DIY investment assets fall by 13% in Q1 2020 but accounts rise to an all-time high
Consumer financial website Boring Money has completed an analysis of the UK’s DIY investing market finding that DIY platform and robo assets fell by 13.4% in Q1 2020 as global stock markets crashed, dragging portfolios down. The diversified nature of portfolios provided some cushioning in falls – by comparison, the FTSE 100 fell by nearly double, shedding 24.8% in the first three months of the year.
- The bigger brand platforms fell by a range of 12% to 20%.
- The average fall was 15.1% across the 6 largest providers.
- Robo advisers were slightly more insulated from AUA declines and their change in assets ranged from 14.4% growth to a fall of 5.9%.
- Vanguard was a notable exception to the decline in assets, posting growth of 14% in the quarter to reach £2.6 bn in UK assets from DIY investors on their proprietary platform.
Fidelity and PensionBee join Boring Money’s Best Buys in 2020
Consumer financial website Boring Money has completed its annual analysis of the UK’s DIY investing market, announcing the winners of its Best Buy ratings. Six providers were awarded a Best Buy rating for ISAs and 5 for pensions.
- These ratings are awarded from a unique blend of customer reviews and in-depth reviews by Boring Money of the secure sites and online experience.
- They are based on the test accounts held at over 30 investment platforms and robo advisers.
- Factors include costs and charges, call centre answer times, service, communications sent, investment research, the website experience, quality of any app and also the ratings and reviews from over 2,500 consumers.
Direct online investors in UK more than double over three years
Consumer financial website Boring Money has today released figures showing that the assets under administration (AUA) for the UK direct online investing market hit £260 billion as at 31 December 2019, an increase of 20.7% over the year.
The number of active customer accounts in the UK has also increased to 5.9 million, up from 5.1 million the previous year.
- The impact of a growth in smaller accounts has been to reduce the average account size by over £15,000 over the last three years.
- Q4 figures indicate a slower rate of growth for Hargreaves Lansdown compared to some key competitors, such as AJ Bell Youinvest.
- The major demographic change is in relation to age – the average age of online investors has fallen from 52 in 2016 to 48 today.
Meet the Sustainable Savers
Boring Money has today launched its latest ‘Money Tribe’ – Sustainable Savers. New content pages help readers to navigate the confusing maze that is this rapidly growing investment style, informing, sharing reader stories and pointing to recommended products by research houses, platforms and investment experts.
Research conducted with 2000 consumers revealed that:
- 74% of advised investors would welcome a conversation with their adviser on ESG investing.
- 22% of fund investors report holding ESG funds today and plan to invest more.
- 25% of fund investors do not hold ESG funds today but plan to invest in them over the next 12 months.
AJ Bell Youinvest and MoneyFarm offer best performing investment solutions to DIY investors over a 2 year period
Research by consumer investment site BoringMoney.co.uk, reveals best performing investment solutions for DIY investors over a 2 year period.
- We tested all major online investment providers which offer investors ‘ready-made’ multi-asset funds or portfolios.
- Boring Money opened 19 accounts in the first week of January 2018, buying a medium risk investment fund or portfolio with an initial investment of £500.
- The contributing factors to any relative and short-term underperformance were charging structures, fees, and asset allocation.
- Huge difference in ‘medium risk’ solutions – average equity exposure falls 15% in just 1 year.
Financial Communications Are Broken
A white paper by consumer investment site BoringMoney.co.uk, launched today, criticises current financial communications and offers up some suggested alternatives and improvements.
- When presented with cost disclosures, only 23% of fund investors could accurately work out what they would pay.
- Only 9% of fund investors say they are happy with the communications they receive.
- Just 31% of fund investors give themselves a confidence score of higher than 6 out of 10 when it comes to selecting a fund.
- 37% say their benchmark for investment funds is cash.
Financial advisers underestimate consumer interest in ESG
New research from consumer website and insights company BoringMoney.co.uk reveals that, despite confusion around terminology and definitions, a clear consumer appetite for ESG is underestimated by advisers.
- Awareness is low - even when presented with 5 different options, only 21% of consumers picked that ESG stands for environmental, social and governance.
- Yet once articulated, appetite is strong. 72% of fund investors would value a conversation about ESG – but only 30% of advisers think clients would value this.
- Women consistently report a higher interest in ESG investing than men – 49% of women investors plan to invest more in ESG funds over the short-term, compared to 45% of male investors.
- If presented with a range of investment options, including various ESG approaches and one which simply prioritises returns above anything else, 22% of male investors opt for pure returns compared to 13% of female investors.
HSBC, Aviva, Lindsell Train and Vanguard consistently top investor ratings for value in 2019
Consumer investment site BoringMoney.co.uk has today revealed the 10 asset managers judged to provide 'best value' by investors.
- According to research from the company’s Ongoing Value Testing in 2019 HSBC, Aviva, Lindsell Train and Vanguard have ranked consistently in the top 10 companies this year.
- This year, investment advice and research company BoringMoney.co.uk has asked over 5,000 retail investors what they value from asset managers, and asked them to assess and rate the value provided by their chosen asset manager(s). This is tested on a quarterly basis with investors, tracking movements and changes in response to market and provider-specific news.
- In September, a survey of 2,000 fund investors identified the following 10 groups as those which deliver the best value to customers, as rated by customers themselves.
New Charges Calculator Tackles ‘Shocking’ Lack of Clarity in the Investment Industry
Consumer investment site BoringMoney.co.uk has today launched an independent fee calculator which provides investors with a single simple £ fee across 20 leading platforms and robo advisors.
- According to research from the company’s 2019 Online Investing Report, two thirds of investors are not fully confident they understand what fees they are currently paying.
- Additional Boring Money testing shows that even those who feel confident often miscalculate in reality, as a result of complex fee structures and ambiguous additional charges.
- The Investment Fee Calculator enables investors and would-be investors to compare fees across 20 leading investment providers. In an industry first, the calculator also pulls in both customer ratings and the Boring Money rating so that customers can choose whether to focus on price alone, or take a broader view of the service.
New Survey Shows Trust in Best Buys Lists is Low
According to a survey conducted by independent savings and investment advice website BoringMoney.co.uk, 68% of respondents rate their confidence in getting better returns using a fund Best Buy List vs going it alone at 6 or less out of 10.
- Over 25% of people said their confidence in these lists was 2 out of 10 or lower.
- This lack of confidence – measured on a scale where 0 is not very confident and 10 is very confident – was reinforced by responses showing a broader lack of trust in the investment industry.
- 77% gave a score of 6 or less for the for the question “Do you trust the investment industry? (on a scale where 0 is not at all and 10 is Yes, definitely).
Investment ‘Best Buys’ lists under pressure, but research shows they are a growing source of help for millions of investors
According to new research from independent savings and investment advice website BoringMoney.co.uk, there is a growing market for ‘ready-made’ investment solutions such as robo advisers or multi-asset funds, as well as the increasing influence of the recommended fund lists for DIY investors.
The role of Best Buys lists is being challenged following the suspension of the Woodford Equity Income fund, a prominent feature of the Hargreaves Lansdown Wealth 50 list until last week.
- As at Dec 2018 there was £33 billion invested in ‘ready-made’ solutions on DIY investment platforms.
- Based on data provided by leading investment platforms, Boring Money estimates that that 31% of total DIY platform inflows were channeled to those funds on the ‘Best Buy’ recommended lists in 2018.
- Gross sales of funds across the major investment platforms reveals between 9% and 40% of inflows are directed to the funds which appear on Best Buys’ lists.
Jargon kills consumer confidence as investment industry shoots itself in the foot
Latest research from consumer investment site BoringMoney.co.uk, found only 14% of consumers feel confident in opening an investment account (scoring themselves a 9 or 10 out of 10 for confidence).
This figure compares to 41% who feel very confident in opening a savings account, and 52% who feel very confident in choosing a mobile phone provider.
Surprisingly, confidence is not much higher amongst people who already invest.
- Just 22% of investors feel confident about opening an investment account.
- When it came to fees, only 34% of consumers who hold stocks & shares ISAs, investment accounts and/or share trading accounts felt very confident they know what charges they are paying.
- A worrying 22% of investors scored themselves 0-5 out of 10 when it came to confidence their investments are the right ones for them.
- 10% of assets on all DIY investment platforms and robos are in cash compared to 7% this time last year – suggesting a lack of confidence in the market.
Online investing market stalls in 2018, in line with weaker Q4 markets, as the fintech challengers fail to ignite
Boring Money research reveals that fourth quarter falls in the stock markets wiped out early growth in the online investing sector in 2018.
Analysis from BoringMoney.co.uk's Online Investing Report 2019 reveals that the total value of assets under administration (AUA) has grown just 0.5% over the past year, from £204.6bn at the end of 2017 to £205.5bn at the end of 2018.
The independent research and consumer insight consultancy reveals that although the combined impact of gradual customer growth and rising markets saw gains in the first 9 months of 2018, these gains were wiped out by falling markets in Q4. Assets fell by 8.1% between 1st October and 31st December 2018.
Average age of customers using online investment platforms has fallen over the past 5 years and is now 49. Other notable trends are the uptick in mobile trades to circa 15% of all trades where available.
The top three companies by AUA are:
- Hargreaves Lansdown remains the one to beat with a seemingly unassailable market share of 42% - which has been largely consistent for the past few years.
- Interactive Investor remains in 2nd place with 9% share, although including the AUA of Alliance Trust Savings gives a combined share of 13%.
- Fidelity holds the third spot with 7.9% share.
Boring Money’s mid-risk investment test accounts reveal huge disparity in how your money is managed
Experiment from independent savings and investment advice website BoringMoney.co.uk reveals what has happened to their £500 investments exactly 1 year on.
In the first week of January 2018, BoringMoney.co.uk invested £500 in the medium risk portfolio offered on more than 20 different platforms and robos. A year later in 2019, the Boring Money research team looked at what happened to the £500 invested.
Boring Money conducted this test in response to consumer research and feedback that investors want to be able to compare performance net of all charges, reported as a £ outcome.
- Falling markets meant that all portfolios were down but – after charges – the balances ranged from £361 to £481. This is a net fall of 4% - 28%.
- For perspective, not including any charges, the FTSE 100 fell by 12.75% over the same timeframe.
- The best performers over the 12-month period were Wealthsimple, Wealthify then IG Smart Portfolios which had £481.21, £480.73 and £476.85 left in the account respectively.
- Excluding providers with fixed or minimum charges, the worst performers over the 12-month period after fees were Hargreaves Lansdown, Charles Stanley Direct and Moneyfarm which left clients with £454.81, £462.26 and £462.40 in their accounts.
- These all-in-one fund solutions are increasingly important on DIY investing services. Own brand funds and portfolios account for circa 7% of all third-party fund platform assets.
DIY Investors could miss gains of up to 11.3% a year
Millions of investors that build their own portfolios suffer from seven bad habits, according to research by independent savings and investment advice website BoringMoney.co.uk and Quilter, which can lead them to miss out on 11.3% of potential gains a year.
The research surveying over 7000 UK adults and over 200 investors revealed seven habits that can reduce their return or increase their risks, sometimes both. The typical unadvised investor takes a huge amount of investment risk and gets very little back.
Nine in ten (91%) UK adults aged 18 or over (46.5 million people), have not received professional financial advice in the last 12 months, according to a report from consultancy firms Ignition House and Critical Research to inform the Financial Advice Market Review. Of these, two-fifths (39%), or 18.2 million people, have £10,000 or more in savings and/ or investments and, therefore, might have a need for advice.
The seven habits that can reduce investment return or increase risk are:
- Holding too few shares, or being ‘undiversified’
A bias towards the UK, ignoring the opportunities in overseas markets.
- Lack of asset allocation, using only shares when other assets could help.
- Overtrading, fiddling around the margins of their portfolios.
- Panic selling, ditching all their holdings at the first sign of trouble.
- Not rebalancing, losing out on the proven ‘Rebalancing Bonus’ returns.
- Lack of pound cost averaging - Pound cost averaging is a technique where you make investments on a regular basis and therefore average the price you pay for the total investment over time.
Nutmeg launches ethical portfolios as the race for the green pound gathers pace
The UK’s most established robo adviser Nutmeg today becomes the fifth UK robo adviser to offer an ethical option. Its launch is the latest sign that a formerly niche investment style is moving centre stage. According to independent financial research and consumer insight consultancy BoringMoney.co.uk, activity on the supply side is matched by demand on the consumer side, with particular interest from younger investors and women.
According to data from Boring Money’s Ethical Investment Report, across the 4 robo advisers which offered ethical portfolios to UK investors as at October 2018:
- The average age of an ethical portfolio holder with the robos is 35 – which is 4.5 years younger than average portfolio holder.
- The average robo customer is eight years younger than the average ‘traditional’ customer (41 years old vs 49).
- Women are more interested in ethical investing than men – 32% say it is very or extremely important to them compared to 14% of men.
1 in 3 new DIY investment accounts opened is with a robo adviser
New research from independent research and consumer insight consultancy for the investment industry Boring Money reveals that customer acquisition in the robo advice sector is outstripping that of bigger online investment platforms.
- Q3 2018 saw the online DIY investment market in the UK hit £223.85 billion.
- This is an increase of 2.7% over the quarter and 15.4% over the last 12 months.
- Customer DIY investment accounts are up 22% for the last 12 months
- By way of comparison, the FTSE 100 fell by 0.7% over the quarter and grew by 6.1% over the year.
Maturing robo advice market delivers a smoother path for investors
As the robo advice market in the UK nears the £3 billion mark, the maturing sector has more meaningful track records and is offering investors a less bumpy ride, according to research by consumer advice site BoringMoney.co.uk.
According to independent financial advice site Boring Money’s quarterly analysis of nine of the UK’s leading robo advisers, all but two of the higher risk investment portfolios outperformed the FTSE 100 over the past 12-month and 24-month periods. These results also came with less risk than the FTSE – and the reassurance of over two years of track records.
Top line results reveal:
- Seven robo advisers can now show at least a 2-year track record for some portfolios.
- Over the past two years, if we look at the higher risk portfolios, from a starting £5,000 investment, the average robo adviser returned £5,895 compared to the FTSE 100 which grew to £5,862.
- Averaging the performance of these robo advisers; high-risk portfolios returned 17.9% over the two years analysed, followed by 10.2% for medium risk and 2.3% for low risk portfolios. In comparison, investing in a passive FTSE 100 tracker would have returned 17.2% over the same period and a leading easy access cash ISA would have paid 2.3%.
- The level of risk which investors are exposed to in terms of volatility is significantly reduced if assessed in terms of monthly swings in valuations, or monthly drawdowns in comparison to the FTSE 100.
Women lead cautious consumer interest in ‘ethical’ investing
Independent financial advice site BoringMoney.co.uk shares new insight into the British public’s sentiment around the ethical investing trend in the inaugural Boring Money Ethical Investing Report.
According to data from Boringmoney.co.uk:
- General awareness is low - 36% of the public have heard of ethical investing.
- Only 2% of people are aware of ESG (Environmental Social Governance) investing, which refers to the three central factors in measuring the sustainability and ethical impact of an investment in a company or business.
- Women are more interested in ethical investing than men – 32% say it is very or extremely important to them compared to 14% of men.
- Uptake mirrors the research - data from today’s robo advisers offering ethical portfolios confirms a substantially higher proportion of women choose the ethical choice than the standard options.
Robo advisers on track to become “mainstream”, say speakers at Boring Money Annual Conference
Speaking at the 3rd Boring Money Annual Conference, Toby Triebel, CEO Europe at Wealthsimple said robo advice was on track to reach 5-10% penetration of the overall online investing market. This would put it firmly in the mainstream, with the key drivers consolidation, partnerships with traditional advisers and established financial services brands, plus an ongoing push for financial education.
Gender investment gap of £100.8 billion in the UK
The debate around how to increase female engagement with the investment market continued to rage at this year’s Boring Money Annual Conference, which tackled how the investment industry can improve customer engagement and communications.
According to data from Boringmoney.co.uk:
- Only 12% of women hold a stocks and shares ISA vs 19% of men.
- On average, their balance is just £22,907 compared to £35,616 for their male counterparts.
- 20% of women self-assess with a confidence level of 0 out of 10 when it comes to opening an investment account, compared to 13% of men.
Nutmeg delivers highest robo returns to Q2 18
Boring Money shares new insight, analysing data from eight of the UK’s leading robo advisers (as at 30 June 2018); assessing their level of risk and performance over the last 12 months.
- The top performing robo portfolios analysed were Nutmeg’s Portfolio 10 (7.92%), IG’S 5 Aggressive (7.46%) and True Potential Investor’s Aggressive Portfolios (7.24%)
- Investment in the FTSE 100 would have reaped higher rewards at a return of 8.4%, however, this would have come with much higher volatility and price swings
- On average, higher risk portfolios returned 6.38% in the 12 months leading to 30th June 2018
- While the FTSE 100 would have provided better returns than any robo it also showed the most volatility, with a maximum drawdown of 7.28% vs just 4.77% on average for the high risk robo portfolios.
Wealthify joins the growing ranks of the Ethical Robos
Today Wealthify has announced the launch of a range of ethical portfolios, joining the growing ranks of UK robo-advisers which offer ethical investment options.
- 4 UK robo-advisers now offer an ethical investment option – Moola, PensionBee, Wealthify and Wealthsimple
- Recent research by independent financial advice site BoringMoney.co.uk found that 74% of investors are “interested” or “potentially interested” in ethical or socially responsible investing.
- Younger investors report more interest – over 55% of under 45s said they were interested compared to only 23% of over 55s. The environment topped investors’ concerns, though tobacco was mentioned most as the sector that investors would seek to avoid.
Charles Stanley Direct increases charges despite global downward trends
Today Charles Stanley Direct has announced an increase in its lowest tiered price, from 0.25% to 0.35%. The price increase will take effect from September 10th this year. The platform has historically been one of the cheapest mainstream open architecture platforms in the UK.
Online DIY investment predicted to grow by over £100bn in five years
UK platform and robo chiefs predict an increase in assets of over £100 billion over the next 5 years.
A survey of the CEOs and Directors of leading DIY investing platforms and robos suggests that today’s DIY investing market will grow by over £100 billion over the next 5 years. This is a near-50% uplift on the £209bn the industry currently holds.
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Anorak scoops the people’s prize in the inaugural Fink Tank Dragon’s Den
A new app designed to make buying life insurance quicker and simpler triumphed on the Fin-k Tank ‘Dragon’s Den’.
Four groups went head to head at our inaugural Fin-k Tank conference, judged by a panel of experienced FinTech investors.
FCA promises flexibility on Fintech regulation
The UK regulator has promised an ‘open mind’ on regulation of Fintech. Anna Wallace, Innovate Head of Department at the Financial Conduct Authority said it was adapting its processes to assess this fast-moving area, labelling it a ‘massive strategic priority’.
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Hargreaves Lansdown’s McPhail says DPP’s pension dashboard won’t work in Fintech age
Tom McPhail, head of retirement policy at Hargreaves Lansdown, laid down a challenge to the government’s flagship ‘pensions dashboard’ policy, saying the database may struggle to integrate with disruptive new Fintech providers.
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True Potential Investor pips Charles Stanley Direct and Nutmeg to take highest customer rating in new Boring Money Best Buy Tables
True Potential Investor customers give the direct investment, ISA and pension provider a 91% recommend score – the highest score
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AJ Bell Youinvest Dominates in Inaugural Consumer Investment Awards
AJ Bell Youinvest scooped Best Online Investment Provider and Best Online Pension Provider at last night’s inaugural Telegraph & Boring Money Consumer Investment Awards.
The wins accounted for two of the six trophies awarded last night following voting by the readers of The Telegraph and Boring Money.
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Diversified returns outperformed FTSE 100 across 2017
- In the UK robo adviser assets have grown from £1.6bn in September 2017 to an estimated £1.8bn at the end of 2017
- Returns show that on average the robos diversified portfolios of equities outperformed the FTSE 100 in 2017 and did so at a lower risk
- The top performing robo portfolios analysed were Scalable Capital’s 25% (which returned 19.27%), Nutmeg’s Portfolio 10 (which returned 13.41%), followed by evestor’s Portfolio 3 (which returned 12.72%)
Robo advice grows by 133% over 12 months
- Total non-advised AUA was £192.4bn as at Q3 17
- Robo advisers have £1.7bn AUA
- Average account sizes for robo providers are £20,500 compared to an industry average of £52,500
Boring Money has analysed robo-adviser returns for the 12 months to the end of September 2017 from 6 of the major players in the evolving UK market, including Nutmeg, Moneyfarm and Wealthify.
Portfolios are grouped into three categories to enable easy comparison by consumers across different risk profiles:
Online investing assets hit £192bn at Q3 2017 but nervous investors increase cash holdings
Research from Boring Money finds that online investment assets grew to £192.4bn by the end of the third quarter of 2017, an increase of 17% on the year before. Market leader Hargreaves Lansdown grew assets by 21%, increasing its market share to 43%.
Consolidation is also in evidence as TD Direct Investing customers now log-in to Interactive Investor branded websites.
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UK Divorcees: once bitten, twice shy?
- ONS stats reveal divorces amongst opposite-sex couples have increased from 2015 to 2016
- The associated wealth transfer from men to women is having a bigger impact investment providers than inter-generational wealth transfer
- Boring Money research shows once divorced, women aged 55+ become more likely than the national average to always find time for their finance
Nearly 3 million WARY women turn their backs on financial advice
- Only 12% of women hold a stocks and shares ISA vs 19% of men
- Almost a third of women in their 40s and 50s have chosen to not see a financial adviser again
- Women state “Philip Green scenarios” as reason they don’t trust or engage with retirement savings through a pension
- Boring Money warns consumers that price comparisons sites are not always the best pit stop for advice