Science-backed approach to ‘democratising investment’

Investment platform Lemmi is promising to democratise wealth creation with its science-backed “robo-assisted” process.

Thursday, October 3rd 2024, 4:36PM

The platform is being launched by the team behind New Zealand Financial Planning but is operating with its own financial advice provider licence.

People who sign up are taken through a process to build a personalised plan, covering their money personality and investment goals. Investors then open an account and deposit money that is invested according to a plan devised by Lemmi.

From there, the investment can be monitored through the app. Lemmi promises to regularly review the investments and rebalance as necessary to keep the investment “in your investor sweetspot”.

Chief executive Craig Dealey said hundreds of thousands of New Zealanders were being “left behind” because they were not getting the support they needed when it came to investments.

“Lemmi is taking a fresher approach to wealth management and our aim is to make it more accessible to a wider audience.”

He said surveys had shown that many people did not know where to start when it came to seeking investment advice.

Many did not feel comfortable approaching an adviser or did not think they were in the right target market.

“It’s about removing those obstacles and enabling Kiwis to build wealth and take control of their financial wellbeing.”

He said Lemmi took a scientific approach, through a partnership with behavioural economics fintech Capital Preferences, that allowed it to factor in investor behaviour. This was designed to help investors avoid common pitfalls such as fear when markets wobbled, or an impulse to chase returns based on past performance.

“Lemmi is a bit like the Google maps of wealth management. It finds the right route to where you want to go, adapts to changes along the way according to how things have gone and what the road ahead looks like. It’s all about making it easier to get started.”

He said the Lemmi process would help people stick with better financial habits through nudges and prompts. “Understanding the science from a behaviour perspective has a huge impact on improving investor outcomes.

“[Capital Preferences] adds a real added layer of rigour and insight around individual investor preferences, perceptions and triggers.”

Most of the investment process would be conducted within the app, he said, as investors built their investment journey as they went along.

“It’s a combination of what I like to call a robo-assisted process. There’s genuine focus on the science, it’s evidence-based, properly researched and actively managed and tracked and monitored through the process.

“The combination of both investment science and manging risks appropriately as well as behavioural science, good habits and behaviours, the combination of those is what gets a good outcome.”

People could opt for “pay as you go” additional advice modules delivered online, if they wanted more.

Fees range from $15 per month for the basic service and a minimum investment of $1000 through to $65 per month for those with at least $250,000 to invest.

The “Lemmi Plus” option also costs $15 per month but includes one free advice module a year for those with a minimum investment of $100,000.

Dealey said Lemmi had a lot of financial advice experience to draw on. “The team at NZFP have been going for 35 years now so there is a fair bit of credibility and experience in there. What’s been important for me working with a group like this is the genuine intent to get good outcomes for clients. The whole Lemmi approach is making it accessible to a much wider audience, people who haven’t been able to get into it easily.

“Helping people to focus on the long term and learn as they go is the secret sauce we want to bring to Kiwis.”

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