For those who may be unaware, robo-investing is a truly modern way to make money. As the term suggests, robo-investing allows you to invest in a variety of stocks without having to do any of the nitty-gritty yourself. An automated investor will act on your behalf to invest in exchange-traded funds, or ETFs. You can use these systems to automate your dividend investing and to update your portfolio in line with the markets.
What’s more, these platforms are attractive thanks to their free apps. Two of the biggest names are Wealthsimple and Wealthify, both of which have taken time to grow and develop over years of market changes. But which of the two platforms is really worth your time and money the most? Is there a clear winner?
In this review, I’ll break down robo-investing for you in a way for you to be able to choose a platform you can be confident in. Investing is something which takes years to learn how to perfect. Do either of these brands make any of it easier on you? Let’s take a look.
Wealthsimple Vs Wealthify: A Quick Summary
- Both Wealthsimple and Wealthify allow you to invest in a range of products. General portfolios, ISAs and Junior ISAs are all supported by both services.
- However, Wealthsimple is a breakout robo-investor in that it offers you a socially-responsible option. This means that you can choose to only ever invest in companies which are graded as socially-responsible.
- Wealthsimple also offers a pension investment service, while Wealthify doesn’t.
- Wealthify has a low minimum investment threshold of £1. Wealthsimple, meanwhile, has no threshold at all.
- Wealthify’s annual management fees start at 0.7% per annum, but will decrease to 0.4% when you have more than £100,000 available. Comparatively, Wealthsimple applies a fee of 0.7% on anything up to £100,000, applying a rate of 0.5% after that.
- Wealthsimple, however, does apply additional costs of 0.2% beneath this.
- Wealthify has loyalty ‘circles’, which will reward you when you refer people to start investing with the service.
- Wealthsimple has a dedicated plan set up for those who invest more than £500,000, as part of their ‘Generation’ service.
- Both services are set up to help reduce the amount you pay in investment fees over years of portfolio management.
- Both have apps available for download via iOS and Android.
- Wealthsimple is relatively new to the UK, having started life in North America, while Wealthify has a little more data to go on for us to compare and contrast.
- Wealthify will warn you if the system feels investing is not best suited to your financial profile, while Wealthsimple won’t stop you from moving further along the sign-up process.
What is Wealthsimple?
Wealthsimple is a robo-investment service which has debuted in the UK after doing the rounds in North America. Presented as a simple, straightforward auto-portfolio service, it is perhaps aimed at beginner investors more than those who have years of experience.
That being said, those who use Wealthsimple do stand to benefit from a series of premium benefits. Their ‘Generation’ service, for example, allows you to get access to closer inspection of your investments, as well as more detailed long-term planning. There are also perks for those who invest more than £100,000, with airport lounge access and more besides.
Wealthsimple is an automated investment service which works by taking chances on customers’ behalves. This will likely be appealing to people who are just getting started building their own portfolios, and who may not necessarily know which stocks or markets to pick.
How Does Wealthsimple Work?
With this in mind, Wealthsimple can be set to work by allocating assets. From the outset, once you have chosen an ISA or plan of choice, you can decide how much you want to invest, and for how long for. The app and site will give you a calculation letting you know how much you could expect in terms of a return.
While Wealthsimple drives an automated portfolio system, there is always going to be some manual monitoring from behind the scenes. In fact, Wealthsimple advises that you have access to seasoned experts around the clock.
You can then rely on the service to diversify your funds as much or as little as you’d like. You can easily choose how broad you’d like this scope to be. Wealthsimple operates on a basis where it will invest small amounts in various markets on your behalf, and will only do so once your risk levels have been identified at the point of signing up.
The appeal of being able to reach out to advisors – despite the automated service – is a fairly big plus in my book. Not all robo-investment services are so upfront about giving human support away so easily. That’s why, in my opinion, Wealthsimple is likely to be a good option for anyone who is just getting started.
Speaking of getting started, let’s take a look at what you’ll need to do to set up your first portfolio(s) on the platform. Straight off the bat, you’ll be asked a variety of questions with regard to your investment intentions. For example, you may be saving up for a deposit, or you could be investing for the future.
In any case, these steps will help Wealthsimple to understand what it is you’re looking for from an automated portfolio management service. The more precise your answers are, the better it will perform to your standards. However, don’t worry – as the questions aren’t that complex. In fact, the questionnaire is actually pretty refreshing if you’re used to heavy questioning from other services. However, some form of block or cap to prevent ‘unsuitable’ investors from proceeding would be welcomed.
Using The Service
Wealthsimple is fairly easy to use via the app, and while you can set the program running to act completely on your behalf, you can make the choice in investing further funds as you see fit. Once you’ve signed up and you’re ready go, you’ll be able to make selections for portfolios based on what the service feels is appropriate for you. These can be fairly well-diversified; however, without a block on investors who may not benefit from the scheme, it may be worth taking some of this data with a pinch of salt.
Wealthsimple’s ready-to-go portfolios are easy to dip in and monitor at any time. As mentioned, you can even ask for help from a dedicated expert. This is always a good thing, and especially given the fact that their team is always looking over portfolios to make sure investors aren’t disappointed with the results. It’s a system that you can leave alone to make reasonable choices based on what you are looking for in the long run.
What Fees Do Wealthsimple Charge?
Wealthsimple offers competitive fees in the sense that you’ll never face more than 0.7% basic per year. However, an added 0.2% will apply when investments start to bear fruit. This basic rate will apply for your first £10,000, which appears to be standard across many robo-investor services. However, once you’ve breached the £100,000 threshold, you’ll be given extra perks. The biggest perk is, of course, the drop to annual fees of 0.5%. However, that underlying 0.2% is always going to be in place.
Wealthsimple leads the way when it comes to transfers and applicable fees. Simply put, there aren’t any. The Wealthsimple system is set up to ensure that you won’t get penalised for moving money to other providers. Providing you invest at least £5,000 in Wealthsimple, the service will also waive transfer fees from another provider for you. Make sure to put money into an ISA to stand to benefit from this deal.
Some investors may find other managed packages or fixed asset systems which are cheaper for them when it comes to the £100k threshold. In fact, Wealthify wins this side of the debate, though I will of course cover their side of things a little further down.
What Does Wealthsimple Invest In?
Wealthsimple invests in stocks and products it feels are in line with your long term financial needs. It will aim to diversify as much as possible, casting small amounts of money into stock which will hopefully pay handsomely in the long run.
Wealthsimple will let you invest in socially-responsible companies and stock, too, which appears to be a fairly unique feature in line with the competition. If this is important you, it’s a point which works seriously in the platform’s favour.
Wealthsimple focuses on providing a wide-open approach to investment, meaning what it will invest in will vary depending on your needs and what you are hoping to achieve. Thankfully, you can tweak this if you feel you need to.
Interestingly, Wealthsimple also stands apart from other robo-investment platforms as a service which will let you build a pension portfolio. Quite why this isn’t already so-widespread remains to be seen.
Is Wealthsimple Insured?
Yes – don’t worry. Wealthsimple has asset protection of up to £85,000, which is overseen by the FSCS. Anything you invest in will be fully secured and monitored, meaning this is a service you will be able to put your trust in.
What is Wealthify?
Wealthify is a little better-known than Wealthsimple in the UK, but it has a remarkably similar approach to auto-investing. It offers a simple array of products and services, and providing you invest at least £1, you can benefit from a wide variety of options and markets.
Wealthify is notable in the fact that it has a major investor already interested in its service. Aviva, previously known as Norwich Union, bought majority stake in Wealthify, which largely helped to identify it as a market leader in robo-investing. Certainly, it didn’t do any harm for the industry as a whole. If you’re already an Aviva customer, you may have been recommended Wealthify as a service in the past.
Wealthify is famous for being fairly affordable compared to other auto-investors, and while this is a good thing, does it necessarily mean you’re going to get the best returns for your money? As with Wealthsimple, Wealthify has a large team of experts who work hard to monitor portfolios to ensure that they are always on target. Therefore, it is another robo-investment service with at least some, arguably necessary, human support and oversight.
How Does Wealthify Work?
Wealthify works in a very similar fashion to Wealthsimple. In fact, as it is also clearly marketed to people who are either new to investment, or those who are unsure what to do to get started, it can be hard to tell the key differences between the brands.
Wealthify’s portfolio system will recommend how to split your money across various markets. It’s a lot quicker to set up and use than some other robo-investment systems on the market, which should appeal to those who just want to get in and get started. You can choose from a variety of products, such as ISAs and general investment packages.
Wealthify works on your behalf to invest in passive funds on the whole. This is a good thing, as it can mean that money is spread thinly across a wide selection of choices. In this sense, it is fairly similar to Wealthsimple. You can also rest assured that there will always be someone on hand to look over your portfolio to make sure the robo system isn’t flying wildly away from your targets.
Getting set up and started on Wealthify is, as mentioned, very much a breeze. As with Wealthsimple and other robo-investment platforms, you will be asked a series of crucial questions before you begin. Therefore, the service can then make recommendations to you based on what you want to achieve in the long run.
You will be asked simple, yet probing questions with regard to your finances. Don’t be worried – as this information is all going to be taken into account. You will also be graded and measured based on your understanding of investment in general. This is how Wealthify assesses for risk, and it is also how it safeguards new investors against making choices they may regret.
Wealthify will stop you outright if it appears that you won’t benefit from investing. Wealthsimple doesn’t do much more than give you a simple warning message before letting you continue. I feel the block is a nice touch. Ultimately, investing can be a risky game if you’re not well-prepared. While Wealthify strives to make things as simple as possible, it’s still a fairly complex process to get into.
Using The Service
Using Wealthify is as simple as you’d expect. There is a nice balance of manual and robo systems in place here, meaning that there is never ‘too much control’ given to either hand. Once you’ve answered Wealthify’s standard questions and are ready to get started, you can adjust risk settings as you go. This is generally a good way to see what you could potentially get out of your automated plan.
Unlike Wealthsimple, Wealthify doesn’t have a team of advisors on hand to help. This is because of regulation issues. However, they do at least provide plenty of tools for you to be able to take control of your portfolios as and when you need to. There is also always a team of humans making sure that automated portfolio plans are working as they should.
You can also take advantage of the service’s ‘circles’ option, where you will receive certain perks if you introduce people to the product. How much you get out is obviously going to depend on how much your referees make, however, it’s still a nice little perk.
What Fees Do Wealthify Charge?
Wealthify’s fees do set the service apart from the pack in a lot of ways. While you’ll benefit from 0.7% on anything up to £15,000, this does actually decrease gradually. Once you’ve made more than this, you’ll get access to rates of 0.6%, then 0.5% when you have more than £50,000, and 0.4% on anything over £100,000. This just edges ahead of Wealthsimple, if only by a sliver!
However, do also be aware that there are underlying fees which pop up along the way thanks to transactions. These fees aren’t especially clear from the off, as they can vary depending on how your investments perform. These charges are to be expected, at least somewhat, however, a little more precision in the detail would be welcome.
What Does Wealthify Invest In?
Wealthify works similarly to Wealthsimple in that it spreads your money across small ETFs for the most part. This means that your money can be diversified across more markets and options, meaning you won’t feel like you are putting all of your eggs in one basket. Do bear in mind that, as is the model for robo-investing, you won’t have any control over what you’re investing in. You just have to trust Wealthify on this!
Is Wealthify Insured?
Wealthify, like Wealthsimple, is overseen by the FSCS, which means you’re protected all the way up to £85,000 in case things crash. It may seem like a negative feature, however, in the wild world of investments, you can never be too careful.
Wealthsimple – Pros and Cons
- Wealthsimple’s straightforward service is already well-loved in North America.
- Unlike other robo-investment platforms, you can get access to tailored financial advice from qualified experts.
- There is a pension portfolio option, which again, sets the brand apart from the pack.
- You won’t be charged for moving your money across to another provider.
- Wealthsimple will pay your transfer fees incurred from a provider you move from, as long as you invest at least £5,000 in one of their ISAs.
- You can manage and monitor your investments from a mobile app.
- You can start investing from as little as £1.
- The service is overseen by human experts who make sure that robo services are continuing to do what you want.
- There are extra perks for those who invest more than £500,000.
- You can also choose to invest solely in socially-responsible stock if you wish.
- Your assets are protected by up to £85,000 via the FSCS.
- As a robo-investment service, you’ll have little control over your investments once you set Wealthsimple to work.
- If you are deemed to be unsuitable for the world of investment, Wealthsimple won’t stop you from proceeding. It will warn you, but rather worryingly, you can still press on with signing up.
- There are underlying fees of 0.2% which apply to investments along the way.
- Fees are not as competitive as other providers.
- The app and site design is perhaps a little less user-friendly than some other robo-investment platforms.
Wealthify – Pros and Cons
- You can invest in Wealthify from £0 – it costs nothing to get started.
- Wealthify’s scaled fees allow you to drop from 0.7% annually to 0.4%. This is 0.1% lower than Wealthsimple.
- The sign-up and setup process is very simple, and you can get started extremely quickly.
- As with Wealthsimple, up to £85,000 of your assets will be protected by the FSCS.
- You can make more money through loyalty circles, and introduce friends and family.
- The sign-up service will protect users who may not benefit from investing. You will be rejected if it is deemed that there is too much risk at stake.
- You can manage your complete portfolio via app, but you won’t be able to choose your investments.
- Wealthify has a little more data to show for its running than Wealthsimple.
- The brand has been invested in by Aviva, a leading name in UK finance.
- The service is well-suited to beginner or less confident investors.
- You won’t be charged for closing your account.
- Additional transaction fees will apply along the way.
- There is no financial advice or support available from human experts.
- There are no additional perks for high earners, beyond the drop to 0.4% annually.
- There is no pension option, nor is there a plan in place for socially-responsible investing.
- It may not be the best platform for anyone who wants to take full control of their investing.
Robo-investing isn’t for everyone, as it does require you putting a lot of trust in a set of algorithms. However, statistics show that this may well be the future of smart investments.
Wealthify and Wealthsimple are both very similar in their approach, and in their ethos. The main differences lie in Wealthsimple’s range of services, and in Wealthify’s fees. Ultimately, it may be worth taking a look at both before you make a final decision. Wealthify, however, may just edge it for me based on its performance so far, and its big-name stakeholder. That’s a lot of confidence to put upfront.