Netwealth, the wealth manager, states its “just getting started” as it celebrates its fifth anniversary.
Founded by Charlotte Ransom, CEO, and former partner at Goldman Sachs, and Thomas Salter, COO, and former managing director at JP Morgan, Netwealth launched in 2016 to deliver a tech-enabled, cost effective wealth management service to better meet the needs of clients today.
Five years since launching, Netwealth has a proven track record with key highlights including: annualised AUM growth of over 50% per annum; average client portfolio size of approximately £470,000; all seven Netwealth investment portfolios outperforming their benchmark since inception (see chart A below); and 75% of clients being part of a Netwealth Network.
The Netwealth Network is a unique offering, enabling members to benefit from a reduced minimum investment threshold and lower collective fees, whilst maintaining complete control of their individual finances.
Clients join Netwealth for various reasons. Some are tired of unjustifiably high fees from their existing wealth manager, while others want to make the move from being a self-directed investor to a service with comparable costs and professionals that are able to help them more broadly. Clients also often look to leverage Netwealth’s expertise as they approach retirement age and begin to think more actively about how they can use investments to achieve a sustainable income.
A positive future ahead
In March, Netwealth completed its fourth fundraise, with total funding now at £38 million. Netwealth’s high-profile backers include Michael Spencer, founder of ICAP, Edward Bonham Carter, former Group CEO and Vice Chairman of Jupiter Fund Management, Harvey McGrath, former CEO of Man Group and Chairman of Prudential, and Stuart Rose, former CEO of M&S and Chairman of Ocado.
Netwealth forecasts £5 billion AUM by the end of 2025 and expects to achieve profitability well within this timeframe.
As part of its long-term growth strategy, Netwealth will invest further in technology, with a particular focus on broadening its existing suite of sophisticated wealth planning tools and bolstering its intergenerational advisory and wealth planning capabilities. In addition, the firm is reviewing the potential for acquisition of suitable IFA firms.
Charlotte Ransom, CEO, comments: “Netwealth has achieved a phenomenal amount over the last five years. I am hugely proud of the team and grateful to everyone who has supported our journey to date. However, I strongly believe that we are only just getting started with our transformation of the wealth management industry; the best is yet to come.
“Wealth managers are often slow to adapt, with investors paying the price for their lack of change and innovation over the years. Netwealth, on the other hand, retains the core elements of traditional wealth management while improving those areas where the industry has remained stagnant, such as fees, transparency, access to modern technology and overall client experience.
“Over the next five years we will continue on our mission to become a leading provider of wealth management in the UK, providing the best possible service for our clients and continuing to raise the bar for the rest of the industry.”
Chart A: Netwealth 5-year portfolio performance against peers