Liquid general manager Mark Ennis announced yesterday that the two year old site would be closed at the end of the month.
He says the two main reasons the site was closed were that AMP felt it could get a better return on its investment elsewhere, and market conditions were making it a tough area to operate in.
“Liquid requires continual investment to retain its position as an innovative market leader of on-line financial services. Our analysis indicates we can get a better return for this investment from other projects,” Ennis says.
The company won’t disclose how much it has invested in the site to date, but Ennis reckons a couple of million dollars would be needed over the next couple of years to evolve the business and keep its technology up to date.
Ennis says the other significant factor was poor investment market conditions which made it hard to sell investments.
Despite that Liquid was getting to the point where it was covering its costs.
Ennis says AMP has ruled out selling the business, rather the company want to retain the intellectual property and use it within its existing operations.
Liquid is not the first online financial services business to close in New Zealand. UnityDirect closed its site on February 1 this year, and Quicken closed its extensive site soon after it was launched several years ago.
These closures raise a question about the future of online financial services in New Zealand. Ennis says Liquid has been successful in getting traffice to its site.
“Our experience with Liquid has shown that, while some people are comfortable making financial decisions independently, most people still like to have personal contact with a financial adviser. That has made Liquid a difficult business to make work as a stand-alone provider.”
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