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Gumtree founder launches low-cost digital investment manager

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Gumtree co-founder Simon Crookall is looking to shake up the robo-advice market with the launch of a digital investment manager which undercuts the likes of Nutmeg and Moneyfarm.

Crookall has joined forces with his sister Joanna Crookall, who is the chief executive of wealth manager Ramsey Crookall, to launch InvestEngine.

Like other digital investment managers, such as Nutmeg, Moneyfarm and Wealthify (also known as ‘robo-advisers’), InvestEngine will be available for consumers who wish to cut out a financial adviser or wealth manager.

Customers will be able to set up a stocks and shares ISA (and transfer an existing ISA over) or set up a general investment account. The company plans to launch a self-invested personal pension (SIPP) later down the line.

InvestEngine describes itself as the only UK automated investment manager which takes a ‘buy and hold’ approach to investing. It assesses investors against 16 risk profiles and offers portfolios comprised of exchange-traded funds (ETFs), which track the markets. These provide exposure to a range of underlying asset classes, including equities, bonds and gold.

Customers will be charged a management fee of 0.45% per annum, which is one of the lowest fixed rates available across the UK’s digital investment managers. They will also incur underlying charges for the ETFs held in the portfolios, which will typically cost of 0.17%. The minimum investment stands at £2,000.

The new company also takes full custody of customers’ assets and does not outsource to a third-party.

Simon Crookall said: “The vision for InvestEngine is to become the ultimate destination for investors and savers. Over time our offering will diversify and expand to include services like investment advice, pensions, ISAs, SME business accounts, current savings accounts, cash management tools as well as ethical investing options with truly green portfolios.”

How do charges stack up?

By comparison, Nutmeg charges 0.75% for fully managed portfolios up to the £100,000 level, falling to 0.35% thereafter. Customers also incur underlying fund fees, which range from 0.17% to 0.33%. For ISA, general investment and pension pots, the minimum investment is £500.

Meanwhile, Moneyfarm charges 0.7% per year to manage portfolios up to £20,000 in size and has a minimum investment of £500. The management charge falls to 0.6% between £20,000 and £100,000, 0.5% up to £500,000 and 0.4% thereafter. Investment fund fees of 0.3% are also applied.