And while this is technically a withdrawal, it does reflect one of the pressing problems facing all money and investment apps, namely their sheer number and the intense competition. At Investing Reviews, we are predicting further casualties in 2022 in what is a massively overserved market.
At best we are likely to see some M&A as investment apps join forces to acquire, or even maintain, market share.
Commenting on the news, Investing Reviews CEO Simon Jones said “It’s hard to keep up with the proliferation of these investment apps targeting millennials and other demographics, with Dodl (launching from AJ Bell in 2022) one of the latest to enter the fray. Cutting through the noise in such a furiously competitive space is no doddle at all.
“The UK exit of Wealthsimple should be a shot across the bows to investors. Don’t put all your eggs in one basket and do as much due diligence as possible to make sure the basket you do put your eggs in will still be around in a few years.”
Wealthsimple will transfer eligible accounts in cash over to Moneyfarm, and once the transfer is complete, Moneyfarm will reinvest investors’ cash into a managed portfolio based on their financial goals and risk appetite.
Further information can be found on Wealthsimple’s website here.