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.
- Both Wealthsimple and
Wealthifyallow you to invest in a range of products. General portfolios, ISAs, Junior ISAs and Pensions are all supported by both services.
- Both offer socially responsible and environmentally focused investment options – Wealthsimple call it socially responsible investing. Whereas
Wealthifyrefer to it as ethical investing. Wealthifyhas 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.
Wealthifyhas 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
Wealthifyis a UK company. Born in Cardiff and recently acquired by Aviva. Wealthifywill 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,
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 a portfolio of socially-responsible companies and stock. If this is important you, it’s a point which works 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.
Wealthsimple, similar to other platforms which will let you build a pension portfolio, also provides this option. Although this is now becoming fairly standard across most of the top UK ‘ready made’ investment platforms.
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.
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.
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
Using The Service
You can also take advantage of the service’s refer a friend option, where you will receive certain perks if you introduce people to the product.
What Fees Do
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.
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: Pros and Cons
Wealthsimple: Pros and Cons
- Wealthsimple’s straightforward service is already well-loved in North America.
- Unlike some other robo-investment platforms, you can get access to tailored financial advice from qualified experts.
- There is a pension portfolio option.
- 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 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
Wealthifyfrom £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.
- You can also get £25 credit when you sign up via my link and invest £500.
- The sign-up and setup process is very simple, and you can get started extremely quickly.
- The majority of investment vehicles are offered here such as ISAs, junior ISAs, pensions and general investment accounts.
- You can also choose their ethical investment product (commonly known as socially responsible investing) is that’s important to you.
- 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
- You can manage your complete portfolio via app, but you won’t be able to choose your investments.
Wealthifyhas a little more data to show for its running than Wealthsimple.
- Aviva, a leading name in UK finance, owns
- The service is well-suited to beginner or less confident investors.
- You won’t be charged for closing your account.
- Additional transaction fees may apply along the way.
- There is no financial advice available from human experts although their customer support is excellent.
- There are no additional perks for high earners, beyond the drop to 0.4% annually.
- 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 difference lies in