With the UK witnessing a rise in retail investors and digitalisation, there’s never been a better time to build and launch your investing proposition. Investing has been made much more accessible - new investors are overcoming their fear of financial management and preferring mobile apps to buy funds and shares.
With many new investors (54.2%) entering the market, companies have a good chance to capture this inflow to build and grow their businesses.
The current investing infrastructure in the UK is outdated, expensive and opaque - relying heavily on emails, spreadsheets, SFTP files (and even faxes!). This requires a lot of people to support, and creates a lot of manual processes and repetitive tasks.
The investment management industry faces fee pressure from all sides, with margins decreasing on products and services, and costs increasing in compliance and technology.
Modern, digital (better) technology can help:
Save time - automating away time-intensive and low-value tasks
Save money - reducing the need for additional employees and supporting legacy systems
Increase revenue - adding new revenue lines and servicing investors at scale
Recognising this, we built modern infrastructure to solve the problems that the industry faces. To enable this change, we built an API that is fast, scalable and secure. This turnkey solution offers our Tenants all of the building blocks they need to power any digital investing proposition and serve their investors at scale.
This means that our Tenants can select the services they need from us - and then focus on their user experience while we take care of the rest.
Our API has multiple endpoints for our Tenants to build their investing proposition.
The modules allow their investors to be onboarded, open accounts, fund them, invest in a range of instruments, sell down and withdraw money.
The API can be used end-to-end to help our Tenants launch their offering without having to build their own infrastructure, or they can select certain modules to fit around their existing proposition.
To find out more about which endpoints we have, we encourage you to have a look at our API documentation and guides.
To use our API for your business, you need to be Directly Authorised by the FCA or an Appointed Representative with the appropriate permissions you require from your Principal firm.
You can check out the different regulatory permissions available to you in the UK here.
WealthKernel’s API supports all regulated businesses and has mandate types to support them.
The most common types of businesses built on our API are execution-only, discretionary and advisory.
Execution Only investing propositions allow investors to make their own investment decisions, where no advice or recommendations are given. They are providing them a platform to execute their trades.
Discretionary investing businesses invest their investors' money on their behalf, selecting investments suitable for the investor according to the personal information they provide and the risk tolerance they determine.
Advisory businesses (like Wealth Managers) take into account the personal circumstances of their investors and recommend investment strategies for them, but the ultimate decision lies with the investors.
WealthKernel's mission is to offer financial wellbeing for all, and our security universe reflects this philosophy. All our investments are listed, liquid, and designed for the retail market, which will help firms comply with the new Consumer Duty regulations.
WealthKernel supports a broad investment universe, allowing our Tenants to tailor their investment offering for their users. It is up to our Tenants to decide which instruments they want to offer, but we can help facilitate introductions to Asset Managers if they need it.
WealthKernel currently aggregates all client orders in a certain window, sends them downstream to our sub-broker once a day, and settles all orders in GBP.
We also fractionalise everything in-house, so your investors can gain exposure from as little as £1.
WealthKernel charges on a consumption basis, so your commercial model will need to consider that your costs will increase in proportion to the number of investments you want to offer, and the frequency with which they are traded. Our fees are invoiced to you at the end of each month.
Fees from collective investments are generally taken care of in the price of the instrument, and more information on their ongoing costs can be found in their KIID document.
To find out more about which endpoints have, we encourage you to have a look at our API documentation and guides.View
WealthKernel holds the “Safeguarding and Administration of assets (without arranging)” permission and acts as a custodian for our Tenants.
WealthKernel ensures strict adherence to the CASS rules and is responsible for safeguarding and securing client money, as well as the records, accounts and reconciliations.
Client assets are held in Nominee Accounts at regulated custodians, which are Tier 1 institutions themselves.
WealthKernel carries out:
Daily External and Internal client money calculation, and is responsible for making good any shortfalls or excesses
Daily reconciliation of cash balances
Daily reconciliations of our client assets with our sub brokers
Monthly Regulatory reporting
Quarterly and annual Client reporting
We have a regular audit from an external party to ensure that our systems and controls around Client Money are working appropriately.
As a highly regulated business, WealthKernel maintains an accurate Resolution Pack for use in the unlikely event of insolvency.
Once you have completed your onboarding with us and have access to the necessary permissions, you will be given production keys to build against our API. This should take around a month, and you are ready to go live.
Above is an example of a user sign up flow, with some corresponding API calls used to illustrate what occurs on the back-end. Please note this is simplified for demonstration.
WealthKernel’s infrastructure serves a wide range of fintechs and wealth managers, including value-based communities, robo advisors, neobanks and neobrokers.
Here are some of the innovative businesses and investing styles we’ve supported -
The community-driven investment platform aims to reshape the way women think about investing. Alpher's mission is to support women with better investment services while addressing the growing £15bn gender investment gap. Using our modular and flexible API, Alpher will be able to support more women to engage in investing and grow their wealth.Learn more
Investing platform Wealth8 was launched to build a community and offer affordable investment services primarily to the Black and Multi-ethnic groups. Wealth8 launched its new app with our investment API and benefited from increased flexibility and faster client onboarding.Learn More
Family finance fintech Nosso offers goal-based accounts that let parents invest in their children’s future through JISAs. Nosso selected WealthKernel’s embedded infrastructure to power its investment proposition and further its mission of transforming JISAs in the UK.Learn More
You’ve reached the end of this guide. If you’d like to speak to a member of our team about anything that we have covered, please feel free to fill out an enquiry form.
API - An application programming interface (API) is a bridge that allows different software to interact and exchange data.
Endpoint - An endpoint is the point at which an API connects with a software program.
API Documentation - A collection of references, examples and guides that help developers use our API.
Production Keys - These are a set of specialised codes for accessing our API.
Retail Customer - According to the FCA, a retail customer is one who is not a professional customer or an eligible counterparty.
Consumer Duty - A new Consumer Principle that requires firms to act to deliver good outcomes for retail customers.
The FCA requires the firms to deliver a higher standard of customer care and protection and to go further to equip consumers to make effective decisions in their interests.
CASS - If a financial services provider holds or controls client money or assets, they must follow the FCA's Client Asset Sourcebook (CASS) rules. CASS rules have been created to ensure that client assets are safeguarded in the event of a firm's insolvency.
Mandate - A portfolio mandate sets the parameters to manage a portfolio. It is an order to manage a pool of funds using a certain plan that is put in place to help guide the actions and choices of the fund's manager.
Tenants - The term we use to describe our clients at WealthKernel.
Investors - The term we use to describe the clients of our Tenants at WealthKernel.
Sub-broker - A sub-broker is an agent of a broker, working with the client on their behalf. They act as the middleman between the customer and the main broker.
Fractionalise - Fractionalisation is the concept of splitting up ownership of something. Fractional investing means owning partial shares of a company's stock - so instead of owning one or more full shares of the stock, you own a portion or a fraction of one.