According to Daniel Rodwell, CEO of GrowthInvest, the company’s solution sits easily alongside ‘traditional platforms’ that clients use for their mainstream advice business and is one that now removes operational risks and inefficiencies for a large section of the active adviser marketplace.
He stated, “It felt strange to me that there was no platform providing any of these efficiencies within the tax efficient and alternatives sectors, and at that point GrowthInvest was born.”
Many of the firm’s clients – whether small to mid-sized IFAs or large national wealth managers – often suffered from the same problems when advising in this space, claims Rodwell. These included a lack of a consolidated view of their client’s alternative asset portfolios as well as no integrated technology solution in place to offer further investment or to maintain and monitor these portfolios. These problems are solved through GrowthInvest’s ability to standardise and centralise complex portfolio data and deliver this within a single secure platform.
Setting itself apart
How does GrowthInvest set itself apart from the competition? The firm’s specialism lies in the tax efficient, alternative and private markets space which has been key to its market traction.
Rodwell continued, “This has been driven by a combination of our proprietary technology and the deep industry knowledge of the team. This is further underpinned by an understanding that the interaction between the technology and GrowthInvest’s client services team of analysts and consultants is absolutely key.”
This solid basis has allowed the firm to have established relationships with the UK adviser market – specifically those with higher value clients, who either benefit greatly from tax planning or have meaningful weighting of alternative investments in their portfolios.
Recent initiatives
Over the last year GrowthInvest has continued to innovate and deliver technology enhancements and new features for advisers and clients.
For example, GrowthInvest’s recent partnership with Sprint Finio, which now integrates its data and technology with Intelliflo office and other UK back-office providers, allows UK advisers and wealth managers for the first time to manage and report on their clients’ alternative and tax efficient investments within their existing systems.
As part of this project the company has also consolidated, integrated and streamlined hundreds of different data files across a wide range of fund managers and products, many of which have not been previously available via platforms in the UK market.
This, Rodwell explains, now covers Private Equity, Private Credit, Infrastructure and Venture Capital funds alongside other private investment products, as well as tax efficient structures such as VCT, EIS and IHT services.
He said, “We believe that all the asset classes on our platform have the potential to grow significantly, and to reach a much wider audience, but are being held back by the inefficiencies of manual administration and also a lack of education and awareness.”
Over the last 18 months GrowthInvest has worked to expand its capabilities within global private markets – most notably partnering with AllFunds to provide clients access to a wide range of the largest global private asset managers.
“We have successfully carried out a soft launch with some of our leading wealth manager clients and we can now deliver a seamless digital process for clients looking to make new private market fund investments or transfer on and consolidate their existing portfolios,” said Rodwell.
Market trends
In a sector evolving as rapidly as the WealthTech space, the trends that dominate the sector continue to evolve.
For Rodwell, the two key areas he highlighted focused on consolidated-driven integration projects and private markets.
In the first area, Rodwell stated, “In the traditional tax efficient space, we are continuing to see a greater interaction with adviser firms facing problems that largely stem from the lack of a single clear view of their customers and their portfolios, which is often due to legacy systems and disparate data sets.
“As the theme for consolidation in the wealth management marketplace continues, we have been working with a number of larger firms, including nationals, networks and aggregators, helping them standardise, and to some extent monetise, alternative asset portfolios across a diverse set of adviser firms they have acquired.” Rodwell emphasised that this problem is acute in the tax efficient and alternative investment space, where there has traditionally been a dependency on individual product providers with disparate reporting processes and no centralised platform proposition.
The GrowthInvest platform also helps to address regulatory requirements. “This is one of the most common conversations we are having at present around the clarity that we can quickly bring to a generally opaque set of client portfolios, as well as providing clear basis to meet existing regulatory requirements such as Consumer Duty,” said Rodwell.
However, it is in the private market space that Rodwell sees the most rapid changes, as he stressed a belief that “we are on the verge of a significant transformation in how private wealth is allocated within private markets”.
He said, “Dubbed by some industry commentators as the “evergreen evolution”, there is a significant shift underway towards evergreen fund structures and away from the traditional closed-end funds (LP/ GP drawdown structures). Evergreen structures offer simplicity and liquidity and are therefore far more appealing structures to the private wealth channel. This means that it is easier for a much broader client set to gain access to these alternative assets, that have long been the preserve of institutions or the ultra-wealthy.”
The private wealth channel, with an estimated $450trn in net assets, has historically had limited access through drawdown funds. According to Rodwell, there is likely to be trillions of new capital flowing from the channel over the coming decade. He said, “With the introduction of structures such as ELTIF 2.0 in Europe and the UK’s LTAF, this will make these asset classes more accessible than ever to our client base. Increasing distribution opportunities and diversifying investor bases for asset managers.
“In particular, UK private wealth is a hugely fragmented market, and by partnering with GrowthInvest, asset managers can benefit from aggregated distribution into the advisers and wealth managers whose clients should be actively allocating to their products,” he said.
Private market challenges
What are some of the biggest industry challenges within private markets? According to Rodwell, many of the issues in this area surround the areas of access, education and the simplicity of making new investments – areas which Rodwell claims are like those that GrowthInvest has already solved within the UK tax efficient space. Rodwell said, “GrowthInvest aims to be at the forefront of democratising access to private market investments, making them available to a wider range of suitable investors, including retail investors, IFAs (Independent Financial Advisers), and wealth managers.
The technology we have developed has been successfully proven to allow investment into, as well as the ongoing administration of, Private Market products over the last 18 months. We are convinced this solution will be appealing to many more of our clients.”
Future plans
GrowthInvest is very excited about the year ahead, as the firm believes growth in the use of private market funds within UK private wealth could be meaningful and believe that their technology will be a catalyst to this shift. “We are working with a large portion of the UK private wealth market already, we have established technology and resource in place.
Our partnership with a global platform giant such as Allfunds provides us, and in turn our clients, with access to a hugely diverse range of private market funds, which alongside our tax efficient proposition will provide a complete solution for alternatives,” he said. GrowthInvest continues to see growth in the number of larger businesses, private banks and wealth managers that are using its technology to get a solution that is right for them and their clients.
‘We already have some sizeable onboarding projects underway for the first half of the year and we expect that this trend will continue for us. As always, we are driving efficiencies and innovation and I am pleased to say we are now providing transparency, value and insights on previously opaque and disparate client portfolios within days of these projects starting,’ said Rodwell.