Robo-adviser Wealthsimple is to quit the UK market after four and half years and transfer all clients to rival Moneyfarm.

Canadian-owned Wealthsimple has struggled in a robo-advice market beset with poor consumer interest and lack of profitability.

In recent years Investec and Moola have pulled out of the robo-advice market and Nutmeg, one of the pioneers, has been sold to JP Morgan.

In future Wealthsimple, which has 1m clients globally, will concentrate on its home Canadian market.

Wealthsimple said today in a statement: “After careful consideration, we’ve decided to no longer provide investment services in the UK. As a result, we will be transferring all eligible accounts to Moneyfarm.”

Clients of Moneysimple are being informed today.

Wealthsimple says its 16,000 clients being transferred to Moneyfarm will pay the same or lower fees and also have access to Moneyfarm's investment consultants.

Moneyfarm’s fees start from 0.35% and are typically 0.92% on a £50,000 investment including Moneyfarm’s management fee and fund fees.

Wealthsimple, a restricted advice service, charged a management fee of 0.7% for net deposits of less than £100,000 and 0.5% for net deposits over £100,000.

Before the transfer of eligible Wealthsimple accounts to Moneyfarm clients will have access to Wealthsimple’s team of investment advisers. 

Because Moneyfarm has its own portfolios, Wealthsimple clients will see eligible accounts transferred in cash to Moneyfarm in January. After the transfer is complete, Moneyfarm will reinvest the cash into a managed portfolio based on financial goals and risk appetite. Accounts will retain their ISA or SIPP status. Wealthsimple says clients can also opt to have their funds returned to them in cash.

Moneyfarm has 68,000 clients and manages £2bn in assets.

Simon Jones of financial comparison website, InvestingReviews.co.uk, said: “The UK investment and money app market is at 'sappturation point’ and the withdrawal of Wealthsimple from the UK in order to focus on its core Canadian market is likely to have played a role in this. Though this is technically a withdrawal, it reflects one of the problems facing all money and investment apps, namely their sheer number and the intense competition.

"We are predicting a number of casualties in 2022 in what is a massively overserved market. At best we are likely to see some M&A as apps join forces to acquire, or even maintain, market share.”