Will HL maintain its status as the leading online investment service following its acquisition by a private equity consortium?
It has a 29% share of the UK D2C market, considering the full range of D2C services, as covered in our recent UK D2C: Market Update. This is over twice the size of its next competitor, Interactive Investor. Newer competitors Nutmeg and Trading 212 each have only 1% market share.
The strategic opportunity remains immense. The small minority of people that pay for financial advice is static with regulation forcing the cost of provision ever higher. The mega trends of ageing population and dwindling government support in retirement put the onus on a broader swathe of society to invest for themselves.
New entrants geared to short-term speculation don’t look like the answer any more than unfettered access to a vast array of funds. More sophisticated use of customer data to get people invested will surely be part of the artificial intelligence future.
It is a coup for private equity to swoop on the company at the apex of the digitalisation of personal investing. The new owners may look for a quick return or take a more ambitious, patient approach – either way this deal hints at hidden value in the retail wealth sector.
Platforum recently published UK D2C: Market Update, our mid-year update of market size and analysis of major market trends. For more information, please get in touch.