Investec Wealth & Investment Review

This article was updated on January 24, 2021

Investec Wealth & Investment Review. That will be the topic of today’s article.

If you want to invest or ask me some questions, you can contact me using this form, the WhatsApp function below or email me – advice@adamfayed.com.

Investec Wealth & Investment, the South African ex robo-advisor and wealth manager

In previous articles, we discussed and analysed some popular robo-advisors in the UK, like Nutmeg and Wealthify, concerning their safety and effectiveness and who could benefit the most by using them.

There has been an exponential growth in robo-advisors lately in the UK.

In this review, we will cover step by step Investec’s both successes and failures and why did Investec abandon its robo-advisor option. Should you consider it for your investments?

Who is Investec?

Investec is an international banking group founded in 1974 in Johannesburg and currently serving mainly in South Africa, the UK and Australia as well as certain other locations. It is recognised globally for having a zebra on its logo. 

Investec is a leading investment manager, serving individuals, charities, trusts, and supports by you managing your assets and your investments.

It entered the UK market back in 1990 acquiring firms such as Rensburg Sheppards and Williams de Broe, which existed since the 19th century, creating a strong and secure business that today administers an asset of £36 billion.

What was the Click & invest robo-advisor?

In 2017, due to its great success, Investec launched its first robot advisor called Click & Invest that failed soon after in May 2019 when the company stated that:

”We are extremely proud of the service we have provided so far to our clients and their positive feedback, but unfortunately, there is not too much appetite for traditional investment like ours in the market, and the market itself is growing at a slower rate than expected, therefore we cannot continue our service”

Consequently, their clients were offered to sell their investments or to transfer them to another provider without any charge suspending all the costs that could have been applied during this transition.

What did it offer?

Unlike most robo-advisors that accept to invest even sums as meagre as 1£, the minimum you could Invest with Investec was £2,500. 

In return, they were promising a ”high-quality investment with few clicks and having your money invested in less than 24 hours”

What was different from their robo-advisor competitors?

Let aside the questionnaire you can find on any robo-advisor broker that focuses on passive funds, here on Investec you could have had a team of experts constantly staring at the market and taking an active approach on your funds. Their goal was to build an active portfolio that would, not just follow the market but beat it and it was designed for both small and bigger investors.

Unfortunately, if you came to read this article for the Click & Invest robo-advisor, I would suggest you to take a look at previous articles about Wealthify, Nutmeg and Wealthsimple for simpler and more effective still-existing robo-advisors.

What has been the history of Investec during the last 5 years? Is it doomed to failure because it failed to manage the Click & Invest robo-advisor?

This is the history of this company in the last 5 years:

– 2015: Blue Strata group, after 13 years of partnership become part of Investec

– 2016: Investec Equity Partners was founded in South Africa

– 2017: Nothing too important

– 2018: Investec publicly announced its intention to demerge and separately list the Investec Asset Management business (IAM).

– 2019: Investec sold its Irish Wealth & Investment business to Brewin Dolphin due to Brexit.

– 2020: Investec Asset Management business was demerged and separately listed as Ninety One

Briefly, we notice that no, Investec is a strong and active company employing more than 8,000 people worldwide offering international banking, investments and wealth management services.

What do they promise to offer their clients nowadays?

The aim of Investec is to make your personal wealth work harder, whether you regard yourself as an entrepreneur, business professional or high-net income individual. They do this through onshore and offshore services such as saving, banking, lending and financing, and personal investment management.

Meanwhile, as far as businesses and corporates are concerned, they offer a corporate advisory service in addition to banking, investment and finance solutions. They work along with insurance companies, charities, government departments and many more socially useful institutions such as hospitals or producers, the factories.

Their website

The website design is simple but you find it difficult to orientate among all its pages and lacks short and quality details. Most of the times when you want to check a product, the product is not clear and to be able to understand what it really offers, you must call them for clearer info.

In fact, most of the products just repeat that Investec will help you in some way reaching your goals in life but to find its fees you have to dig deeply in the website.

Some parts of the website are not constantly updated and what you find on their website is not what you get on their app. There could be differences as the former is more updated than the latter or vice versa. 

Financial planning and investing for individuals:

The specific role of Investec’s Financial Planner program is to understand your goals in life first, and only after that to invest your money so as not to drain the funds you need to meet your day to day objectives in life. Therefore, they will build a customised portfolio based on your needs, your appetite to risk, your capacity to losses and your desired timeline.

In this area they concentrate on:

Retirement planning: As the rules on pensions are forever changing, Investec offers expert advice to help you build up your pension choosing 1 of these 2 options:

1) The income drawdown offers you a flexible solution allowing you to use the income you need while keeping your money invested for ulterior growth;

2) The SIPPs (Self-Invested Personal Pensions) are a much more flexible option. It has the tax advantages of a standard pension plan but a the same time offers more in terms of the investments that can be held within it. SIPPs are popular among the people who want to build up a substantial fund the fastest.

Tax planning: as PensionBee stated in 2020, tax-payers in the higher brackets are missing over £750 million each year in unclaimed pension tax relief alone. Investec, on this matter, knowing that the rulebook of the tax code is forever changing, deals to:

1) Find the most effective combination of tax structures, from ISA and investment bonds to pensions in order to minimise your tax bill.

2) Supporting families to find gaps in the tax system and help you against inheritance taxes with effective strategies such as – gifting, trusts, pensions and reliefs, advising you to the best options on how to pay the least in every situation.

3) Dealing with your CGT (Capital Gains Tax). You may find that your investments are performing really good, but so is the government asking for more money. While CGT is one of the most intricate tax, it also offers many tax reliefs and exemptions.

Real Estate planning: Investec helps you by:

1) Minimising your IHT (Inheritance tax) by analysing all the assets you possess in order to calculate how much may be liable to IHT and offering the most appropriate tax-efficient solutions.

2) Reduce taxes on the trusts you want to deliver to your future generation.

Life stage planning: As the University of Virginia and Purdue stated in 2018, the ideal annual income level for people to be satisfied in Western Europe is 80.000€, therefore Investec will:

1) Help you minimising your inheritance tax;

2)  Selling your business. As it often happens, not all start-ups work or some decide to close. This could be a turning point in life both for good and bad, and here Investec could come in handy;

3) Help you during the harshest periods you could bear: divorce, widowhood or any other similar event that may strike you psychologically, Investec will plan everything in the meanwhile to help you move on with life financially in the future.

The Investec savings account

Investec offers, based on how many years you want to hold your money, an interest that ranges between 1.45% to 1.75%, if you want to keep your money on hold for 3 years. This is quite average also among most European and British banks.

But some banks like First Direct, HSBC and M&S Bank offer respectively 2.75% in 2020 and therefore local banks in the UK could be a better choice than Investec.

Fees and charges with Investec

Fees and charges depend on which type of portfolio you opt for. 

It is possible that your adviser will charge you 1% to 1.5% on top of it, and there could be also wrapper charges of 1% more again.

The expected fees are:

1.25% on the first £1,000,000

1.00% on the next £1,500,000

0.75% on the next £2,500,000

0.60% thereafter

You have to pay £35 for each transaction, a flat 0.85% fee on their master portfolio service annual management and a VAT on the value of your portfolio that gets charged quarterly.

The disadvantage of being an African company

Lying on the African continent is not convenient for this company. Africa, like India, is well known to have some countries that excel in scamming, like Ghana and Nigeria. It is not usual to see how global companies coming from Africa either.

Unfortunately, South Africa is not a third world country like many portray, on the contrary, is a developing country the same way Mexico or Brazil is, with the same life expectancy and similar GDP per capita. 

Unluckily, in the conscience of most, seeing documentaries on how violent this country is, we can expect our money to disappear the moment we handle it to them. South Africa is also extremely corrupt, and these circumstances can not make it look way better than the stereotypes we think to.

Even by being an honest company, people will always have some lack of credibility due to its location and that is why, compared to many more other banking services globally, it has a net profit of just 250 million USD.

Now, by analysing the last reviews people published on Trustpilot, we’ll be seeing that some concerns are related to its position.

Most concerns, though, are related to the difficulty in contacting this company, most people say that if you contact them by phone, you will be waiting for tens and tens of minutes without receiving callbacks.

If you write them an e-mail, you could never receive an answer, and you could also lose some documents in the meanwhile because of bad management. 

Moreover, the staff on Trustpilot gives a bot answer that copy-pastes for every other customer that complains, showing that, indeed, they do not care as much as they should: ‘’I am sorry to hear about your experience with us. We will be in contact with you to assist you further’’

AES WEALTH expert research on Investec

AES WEALTH found a lack of consistency and poor performance on a large selection of their funds, in particular on their UK based OEIC funds. None of these managed to have a consistent top quartile performance in their respective sectors in their 1,3 and 5 year periods.

Investec’s UK OEIC funds have entry fees averaging 4.5% and annual fees accounting to other 3%. Therefore, UK based residents that wish to invest their money in a fund manager, given the high charges and their inconsistent and poor performance, it is better to choose other options.

Also, expat investors are poorly served too as Investec’s offshore funds currently have entry fees up to 10% and annual fees exceeding 3%.

Therefore, according to AES WEALTH, it is too expensive to invest with them, their methodology is academically questionable and you have to pay a retrocession commission to your advisor which can lead to conflict.

While Investec brand is a respected one, their fund managers are not a good option and, as most customers say, you get stuck in an underperforming fund.

If you already have a Discretionary Managed Portfolio with them and it is worth more than £50,000, it’s better to move your money to other better performing and cost-effective options. 

What are the impressions of their customers?

As there are many more negative reviews than positive ones, here’s the list of the 3 last 5-star reviews and 5-1 star reviews, in order to be proportional:

Trust-pilot, source link: https://www.trustpilot.com/review/investec.com:

  • 1-star review: Impossible to contact To open an account you need to call them by phone. I have waited 4 hours on hold without an answer. They don’t have a queuing system and they don’t have callback, so you could wait forever.
  • 1-star review: Appalling Customer Service I have tried for 5 days to log in my savings account and to reset my message but an error pop-up appears. I tried to call them multiple times and to email without an answer. I cannot print my tax certificate for my accountants, therefore cannot complete my self-assessment tax return.
  • 1-star review: Abysmal customer service I was kept on hold for 35 minutes and then delayed again they don’t care about individual customers.
  • 1-star review: Investec has TERRIBLE customer service – stay clear! If you’re a UK resident stay clear from this South African company! It shows completely that they’re based in a third world country! Your documents are lost, they never call you back or answer your emails!
  • 1-star review: Unprofessional chancers I reported them for fraud to the police. I had 2 solicitor letters demanding for money from these people I have never had any dealings with them.

Last 3-5 star review on trust-pilot:

  • 5-stars review: Excellent customer service in difficult COVID times I have recently opened an account on Investec and called them twice in a week to get some questions asked and, about interests and to re-set my passwords. In the midst of Corona, the support has been really patient.
  • 5-stars review: Great service and nice app I really like the iOS app of Investec. The private banking team seems very friendly and they support you overseas (I’m in the UK) even when it’s dark night time here). I’ve been using them for a few years.
  • 5-stars review: Very smooth opening of account I applied on Tuesday afternoon and my account was already available by Friday, good phone communications!

The Investec app

Though you may find different Investec apps, the correct one is the 50.000 one. The Investec app is available for download for both iOS and Android devices and seems easy to use and straightforward.

A drawback that you notice if you are Australian is that it is not possible to use it if you happen to live in Australia as you have to use your Australian number at the beginning to log in and there’s no ‘’Australia’’ option, but others like Georgia and Mauritius.

You don’t have any calculator that shows how much you could make after a set amount of years in the future, just how much you have invested and how much cash you have. It’s straightforward but lacks in content, it is like a barren field.

On the Investec app, differently from other apps you can upload all your documents and reprint them when you lose them, such as travel documents, real estate documents, addresses, etc…

How do you contact the support?

The support is available 24/7 both for South Africa and the UK at the telephone number: 0345 521 8482 and South African number: 0861 003 020. Currently, there’s no e-mail provided on their website, the only option is for the Investec Bank of Mauritius at mruclientrelations@investec.co.mu.

As we previously noticed reading their customers opinions, you can not expect too much from the contact support, but lately, it seems they are improving.

Conclusions

Disadvantages – – – –

Investec is a promising company in Africa that could lead to great success in the future. Unfortunately, being an African company, most people could feel threatened to deposit their money in this fund manager.

Investec may be a good option in the continent. Recently, it opened a new bank in Mauritius, but at the same time, it seems to have some issues in Australia.

The point is that it is not about lying in Africa or not. The customers that are being served are getting charged too much and they get underperforming portfolios. As AES WEALTH stated, there are much better options that have more credibility.

Investec does not provide on its website clear indications on how their investment plans work and therefore it is difficult to forecast whether is a good option against its competitors. Moreover, on your app, you can not see what you are investing in.

Wealthify and other robo-advisors offer a standard and an ethical way of investing, Investec invests creates customised portfolios too, but it is chosen by the team of experts for you.

The customer service is not helpful, unreachable and they don’t call back.

And last but not least, if you live in the UK and you want to put your money in a savings account, First Direct, HSBC and M&S Bank offer respectively 2.75% against the 1.75% Investec offers.

Also, perhaps the biggest disadvantage is that DIY investing doesn’t really work for emotional reasons.

Even though robo advice and DIY investing isn’t always the same, there is a lot of indictions that investors panic when the markets are down like in 2008 and 2020.

Advantages: + 

They are an ambitious company that wants to extend globally but has internal issues. They are cooperating with important companies in South Africa, offering their skills to hospitals, governmental institutions and other established corporations.

The app is available for both iOS and Android but it’s bland and barren of useful info. A niche you do not see often is the possibility to upload fundamental documents such as travelling and real estate documents.

Further Reading

I am the most viewed writer on Quora.com on financial matters, receiving 223 million views in the process.

In the article below, taken from my Quora answers, I speak about the following issues:

  • What are some of the worst financial investments you can make?
  • Is there one single thing that can make you rich or wealthy?
  • If you retire one day after a market crash, is that really a big deal? What strategies can be used to reduce this risk?
  • How can people outside the US invest in American stocks? Many people struggle with this issue in Africa, Latin America and beyond.
  • Are there any places left where you can live like a king for $1,000 a month globally?

To read more click below:

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