2 ex-Merrill Lynch MDs just launched a new fintech business — and they’re already managing £60 million
By Oscar Williams Grut for Business Insider
Two former Merrill Lynch managing directors have launched a new fintech – financial technology – platform that allows businesses, the rich, and charities to easily deposit cash in accounts with the best returns.
Insignis Asset Management lets people open a “hub account” on its online platform, provided by Barclays, and then move money around easily online to put it in several virtual accounts that give the best return. The idea is to cut out the hassle of finding and managing multiple cash savings accounts.
The minimum deposit is £100,000 ($141,620)and the product is aimed at high net-worth individuals, charities, businesses, local authorities, and wealth managers.
The startup was set up by Paul Richards, who retired from Merrill Lynch in 2014 as Managing Director and Co-head of EMEA Debt Capital Markets and Corporate Banking, and Giles Hutson, who has been an MD at both Merrill Lynch and Morgan Stanley.
Richards and Hutson, who self-funded the business, have been working on the project for 15 months and so-far have 10 banks signed up to offer their savings accounts through the platform.
Hutson told Business Insider they include 3 of the 5 major High Street banks, challenger banks, and private banks. He declined to name the banks for commercial reasons but said Insignis customers would see the brand names once they sign up to use the platform.
While Monday marks the formal launch of the platform, Insignis has been testing its platform for 4 months and has around £60 million of cash invested over the platform, Hutson says. He described that as a “good start.” Insignis charges clients a fee of between 0.10% and 0.30%, with lower fees charged to clients depositing larger amounts on the platform.
Insignis is not the first to create a hub account that lets savers easily move their money across multiple savings accounts. Germany’s Raisin lets people put their money into savings accounts across Europe through its online platform and has already seen over €1 billion moved across the platform.
Hutson says: “The technology itself is mainstream, it’s APIs. The complexity comes in that every bank is different. You have to slightly tweak what you’re doing in each case.”
Richards, who is chairman of the business, says in an emailed statement:
Over nine million individuals hold between £50,000 and £5 million in liquid assets, and Corporate and Charity cash deposits are at record levels. However, with low interest rates and the tedious process of moving cash between accounts, increasing their return on those assets has been complex and time-consuming.
That has now changed. Insignis provides a means for savers and investors to freely deposit and move cash between accounts, taking advantage of the best rates available and dramatically increasing their return.
First appeared at Business Insider