The pandemic savings boom is helping online wealth management services such as Moneyfarm scale new heights.
Covid-19 has been tough on many people, but for those who stayed in work it has left them with excess savings. The result, as new figures from Moneyfarm suggest, is that that they are looking to make it work harder for them.
The company which was launched in 2011 has had a stellar first half of the year.
Moneyfarm first half 2021 results
Among the highlights are:
- Assets undermanagement surged 50% compared to the same period last year to £1.6bn.
- Total new customers grew by 80% bringing the customer base to more than 60,000.
- 126% increase in number of appointments requested with investment consultants.
- 33% more one to one interactions.
The service is also proving especially popular with young people with the number of millennials using Moneyfarm up by 37%.
What has helped Moneyfarm during the pandemic?
One of the stand out features of the year has been the successful pilot video calls which have helped them connect remotely with their regular customers. The firm plans to make it a regular part of its hybrid advisory service.
Key to their success has been the rise in consumer saving. With lockdown restrictions reducing opportunities for holidays and eating out, consumers have built up the second highest level of savings on record.
People have been looking to make their money work harder prompting an 86% increase in the amount of new money invested by existing Moneyfarm investors. The average size of each investment has also increased by 38% compared to the first half of 2020.
Paolo Galvini, Co-founder and chairman of Moneyfarm said:
“A side effect of the pandemic has been that generally people have had more time and money to invest, and we’ve seen a significant increase in the appetite for ‘next generation’ investment services, which has resulted in the strong growth in our customer base,” “The number of millennials investing with Moneyfarm has risen and we’re encouraged by the growing number of young people looking to take control of their financial future. Risk appetite has also increased, which we believe is due to increased savings and investor confidence.”
Investors are taking a longer term view
People are also taking a longer term view. 75.5% of UK customers invested with a horizon of 6 years or more, up from 69.7% in 2020. In addition, they also have a greater appetite for risk. Their riskiest portfolio, P7, which has an 80% allocation to equities, saw the biggest increase jumping from 5.9% of customers to 9.6% in 2021. The next one down – P6 which has an equity allocation of around 65% also saw a significant increase, chosen by 21.2% of customers compared to 20.36% in 2020.
The pandemic and financial advice
The pandemic, then, has accelerated demand for new ways to access financial advice, with a growing class of younger investors, getting more ambitious with their money. It’s a trend which, according to Moneyfarm’s CEO, Geovanni Daprà, is perfect ground for a platform such as theirs. “Our growing customer base, increased requests for Appointments, and increased investments suggest that our dual ‘hybrid’ service model is much needed and well-received,” he said. “Everyone should have access to simple investment solutions and guidance to better manage their capital for the long term – that is our mission at Moneyfarm.”
Tom Cropper has been writing for us since 2015. Tom is a financial journalist and his work has appeared in titles such as the Guardian, Euromoney and many others.