Investment manager Alexforbes has finalised the acquisition of the OUTvest digital investment platform, aligning with its goal to accelerate the group’s digital journey.
The financial services industry is regarded as a prime candidate for disruption by fintech start-ups given the maturity of the South African market, legacy technology, and convoluted investor experiences. Many players have found initial traction in South Africa but have struggled to gain the necessary scale to continue sustainably.
Last year, Moonstone reported that OUTsurance Holdings Limited had concluded an agreement to sell OUTvest to Alexander Forbes Group Holdings Limited.
In its 2023 annual report, OUTsurance said OUTvest, which was launched in 2017, had not grown as expected, and the group had decided to consider restructuring OUTvest, which included the possibility of a disposal.
OUTvest reported a loss of R27.6 million in the year to the end of June 2023.
However, it seems the new owners are confident they can turn the business around.
Viresh Maharaj, executive for retail at Alexforbes, said OUTvest fits neatly into the group’s strategy by “helping customers set goals, select investments and track their progress over time”.
The concept behind OUTvest is to enable the distribution of a range of high-quality, simple, and low-cost wealth products, through direct and intermediated channels to a range of customer segments. The platform integrates automated advice, human advice, administration, and asset management.
“We believe that combining the transformative power of financial inclusion with leading-edge technology presents a unique opportunity to make an impact on people’s lives by helping them reach their chosen investment outcome,” said Maharaj.
In a media statement, Alexforbes said that based on OUTvest’s experience, customers highly appreciate the convenience of digital services, the confidence in financial advice, and the power to control their investment decisions. The challenge has been linking these features to potential clients.
According to the statement, “the integration of OUTvest into Alexforbes places it firmly into an ecosystem focused on customer engagement, investment management and financial advice”.
Maharaj said the acquisition represented a leap forward for Alexforbes.
“We are excited to integrate with the OUTvest team, harness the technology we have acquired and unlock the opportunity to become the digital disruptor.”
