In a mail-shot to customers, it said it has “regretfully decided to close Moola following a strategic review”.

The news comes just over a year after the company, founded by personal finance TV personality Gemma Godfrey in 2015, was acquired by JLT Employee Benefits.

Latest financial account details for the period 1 May to 31 December 2018 reveal that Moola Systems Limited had a turnover of just £3,768 but reported a loss of £967,552.

What’s happening and when?

The company is set to close on 27 February and it will stop taking monthly payments from 17 January.

Customers with general investment accounts will need to sell their investments and the money will be returned to their nominated bank account. Moola said if it doesn’t hear from customers by 14 February it will do this on their behalf.

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Proceeds from the sale of investments and any cash holdings should be received by Monday 24 February.

Unusually, Moola said that if customers incur a capital gains tax bill as a result, it will reimburse the amount.

ISA customers have two options: Moola will either sell the investments into cash and transfer the cash to another ISA manager or it will sell the investments into cash and return the proceeds to the customer’s nominated bank account.

With the second option, money will be taken out of its tax-free environment. Only with the first option will the tax-free ISA status remain. Moola added that it will pay any reasonable charges that customers incur as a result of the transfer of investments.

A spokesman for Mercer, of which Moola is a part of, which all come under the Marsh & McLennan brand, said: “We can confirm that we have taken the decision to close down Moola. All existing investors have been contacted and given options as appropriate to them.”

‘Fashionable robo-advice sector looks fragile’

Holly Mackay, founder and managing director of Boring Money, who received the customer email from Moola today, tweeted that slow growth rates and high acquisition costs have made the fashionable robo advice sector look “fragile”.

Aside from Moola bowing out, Investec withdrew from its robo-adviser Click and Invest business and Tiller Investments closed its wealth management business in October 2019.

She said: “With those numbers [profit and loss], and the cost of acquisition as high as it is, to continue in operation requires commitment to effectively start from the beginning and build a brand. Robo-advice can be a bit perplexing when you think about it from an investor perspective – it’s all about the dream and not about the today. Because if you’re a finance director, the today is ugly!”

Mackay added that 2020 will likely see a different emerging approach to digital advice, such as more closures and more M&A activity.