Support 100 years of independent journalism.

  1. Spotlight
16 January 2018

First socially responsible robo-advisor launches, with millennial money in its sights

Wealthsimple bets on ethical credentials in the race to attract young investors

By Will Dunn

Robo-advisers are growing fast. The UK’s leading online investment manager, Nutmeg, more than doubled its customers to over 45,000 investors last year while increasing its assets under management to over £1bn. But growing even faster is the trend for millennials to switch banks – Monzo, the UK’s top challenger bank, attracted over 400,000 new customers last year. These financially fickle youngsters spent over £1bn on Monzo’s distinctive luminous-orange cards last year, including more than £66m on entertainment and almost £7m on Pret a Manger.  

Canadian robo-advisor Wealthsimple hopes to join these two trends. Like Nutmeg, Monzo and others it offers a design-forward app and no physical branches. But Wealthsimple is the first of this kind of investor to offer an SRI (socially responsible investing) portfolio that matches the kinds of investments made with the kinds of social and political concerns likely to appeal to the young – environmental issues, fair employment and corporate governance. These “ESG” criteria do not explicitly rule out investments in tobacco or arms companies, but Wealthsimple’s CEO told CityAM that companies in these fields would be actively screened out.

Initial take-up of the new investments among the young could be reduced by the fact that a minimum investment of £5,000 is required. But in the long run, it could be that more managers will follow Wealthsimple’s lead. The UK Sustainable Investment and Finance Association (UKSIF) found that sustainable investment is attractive to the young, with more than half of millennials telling UKSIF they would prefer an investment that was free of fossil fuels. It may also offer security – a review of over 200 studies by Oxford University established a positive link between strong ESG policies and operational performance.

With new regulations such as the PSD2 directive (explained here) allowing further progress on data-driven “open banking”, it has become much easier for people to ditch the old guard. Younger, more technologically adept customers may well lead the way.

Select and enter your email address Quick and essential guide to domestic and global politics from the New Statesman's politics team. A weekly newsletter helping you fit together the pieces of the global economic slowdown. The New Statesman’s global affairs newsletter, every Monday and Friday. The New Statesman’s weekly environment email on the politics, business and culture of the climate and nature crises - in your inbox every Thursday. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A newsletter showcasing the finest writing from the ideas section and the NS archive, covering political ideas, philosophy, criticism and intellectual history - sent every Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.

Content from our partners
What are the green skills of the future?
A global hub for content producers, gaming and entertainment companies in Abu Dhabi
Insurance: finding sustainable growth in stormy markets

Topics in this article: