Former Merrill Lynch directors bring new FinTech platform to market

Added 13th June 2016

Paul Richards and Giles Hutson have launched Insignis Asset Management in a bid to capitalise on what they see as a growing demand for simplified and straightforward cash management in the UK.

Former Merrill Lynch directors bring new FinTech platform to market

According to the pair, chairman and CEO of the new firm, respectively, the Insignis Digital Banking Network provides high net worth individuals, wealth managers, companies, charities and local authorities access to a single interface to multiple banking partners, which allows them to “save time while maximising return on their cash,” said Richards and Hutson.

Clients are able to deposit cash (starting from £100,000) into a hub account, held in their name, which is then electronically distributed to bank accounts that will provide the best returns, the duo said.

Through the Insignis Digital Network, clients not only have access to a broad range of products, including instant access accounts and long-term savings products, their deposits receive FSCS protection up to £75,000 per person, per authorised bank.

The founders said they were drawn to the cash deposit industry over other asset classes because they perceived a real gap in the market for cash deposit advisory services.

“There are thousands of people out there who can give you advice on equity, bond or property portfolios. There are very, very few people who are looking at the cash market despite the fact that it’s worth hundreds of billions of pounds across the different sectors and within the individual space,” Hutson indicated.

While the UK cash market was historically a very low margin market, the tailwinds from tightened regulation and continuous digital innovation have made this type of advisory service economically viable, he added.

Particularly in a low interest rate environment, “there are an awful lot of people from a security or fiduciary standpoint who are compelled to be in cash.”

Without the technological or regulatory change, “we wouldn’t have had the new entrants to the banking market to put more tension into the product offering towards saving,” Hutson stated.

Over nine million individuals hold between £50,000 and £5 million in liquid assets[1], and Corporate and Charity cash deposits are at record levels,” Richards continued.

Insignis capitalises on this change by harnessing a digital platform to make it cheaper and easier for savers and cash managers to move money around, while benefiting from FSCS protection.

“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,” Richards explained.

“Client on boarding is fast and you only have to go through the process once,” added Hutson. “From there, we can move your money around the UK banking system to take advantage of the right balance of security, liquidity and return.”

During his time at Merrill Lynch in New York, Richards said he “saw first-hand the movement of billions of dollars of investor cash move around the banking systems in order to gain greater security and protection under the FDIC program. That’s essentially what we’re doing in the UK with the Financial Services Compensation Scheme (FSCS),” he stressed.  

“With such an extraordinary volume of cash held in inactive and extremely low rate savings and business accounts, now is the time, for the industry to start looking at cash as an actively managed asset class,” Hutson added.

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