In this interview, International Investment's Pedro Gonçalves talks with Tom McGillycuddy, co-founder of tickr, an app built for the next generation of investors to make money while having a positive impact on the world.
What made you want to start tickr?
I started working in financial services with Barclays in September 2011 and felt like I'd been let behind the curtain. I'd got a glimpse at how finance works, and realised it was largely inefficient, charged extortionate fees to unsuspecting customers, and had been designed to confuse ordinary people like me. It also seemed geared up to earn revenue and profit indiscriminately, with no real thought about where this money came from and the impact of it; and all of that just didn't sit well with me at all.
We want to be the most convenient way for anyone to have a positive impact on the world"
But it wasn't until I started at Wellington in 2014 that I properly learned about investing in a granular way. I was surrounded by a group of intelligent people, world leaders in their fields, and I tried to soak up as much knowledge as I could from them.
Doing so I became more convinced that if we could channel all this knowledge and money to companies and people doing good stuff for the world, then we could change the world in the process. This led me to impact investing: investing in companies to earn money and have a positive impact on the planet. I started working in the impact team at Wellington after convincing their head of Impact Investing to take me on (with an impassioned caffeine-fuelled rant about changing the world!)
While working in team, investing money for pension funds and family offices, my cofounder, Matt Latham, and I started to think: why is there no way for us to do this easily with our own money? It felt like ordinary people were being excluded from something that we thought had mass appeal. So in 2016 we started working on the idea that would eventually become tickr, with the aim of bringing impact investing to everyone, especially people new to investing.
Do you think the financial industry leaves some people outside?
If you take investing as an example, most people never invest for their future. That's especially pronounced amongst my generation [30s]. This is a significant financial inclusion issue: you are practically robbing from your future self by not investing for your future.
But, the education system doesn't give us the tools to know how to do this, and because of that, the financial services sector has been able to earn massive fees.
Most investing apps or products are designed by finance people for finance people, especially when people aren't exceptionally wealthy. And even when people become wealthy, they have to pay huge fees to advisers because of information asymmetry.
It's our duty to make investing as simple as possible, and make as many people understand it, so that they can invest for their future.
What are the demographics of your users?
We started January 2019 with effectively 0 users, bar some family and friends, and now in September 2019 we have tens of thousands of people using the app.
Here is the profile of our user base today:
- 31 years old on average
- 40% female
- 50% haven't invested before
- On average they are investing £120 each month with us
- 70% based outside of London
We've proven that millennials want to invest and have the money to do it. Two things very few people thought we could do.
Do you believe tickr is disrupting the industry?
Absolutely. We're the first app solely focused on impact investing, where users get to provide for their future.
We want to be the most convenient way for anyone to have a positive impact on the world. The tickr app as you see it today - aligning your investments with companies addressing big problems - is just the beginning. Finances should be stacked in favour of the user, and benefit the planet, and we will shake up the industry with these two things in mind.
What projects are you currently supporting?
We've created a series of themed portfolios that address impact causes, like climate change, disruptive technology and equality.
In the portfolios are hundreds of established global business that address the themes, normally through their revenue. For example, the climate change theme has renewable energy businesses in it, that get all their revenue from, say, building wind farms.
Revenue is the purest way to determine an impact company, as they are selling the thing that has the positive impact, and it's the cleanest thing to measure. We use this data to create our themes, and then our users get to choose which theme they like the most, at a risk level they feel comfortable with.
Is it possible to invest responsibly and still get a return?
"Responsible investing" can mean many things. It can mean ethical investing (screening out companies you don't want to invest in, like tobacco companies), ESG investing (considering environmental, social and governance risk factors in the investment decision making process), and impact investing.
Out of the three impact investing has the strongest return argument and the most evidence backing it up.
With impact investing you are investing in for profit companies providing scalable solutions to some of the world's biggest problems. Problems underpinned by large unmet demand. Companies that get these solutions right and scale them, offer the chance to earn outsized returns. This is what separates impact investing from the other two, and what gives it the strongest return argument.
In practical terms, how does the app work?
Tickr is an app built for the next generation of investors to make money whilst having a positive impact on the world; users can sign up and start investing with as little as £5.
It's the first app solely focused on impact investing, where users get to provide for their future.
The user experience is designed to be intuitive and straightforward. Most people complete the signup process in 2minutes.
The main part of the sign up is the theme selection. We allow people to put their money into specific companies spanning four separate themes:
After this, users select their risk level from high, medium and low. In the app, users can obviously see their performance and balance at all times, and they can dig into the companies they are investing in and learn about the things they are doing around the world.
Do you have any expansion plans?
Ultimately, we want to be the most convenient way for anyone to have a positive impact on the world. The tickr app as you see it today - aligning your investments with companies addressing big problems - is just the beginning. Finances should be stacked in favour of the user, and benefit the planet, and we will shake up the industry with these two things in mind.
In order to get to the next stage, you'll see us strengthen our team, scale our user base in the UK and in Europe, and lay the groundwork for some real innovation in the European funds market and within our own business model. All with positive impact as the guiding light.
I think within the next 5-10 years impact investing will just be called investing. Our generation are starting to invest more, and have more money, and this structural shift in consumer attitudes and the change in whose hands the money is in will transform financial services and make it unrecognisable within the next 5 years.
We'll be at the forefront of that, as the first to market impact investment app in Europe, and companies that don't understand this shift will be left behind.
Do you think apps like tickr can start a ripple consumer effect so that people change the way they invest?
I think the ripple effect will then go beyond just investing, and to just consumerism in general. When you engage people and they become conscious of what their own money is doing, that'll spill out into their day to day expenditure. You are already seeing this with plastics, but I think it will accelerate.
You left the world of high finance for this. Would you do it again?
Yes. It was probably the best decision I've ever made.