On Thursday, Aviva announced that it bought a majority stake in the British investment start-up Wealthify. Aviva plans to offer Wealthify’s “robo” investment services covering alongside their other products and services through the MyAviva app. The transaction is still subject to regulatory approval from the U.K.’s Financial Conduct Authority (FCA) watchdog.
Wealthify launched in April 2016 with the promise to make investing easy. The Cardiff-based startup uses robo-advisors to give people investment advice and services. Customers can make investments in five different plans through tax-free Individuals Savings Accounts (ISA) and general investment accounts.
Wealthify’s services are geared toward millennials and individuals that are new to investing and looking for a straightforward experience. Blair Turnbull is the managing director at Aviva U.K. Digital. In a statement given on Thursday, Turnbull praised Wealthify’s simplified approach and commitment to “take the complexity out of investing.”
Aviva did not disclose the amount of the majority stake but said they feel the transaction will be beneficial to both companies. Aviva is a multinational insurance company; they currently insure over 33 million customers for different kinds of insurance and asset management. Now they are looking to build customer loyalty by offering a range of services that can be accessed through the MyAviva customer portal. At the same time, Wealthify has an opportunity to grow through new exposure to Aviva’s customer base.
Aviva is not the first firm to invest in the “robo-advisor” market. Other companies, like the U.S. investment management firm Blackrock and the U.K. insurer LV = Liverpool Victoria, have invested in similar digital platforms. These platforms use computer algorithms to automate and simplify wealth management.
Richard Theo is the co-founder and CEO of Wealthify. Theo said that Aviva’s investment in Wealthify signals a shift in market demand for high-quality, technology-based financial solutions. He also said that the investment from Aviva would be used to accelerate growth plans and to further develop their technology.
This move is an important step for Aviva as the insurance giant looks to transform itself into a fintech firm. Going forward, it will be interesting to see how this move affects the insurance industry as a whole.