I found this little nugget in the depths of the investment prospectus:
On 16 October 2018, HMRC approved Monzo’s application to become an ISA Manager (the “ISA Approval”) to manage the following ISAs: cash ISAs, stocks and shares ISAs, innovative finance ISAs, cash junior ISAs and stocks and shares junior ISAs. The ISA Approval is in furtherance of Monzo’s marketplace strategy of building Monzo into a financial centre where customers can manage all of their money and have access to a choice of products and services from across the market.
So I guess that Monzo will be offering their own ISAs at some point in the (perhaps not too distant future).
To be honest I’d have thought that issuing ISAs would have been included as being part of a bank with the general licence anyways? But this made it sound like it wasn’t. I don’t know enough to say.
I hope that means Monzo will provide their own stocks and shares ISA, rather than aggregating the stocks and shares ISA from a third party like nutmeg, freetrade and Hargreaves landdown.
Would be cool if you could open a single stocks and shares isa and invest directly into investment products by different providers. E.g invest directly in a Vanguard fund, bypassing stock Broking apps/websites
I believe both, everywhere I’ve worked has sold their own ISAs so I’ve not come across it before but looking at the approved ISA manager list there are some that offer out others ISAs
It doesn’t really further the marketplace concept if they are offering their own - unless they are offering their own which other providers can take advantage of through the API.
So I’m the same as you, bit confused. We’ll find out soon enough
It might be a bit like insurance products - even if you aren’t providing the insurance yourself, you’ve still got to be FCA approved to act as an ‘introducer’ to the insurance product. For example, my Ltd states we get our company insurance through a certain company and as an affiliate, we recevied the following message: …‘At the moment, you refer other businesses to us under a ‘marketing affiliate agreement’ (a xxx document). Following changes to the FCA’s financial promotion rules, we’re moving you to an ‘introducer appointed representative (IAR)’ agreement (an FCA document)…The IAR agreement tightens up the relationship between insurance companies and the businesses they work with. It prescribes the limits of what you can and can’t do and, to some extent, what you can and can’t say about insurance. It’s designed to protect you, us, and the people you refer.’
I know if you actually recommend insurance products or anything, we need more detailed approval than just an IAR but I don’t know if this is the same with other financial things like ISAs (i.e. without approval, Monzo might not be allowed to go ‘Oh, we’ve notice you have a lot in your pots - you can save tax/gain interest by using an Instant Access ISA from XYZ…’).
Looking back at the prospectus, it also says this which I think is relevant for the context (which is nothing we didn’t already know):
The Group’s strategy is not to design a large number of Monzo products as traditional
banks have done but instead to focus on a core set of products and to operate as a
marketplace for other products. The intention is that customers will be able to access a
wide range of financial and non-financial products from the Monzo App to meet their
needs. For example, a customer with excess funds in their account at the end of each
month may choose to move them to a savings account or investment account available
through the Monzo App. A customer who makes an expensive purchase may choose to
insure it through the Monzo App
I think you’re spot on - my money is that they’ll be managing the ISAs but not managing the money. An ISA is simply a tax wrapper around a pot. They can offer an ISA and then allow people to choose an investment manager within the ISA wrapper.
Or perhaps they will do basic ISAs, but leave more esoteric things, like stocks and shares ISAs for the marketplace. After all, for certain basic things there really is no competition possible.
“Not to design a large number of Monzo products” doesn’t mean Monzo won’t offer their own ISAs.
Personally, I’d prefer Monzo to offer their own ISAs and investing within the app, then display the offerings of other companies for stuff like insurance, savings accounts etc… from a deep integration within the Monzo app.
