Ever check on the results of your Wealthify Plan and wonder who’s doing the hard work of looking after your investments for you? Assume the decisions are made by clever algorithms and systems?
Although these help guide us when it comes to choosing where to invest, at Wealthify, we actually have a team of investment experts who have years of experience and will make all of the investing decisions for our customers.
This involves the team taking a long-term view of the world, constantly keeping on top of various factors that can impact how the markets perform such as news, economic trends, and global political affairs, which allows them to make quick decisions to help keep your Plan on track.
One of those people is Kyle Cox, our Deputy Chief Investment Officer. Kyle has been a key asset in Wealthify’s Investment team since 2020, initially taking on the role of Head of Fund Research. He was then appointed Deputy Chief Investment Officer in 2022.
Keep reading to find out more about how we decide what to invest in and how we ensure that the funds that make up our Ethical Plans meet the high standards that we – and our customers – have come to expect.
How do we invest for our customers?
At Wealthify, our mission is to make investing accessible and affordable to anyone. There’s no need to be a stock market expert, have thousands of pounds available to invest, or pay massive fees to be able to do so. Instead, we keep things simple by doing the hard work for you as. We’ll choose your investments for you, building a fully diversified Plans to help spread your risk. We’ll also frequently rebalance your Plan to help lessen the impact that negative market events could have on your investments while still giving them the best opportunity of growing your money over the long term.
We also work hard to keep our fees as low as possible, providing full transparency on how much you could expect to pay for us to look after your Plan for you, and this is based on whether you have an Ethical or Original Plan. You find out more about how much we charge to manage your investments for you using our fees calculator.
So, how do we do this? Well, if you open a Plan with us, your money will be invested in a number of funds, and these funds will contain a collection of different investments (such as shares, government bonds, cash and property, and sometimes commodities). This allows us to keep our costs low while ensuring that our customers’ Plans are fully diversified, which helps to spread your risk as you won’t have to rely on one type of investment performing well.
As people like to say, don’t put all your eggs in one basket!
The mix of funds in your Plan will change over time and will depend on your appetite for risk, as well as how financial markets are performing at the time. In fact, we actually offer five different investing styles which align with your risk appetite –all the way from ‘Cautious’ to ‘Adventurous’.
How do we decide what companies to invest in?
When it comes to choosing what to invest in, in our Original Plans, we mainly use low-cost ‘passive’ investments. These passive funds let us track a market index like the FTSE 100, which is composed of the 100 largest companies listed on the London Stock Exchange.
When it comes to our Ethical Investment Plans, we use active ethical funds. ‘Active’ investing involves choosing investments that you think will do better than the market as a whole in a bid to outperform it – so it requires more work than passive investing. This is why it costs a bit more to invest ethically with Wealthify.
In the case of active ethical funds, the fund managers will examine the investments in more detail, ensuring that they maintain their ESG (Environmental, Social and Governance) standards over time. They will also consider companies that are willing to change their practices to be more ethical. This means that the fund managers could have the power to initiate change by ensuring that more and more businesses are striving to do good.
Because of this approach, meeting with fund managers is a key part of our process in the Wealthify Investment team – and this is something we do frequently as we take our relationships with those that run our funds very seriously. We value transparency and communication highly in this respect, and always try to keep a good balance of staying in the loop while trusting our chosen managers to deliver on their objectives for us and our customers.
This means that we spend a lot of our time as a team assessing the funds. As part of this process, we will start by looking at the qualitative aspects of the fund, such as who is running it and how they go about it.
We’ll then focus on the numbers side – so, understanding the value proposition, both in terms of the fees and the fund’s long-term performance. Essentially, what we’ll be looking for is evidence that the fund could consistently perform over multiple market cycles and that it basically does what it says on the tin at the end of the day!
When it comes to fees, another area that our team spends a lot of time on is negotiating them with the fund managers. In fact, we’re constantly looking to drive down the fees we pay for our funds so that we can continue to make investing affordable and accessible for our customers.
Do we really use robots to help us invest?
At Wealthify, we use clever technology to deliver the information we need to streamline the human decision-making process and help us make the best decisions for our customers. So, the answer is… no. Our team is in fact made up of real humans who are there to look after your investments for you and help you with any queries you may have.
What do you look out for when choosing the investments that go into Wealthify’s Ethical Plans?
We know that for many people, supporting organisations that align with their values is extremely important to them. But despite what you might think, you don’t need to push aside your beliefs in order to invest in the stock market. With our Ethical Plans, we make it easy to invest in companies that are having a positive impact on society and the environment.
And if you’re worried that you won’t have any control over the types of businesses your money is supporting because we choose your investments for you? You can rest assured knowing that we constantly keep an eye on the funds in our Ethical Plans to check that they’re maintaining the high standards we expect.
But you probably have one question left…
What is ethical investing? And what makes an investment ‘ethical’?
Well, this is a somewhat subjective term and will depend on your own personal beliefs and values– and one thing to bear in mind is that ‘ethical investing’ and ‘sustainable investing’ are not one and the same.
Check out this blog if you want to learn the difference between ethical and sustainable investing.
However, with our Ethical Investment Plans, we invest in businesses that are committed to making a positive impact through their environmental, social and governance (ESG) practices. This means that the company may be making big strides towards becoming more sustainable (as an example) or they might be doing great work to support their local community or their employees.
Our Ethical Plans also aim to exclude industries that are can be harmful to human health – such as gambling, tobacco, weapons and adult entertainment companies.
Wealthify makes is simple and affordable to invest in a way that works for you. Open a diversified Investment Plan with as little as £1 (or £50 for a Personal Pension), pay in as often as you want, choose a risk level that suits you, and we’ll take care of the rest of the decisions. And if you want to invest in ethical companies, it’s as easy as selecting the ‘ethical’ option when you go to set up your Plan.
Why not find out more about what we do?
Please remember the value of your investments can go down as well as up, and you could get back less than invested.
Wealthify does not offer financial advice, you should seek financial advice if you are unsure about investing.
