UK fintech Wise (formerly known as TransferWise) has launched a new service in conjunction with fund management giant BlackRock.
Wise which started life as a peer-to-peer payments and currency transfer platform, that sort to disrupt and undercut the existing market for international payments business, was founded back in 2011 has grown quickly, and today has a user base of more than 6.0 million active customers.
Transferwise rebranded earlier this year to Wise to better reflect its ambition to expand beyond the payments and currency transfer space.
The firm floated on the London Stock Exchange, back in July this year through a process known as a direct listing rather than a traditional IPO the listing valued the business at almost £9.0 billion.
What new services will Wise provide?
Using the new Wise Assets service retail and business banking clients will be able to invest in BlackRock funds.
Speaking about the new venture Wise co-founder Kristo Käärmann said that:
“People all over the world are holding billions in their Wise and Wise Business accounts for the long-term. ‘But holding money in various currencies can be hard to manage efficiently,”
“Assets is seeking to solve that problem, by providing an opportunity for customers to earn a return on their money with us, in a host of different currencies, in all one place”
What types of investment will clients be able to deal in?
Eligible clients will be initially able to invest in BlackRock’s iShares World Equity Index Fund, which according to the fund managers website aims to achieve a return on investment through a combination of capital growth and income on the fund’s assets.
The fund returned just over +40% in the 12 months to the end of June 2021, though of course, past performance is no guarantee of future returns.
Wise clients will be able to invest up to 97% of their account balances in the fund, the remainder being held back against what Wise calls market volatility.
What’s more, money can be invested into the BlackRock fund from any of the 50+ currencies that the Wise multi-currency account supports.
Wise intends to add other asset classes to the investment platform in due course
What fees will Wise charge for the Assets service?
Wise will levy two charges, one a 0.15% per annum management fee on behalf of BlackRock, and its own service charge of 0.55% per annum. Though these charges will be applied pro-rata and debited daily. Wise has indicated on its website that intends to reduce these fees in future.
The new Assets platform was soft-launched in August and was officially publicised this week.
Darren is a veteran of the financial markets with almost 36 years of experience under his belt. He has worked in trading, sales, analytical, and research roles, he has been a regular guest & commentator on financial television channels and publications. During his career, Darren has been fortunate to act for and advise major hedge funds and investment banks as well as HNWI. Darren analyses the markets using a blend of technical and fundamental analysis