To generate more interest among retail investors, Outsurance is to acquire a 25% stake in passive investment manager CoreShares, as the insurance company’s robo-adviser, Outvest, goes live.
The acquisition complemented Outvest, an online, automated advice business, the companies said in a statement on Monday.
“CoreShares’ index portfolios are integrated directly into the advice algorithms developed by Outvest. Having worked closely with CoreShares over the last two years in the development of Outvest, and through direct balance sheet index investments, we believe CoreShares is poised to become a dominant player in the passive investment market,” Outsurance CEO Willem Roos said.
Robo-advice, which refers to automated, online advice, threatens to disrupt traditional financial advice models.
Some of the world’s largest asset managers, such as BlackRock and Vanguard, are investing in robo-advice platforms.
In SA, financial advisers, to more effectively service their clients, are predominantly using these platforms, although there are platforms available to retail investors.
Outvest’s entry into this space is bound to generate interest among retail investors, given how successfully the insurance company was able to disrupt the insurance market by enabling consumers to buy insurance directly rather than through a broker.
Outvest enables users to save for specific goals, including education and weddings, or simply save for the sake of it. The platform also offers a tax-free savings account for any of the goals.
There are five Outvest unit trust funds of varying risk levels, which are determined based on the investment time horizon.
A fee calculator shows what an investment will cost and breaks down the advice, administration and asset management cost.
The Outvest/CoreShares transaction awaits regulatory approval. The purchase price was not disclosed.
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