Another Robo Adviser Crashes Out - Moola

[JulianPH]

https://citywire.co.uk/new-model-adviser/news/end-...

It is an interesting article.

[dazmanultra]

Is it just that margins are razor thin and competition in the space is increasing?

[Greshamst]

Think it was another thread on here that said most of these new robo-advisor companies aren’t turning a profit... why trust someone to make you money, who can’t make money themselves?

still trying to persuade my girlfriend to leave nutmeg for vanguard. She likes the app and ease, but the fees are twice as high, and returns almost half as good. But I see her eyes glaze over whenever I mention it

[mikeiow]

Greshamst said:

Think it was another thread on here that said most of these new robo-advisor companies aren’t turning a profit... why trust someone to make you money, who can’t make money themselves?

still trying to persuade my girlfriend to leave nutmeg for vanguard. She likes the app and ease, but the fees are twice as high, and returns almost half as good. But I see her eyes glaze over whenever I mention it

Indeed. Love that the first comment on the article is "it seems to me that perhaps the biggest challenge for the automated advice propositions is one of scale."
Actually, I think the biggest problem is figuring out a business model that makes the company (and it's investors - backers) some money!

We live in a world where it is all about taking market share......but in the end, the piper needs paying. I Amazon got away with 4 or 5 years with zero profit, & it didn't do them too much harm.....

I imagine the likes of Moola/Nutmeg/etc real hope is to get "good enough" to be bought by one of those larger companies.....

Moola did okay with the teeny amount I dropped in (after they offered a ludicrous £100 'cashback' on a low investment!).....hopefully I will get it all back with (it looks promising!)

[anonymous-user]

It's cost of acquisition (I think it was nutmeg who have been paying £3 for every £1 invested). This is too high an upfront cost with to long a payback period to make the risk and cash flow penalty worth it.

If someone cracks it at scale they'll make an absolute fortune.