Munnypot

Investing now attractive for a large group of people

For a long time, investing was considered a pastime for people who enjoy taking a risk or who are simply wealthy enough to do so. With interest rates on savings accounts and deposits at an all-time low, investing is becoming popular again. Robo-advice service Munnypot helps investors understand the risk level, offering an alternative to savings or deposit accounts. This concept was created in partnership with Ortec Finance, Five Degrees and Virtual Affairs.

Deciding on a goal for savings

The service was first rolled out in the United Kingdom, where 56 percent of all adults put aside a sum every month. There is thus a market for savers. However, over half of the working adult population (57 percent) finds it difficult to reserve a considerable amount. In a survey conducted by Money Advice, it was found that this group has less than one month’s income in savings. Furthermore, 37 percent of adult savers in the United Kingdom have less than 300 pounds in savings.

If you are saving money but are finding it difficult to create a significant buffer, it may be helpful to decide on a goal. Why might you need a certain level of savings? According to Money Advice’s survey, most people in the United Kingdom save money to pay for a holiday (34 percent) or to cover unforeseen expenses (30 percent). People also put money aside ‘just in case’ (18 percent), for a pension (18 percent), for home renovations (16 percent) or to buy a new car (15 percent) or a new house (14 percent).

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Guide through the investment process

With ‘only’ one month’s income in reserve, however, it is very hard to pay for a new car or a home extension. And with the current low interest rates, that amount is unlikely to increase. Waiting until that changes is therefore pointless. This is where investment comes in: a slightly ‘scary’ term for the majority of the population, due to its association with risk. Many people are also deterred by their limited knowledge of the financial market or investment in a broader sense. This is where Munnypot can help.
 
Munnypot’s robo-advice service guides users through the investment process. Users can set a savings goal and leave the rest to Munnypot. Or, if they wish to coordinate their investments themselves, they can be given support to find the right investment. The robo-advisor subsequently updates the client about all developments concerning the chosen investments. If there is an adverse market change, this adviser can make suggestions helping you to still achieve your goals. And when things are going well, the client receives advice on how to maintain or even strengthen their position by potentially reaching their goal early. The client therefore feels reassured that choosing this service is not something where they are left alone throughout the journey.

Replacement of the traditional advisor

In the area of saving and investing Munnypot could be seen as a replacement for the traditional financial advisor, who generally charges a relatively high fee for comparable advice. The founders of the service, Andrew Fay and Simon Redgrove, believe that this can be achieved at a fraction of the cost and more efficiently. With Munnypot, they hope to interest a broader target group in investing. To do so, they harnessed the expertise of Virtual Affairs. Ortec Finance, specialists in effective financial planning, and Five Degrees, experts in client relation management and business process management, also made important contributions to this project.
 
Virtual Affairs Director Robin Peters: "We are often approached by start-ups and Munnypot’s founders had already shown their ability to make something out of nothing. The company’s directors are a respected authority in the field of financial advice. Furthermore, this is an initiative with a serious investment budget, because they recognise the importance of good digital customer service. Many of the requests we receive also require an investment from us. That’s not something we can do for everyone. It must also be profitable. We believe that Munnypot can make money, so we have also invested in the business case. Furthermore, we wanted to expand abroad and this was a way to access the United Kingdom, a market which had been difficult to target until recently.”

From start-ups to large organisations

Previously, Virtual Affairs helped set up financial start-ups like Ditzo and Knab. “That is another thing which is in line with our company. Obviously, we work extensively with large organisations too. But in the past, we have also demonstrated our ability to generate complex IT solutions in the financial world, rapidly and pragmatically,” says Peters. Virtual Affairs designed Munnypots concept. “Because we were investing in the project, we also wanted to contribute ideas. We didn’t want this to be just another robo-advisor,” Peters continues. Besides designing the concept, Virtual Affairs is responsible for the interaction between Munnypot and its clients, the design of the client’s personal website, the self-service environment on the website and the integration with services of other parties involved.
 
“We were immediately very enthusiastic about Virtual Affairs,” says Simon Redgrove. “They came highly recommended, which is why we contacted them. We had several meetings in Amsterdam. During those meetings, it was obvious that they had studied our service in-depth and were therefore able to explain their plans in detail. Virtual Affairs had very interesting ideas. In fact, we immediately felt at ease with them. They clearly demonstrated that they had the experience and knowledge that we were looking for.”

Future

Now that Munnypot has taken its first steps on the market, Redgrove cautiously looks back. “We are delighted at how the public has received the service. This has matched our expectations; the publicity was phenomenal. The British press really embraced our story. And that also encouraged other parties to show an interest in Munnypot, making negotiations with potential investors and third party partners easier too. And we have many conversations nearly every day. All this means that Virtual Affairs may have more work to do in the near future. “This is just the start. Based on the initial feedback, we can implement new adjustments. Ultimately, the idea is to expand and potentially create an app, for example. That’s something else we would expect to involve Virtual Affairs in.”