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May 16, 2019

Investec closes online investment platform as costs increase

By Oliver Williams

Investec Group has closed its online investment platform, Click & Invest, as operating costs at the British and South African bank and asset manager increase.

In a statement, Investec said, “We have reviewed the Click & Invest online investment platform and decided to discontinue the service in line with the group’s commitment to manage costs and allocate capital effectively.”

The operating loss of the online platform was £12.8 million in 2018, which is just slightly less than £13.5 million the previous year. Investec said that it had written off circa £6 million for the software in its 2018 results.

The write-off saw Investec’s Wealth and Investment business adjusted operating profit decrease by 16.2% to £82.6 million from £98.6 million the previous year.

Click & Invest was launched in 2017 and made available for Investec clients willing to put £10,000 into the platform. They would be able to choose from over 300 funds and have investment managers oversee investment portfolios.

Following the launch, PBI quoted Investec Click & Invest CEO Jane Warren saying that the service offers, “clients the convenience and ease of an online service, with the knowledge that their money is being actively managed by our team of experts, not algorithms.”

Investec’s decision to close its online investment platform comes less than a year after UBS did the same with its online investment platform.

The Swiss bank launched its Smartwealth online investment platform in the UK with an investment threshold of £15,000. However, it closed the online platform in August last year, little over a year following the launch.

Worryingly for other online investment platform operators, Investec’s announcement came on the same day that a report by Credit Suisse found just 4% of next generation leaders want their wealth manager to be “digitally savvy”.

Investec Group 2018 results

Investec’s decision was impacted by soaring operating costs at the group, which have grown faster than revenue for the year ended 31 March 2019.

Total operating costs increased by 3.8% to £1,695 million for the 12 months. Non-operating costs also increased from £6 million to £19 million due to the demerger of Investec’s asset management business and the restructuring of its Irish branch.

Brewin Dolphin recently acquired Investec’s Irish wealth arm for €44m.

Group adjusted operating profit increased 9.4% year-on-year to £664.5 million.

Fani Titi and Hendrik du Toit, joint chief executive officers of Investec said: “We are implementing our strategy to simplify, focus and grow with discipline.

“We are committed to the demerger and listing of the Asset Management business and the positioning of the Bank and Wealth business for long-term growth. In spite of a challenging operating environment, these results speak to strong support from our clients.”

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