Introduction to WealthSmart

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To most people, investing has long been perceived as an insurmountable task. But why? The first reason often cited is hassle. This pain point was resolved by Nutmeg a few years ago, when, for the first time in the UK, investing online in a few clicks became a reality. The second reason frequently mentioned is insufficient funds. MoneyBox fixed this in the UK when they launched a savings app where users could roundup a purchase and invest their change - thus helping users slowly begin to build up savings starting with small amounts. Lastly, a major reason preventing people from investing is the risk of loss. In other words, when you invest money, you may get back less than you put in, or in other words, lose your money.

We created WealthSmart to address all these problems with one simple account. So how does it work and why are we different from the other providers in the space?

Loss averse

Our biggest differentiator is how we invest. Most services today invite users to answer a series of risk measurement questions and allocate them to a “risk profile” bucket. Each bucket corresponds to a portfolio of investments managed by a professional in line with a predetermined level of risk.

At WealthSmart, when a user opens an account, we invest her money in the investment with the lowest risk, yet still capable of surpassing the return that a typical bank account generates. In other words, our primary concern is to prevent the risk of loss during the early stages of being invested, while still generating a small profit. Once the investments generate a profit, we gradually shift the portfolio into higher risk investments capable of generating more profits over the long run.

Think of traditional investing services as a manual gearbox: you pick a speed you feel comfortable with, but you’re stuck at that speed no matter how profitable your portfolio is or how good/bad the market conditions are. WealthSmart is like an automatic gearbox: we start you off at the lowest speed, as your generate profits we gradually shift you into higher speeds, should the market hit a downturn we shift you back down to lower speeds. In short, we throttle the growth of your portfolio depending on market conditions or how profitable your investments have been. Read more on how this works in practice.

Only pay when you profit

In traditional services, irrespective of how their investments perform, the user always pays for the service. This means the service providers aren’t incentivized to do everything in their power to ensure the risk of loss is kept to a minimum. For this reason, we only charge our customers when their accounts are profitable. This might be a small step, but we’re hopeful others will follow suit and help reshape our industry.

Sustainable

Climate change, shifting demographics and the technology revolution are reshaping our planet. Companies able to adapt to this change will be more successful in attracting customers, growing their business and having a positive impact on the planet. Our approach aims to provide better returns over the long term by incorporating a climate ‘tilt’ to our customers’ investments. This means having greater exposure to companies that are likely to benefit from the transition to a low-carbon economy.

Small investments welcome

We allow users to open accounts with as little as £100. Services like ours, and those to follow, must put an end to the long-standing belief that a large amount of money is needed to invest. No matter how little, just getting started is the most important step. Holding even a tiny amount of investments is the best way to get comfortable with the whole process. As your savings grow you will find yourself making much wiser decisions with your earnings.

 

We’re at the very beginning of a long journey to change our industry and align its interests with those of its customers. Along the way, our proposition will evolve and adapt to the many needs of our customers. So if you feel inspired and like or dislike any aspects of our proposition, please leave a comment under this article. We take feedback very seriously and will make sure it’s taken into account as we decide what features to prioritise. Please note, WealthSmart is presently in beta stage: this means we’re giving people who sign up to our waiting list access to the service as available slots become available. Click here to sign up to are quickly growing waiting list.