Fintech Startups
Startups are businesses yet to go live and have a base proposition or a client waitlist.
As a fintech startup, you could be working in stealth mode or beta version and are looking to launch your new proposition to the market.
You are looking to automate parts of the investment journey for your users by allowing them to invest in a range of securities or models
You are looking to build an online platform to show a range of investments and information about them
Riester Pension
The term “Riester pension” includes products ranging from insurance policies, savings plans, unit trust agreements and home loan to savings contracts.
The saver invests a certain amount each month and can withdraw capital after retirement. Low-income savers and families with children benefit from the 'Riester' allowances while higher earners benefit from the tax advantages. Under this account, contributions of up to €2,100 can be claimed as a special expense in the income tax return.
'Rürup'-pension
Designed for the self-employed and freelancers who are not covered by statutory pension insurance, Rürup'- pension benefits are taxed in the same way as the statutory pension, but initially only partially.
The taxable portion depends on the year in which the pension commences and is fixed for life as a fixed amount. It rises continuously with later years of retirement.
Piano Individuale di Risparmio (PIR)
PIR offers tax incentives to savers investing in small and medium sized Italian companies. It can be sold as mutual funds, discretionary accounts, life policies or security deposit accounts and carries full exemption from 26% income tax if savers stay invested for at least five years.
PIR plans are aimed at retail investors resident in Italy who can invest a maximum of €30,000 per year and up to €150,000 over five years.
At least 70% of assets must be invested in financial instruments (equities or bonds) issued by Italian and/or foreign companies (EU and EEA) permanently established in Italy under the domestic fiscal regime. Of this 70%, at least 30% (or 21% of total investable assets) must be in Italian small and mid caps not included in the main index (FTSE MIB).
Plan d’Epargne en Actions (PEA)
Created in 1992, PEA is a tax-efficient investment wrapper for residents, allowing French investors to buy and sell European securities with preferential conditions.
It is considered as a simplified stock savings plan because a PEA account contains both a securities account and a cash account. The cash account is debited when a security is purchased, and credited when a security is sold or a company pays dividends.
Livret A
Established in 1818, the product acts as a savings account for French citizens and residents, and the annual returns are not taxed.
As of 2015, only one account may be held by an individual, with an amount from €10 to €22,950.
European ISA (Spanish Compliant Bond)
Spanish compliant investment bonds are tax-efficient, unit-linked platforms for EU regulated funds such as collective investment schemes and unit trusts.
To avail tax benefits on the above, the resident must invest in a tax-saving life insurance bond that contains an element of ‘risk’ and pays out life insurance over and above the plan (around 101%).
You are looking to complement users spending, saving and rewards balances with an investing solution
You are looking to offer businesses a way to earn money on their idle cash through collective investments or direct instruments
Regulatory
The wealth management and investment world is highly regulated as it involves people’s money. Generally, in order to offer an investment proposition to your customers, you will need the relevant permissions that match your business model.
The most common permissions in the wealth and investment space are:
- Arranging (bringing about) deals in investments
- Arranging safeguarding and administration of assets
- Dealing in investments as agent
- Making arrangements with a view to transactions in investments
As a startup, you may not have these permissions as you are earlier in your journey. There are two paths to obtaining them:
- Applying to the FCA to become Directly Authorised
- Becoming an Appointed Representative of a Regulatory Principal*
*We can introduce you to a number of AR Principals
You should seek qualified, independent advice before going down either of these routes, so that you are sure what permissions you require – and your obligations to your customers, the FCA, or your Principal that these entail.
WealthKernel has been providing investment infrastructure since 2015, and holds FCA permissions for its activities. You can view our full permissions on the FCA Register.
For more information on the regulatory environment, you can view our regulatory overview page here.
Business Model
WealthKernel supports all types of regulated businesses, and the most common built on our API are execution-only (XO), discretionary and advisory. Fintechs and startups usually start with execution-only propositions, as they allow their customers to make their own decisions and offer them a platform to execute trades.
Execution-only business models are often viewed as less complex than Discretionary and Advisory models as they need less compliance oversight and permissions.
You would also need access to our Orders API, which offers a single endpoint to transmit orders and execute them. We also offer a broad investment universe and allow our tenants to select which instruments they would like to offer. You can have a look at our investing universe here.
After you select your choice of instruments, we will make them available to trade via our Orders API. We currently trade once a day, i.e., all of your client orders are combined in a certain window and sent to our sub-broker once a day.
KYC
When onboarding customers into your business, you will collect information about the party during the sign-up process. As a regulated business, you will need to ensure that your customers have been through the KYC process to verify their identity and address.
WealthKernel is currently integrated with third-party KYC providers. This helps reduce the need for multiple integrations for the tenant and allows them to benefit from our existing relationships.
If you choose to use WealthKernel’s KYC service, our API lets you stay updated on the status of your onboarding users via our webhooks service and the WealthKernel Dashboard.
To learn more about our customer onboarding process and information needed for KYC checks, check out these pages - Onboarding and Opening Requirements.
If you choose an external KYC provider, you will be required to ensure that specified checks are undertaken for the safety and comfort of both companies. We will also need a Letter of Comfort to evidence the reliance we place on you.
Account Types
Accounts will form the core of your investing proposition. Every business launching a new investing proposition must consider the account types that will hold their customers' investments. With WealthKernel, your business can offer flexible investment options to customers and enable them to invest in their choice of products. WealthKernel can support all of the following account types in the UK.
Learn more about our account types on our page.
ISAs are tax-efficient accounts in the UK, that enable retail investors to save or invest without being taxed on the interest or income they earn.View API
A General Investment Account is a non-tax-advantaged account where investments are held and has no limit for the amount that can be invested.
View API
A JISA is a tax-efficient investment account for children that can be contributed to by family and friends, but only the child can access the money.
View API
Trading
WealthKernel supports a broad range of investment instruments, and all of our investments are liquid, listed and suitable for the retail market. This helps our Tenants customise their investment offering with their choice of instruments.
We currently support US stocks, UK stocks, ETFs, and Mutual Funds and also offer all of our supported instruments in fractions.
WealthKernel operates a sub-broker model and consolidates all client orders in a certain window, and sends it to a sub-broker once a day. We also settle all orders in GBP.
Custody
We act as a custodian for our Tenants, and all of our client money is held at Tier 1 banks in the UK under WealthKernel Nominees.
WealthKernel also strictly complies with the CASS rules and is responsible for safeguarding and securing clients’ money as well as records, accounts and reconciliations.
We receive regular audits from an external party to ensure that our systems and controls around Client Money are working appropriately.
Payments & Transfers
We support a diverse range of payment methods that give you the flexibility to choose an approach that best suits your users’ needs. This allows your users to make one-off and recurring deposits to their portfolios.
After WealthKernel receives a deposit from your users, we match it with the deposit expectation that contains the details of the source account.
We enable users to transfer their assets held at another provider into our accounts at WealthKernel. The transfers can be made in cash or in-specie, depending on the asset type and you and your customer's choice.
You can view the payment types we support here.
Front Ends
At WealthKernel, we believe that your front end is what differentiates you from your competition. That’s why we focus on providing all the building blocks needed to create an investment proposition without designing the website or application ourselves.
WealthKernel has publicly available API docs and a sandbox environment so developers and product owners can evaluate what can be built with our API endpoints.
Tenants - The term we use to describe our clients at WealthKernel.
