In this issue

Issue 24  January 2022

In this issue

Issue 63 • January 2021

Tech and digital are looking like safe buys

The year is not even a twelfth through and the trends are emerging. Looks like it is time to buy tech.

UK wealth manager M&G has acquired an undisclosed minority stake in digital investment specialist Moneyfarm as part of a strategic tie-up to offer investment services to its UK customers.

M&G’s investment was part of Moneyfarm’s £44.1m Series D funding round.

The partnership will see M&G’s wealth management unit utilise Moneyfarm’s digital capabilities, technology, and investment guidance journeys to form its own branded proposition.

The new direct digital service will include a range of multi-asset model portfolios, which are backed by a selection of actively-managed and passive funds.

As part of the tie-up, the two companies also plan to consider new partnership opportunities in other wealth markets in Europe.

Separately, Moneyfarm said that its new funding round will enable it to increase its investment in people and its platform.

Furthermore, UBS has signed a deal to buy US-based automated wealth management provider Wealthfront for $1.4bn in cash.

The move comes more than two months after a Bloomberg report said that Wealthfront is mulling business divestment at a valuation of about $1.5bn.

The transaction is currently expected to close in the second half of the year, subject to regulatory approvals and other conditions.

Wealthfront manages over $27bn assets on behalf of its more than 470,000 clients in the US. It primarily caters to millennial and Gen Z investors.

The company’s platform provides users with access to financial planning capabilities, banking services and investment management solutions.

The acquisition will help UBS to bolster its presence in the US and expand distribution and capabilities.

Wealthfront’s capabilities will also help UBS to pioneer its new digital offering which will comprise access to remote human advice.

Additionally, Wealthfront will expand UBS’s existing offering through its Wealth Advice Center and Workplace Wealth Solutions business.

Consolidation has begun and wealth managers are looking for competitive advantage. With legacy systems becoming ever-increasing burdens, a tech boost is needed to meet clients’ new needs. Buying might be the easiest option and firms are definitely willing to spend.

Patrick Brusnahan, editor