We’re living in exciting times where you can become an investor with just a few taps on your phone – that’s robo-investing for you!
And just in case you're not in the know, robo-investing services (also sometimes referred to as 'robo-advisors') are automated investment platforms that invest on your behalf. This is what Wealthify is.
If you’re looking to take the plunge into investing using an online investment service, make sure it’s the right choice for you by comparing the pros and cons.
Let's start with the pros
They’re easy to use
It’s often assumed that you need to have knowledge of finance or stock markets to start investing, or have loads of time to research what to invest in and keep an eye on how the markets are performing. But that's simply not true. With robo-investing platforms like Wealthify, everything is done for you as they'll choose what you invest in.
With Wealthify, all you need to do is choose the type of Investment Plan you want (we offer Stocks & Shares ISAs, Junior ISAs, General Investment Accounts, and Personal Pensions). Then tell us how much you want to invest and how often, and answer some questions so we can determine your appetite for risk. Our investment experts will then build you a diversified Investment Plan, and manage it for you.
They'll keep on top of things that could impact the markets (like global political events and economic trends), and make changes when needed to help keep your Plan on track. All you need to do is top-up your investment as and when it suits you.
They make investing affordable
You don't need to be wealthy to become an investor. Many robo-investing platforms allow you to start investing with a small amount of money. In fact, at Wealthify, the minimum investment for our Stocks and Shares ISA, Junior ISA and General Investment Account is only £1, and although it's higher for our Personal Pension, you can still start with just £50.
And no matter how much or as little you put in, we'll ensure that your money is split across a range of different assets and regions. Doing this means that you're not relying on one investment to do well, so it could help to spread your risk.
And remember: regardless of the investing route you take, don't forget about fees and charges.
If you opt for a traditional wealth management service, your fees might be higher as you’ll have one person looking for investments and monitoring what’s happening across markets. However, robo-investing platforms will typically have an investment team, but use computers to process and analyse market data, which allows them to keep costs lower.
At Wealthify, we charge a simple management fee of We charge a simple annual fee of 0.60% for general investments (and then an even lower rate of 0.30% on the portion of a Wealthify Personal Pension over £100,000)., and this covers everything we do. As with investments, other costs can apply, but we aim to keep these as low as possible – this is around 0.16% for our Original Plans and 0.7% for Ethical Plans. Find out more about our fees.
And now, for the cons...
They’re not financial planners
Robo-investing services aren’t always designed to give advice. At Wealthify, for example, we can help you if you have issues setting up your Plan with us or have any questions about how it all works, but we're not regulated to give advice on whether investing is right for you.
If you’re looking for someone to thoroughly analyse your personal situation or tell you what to invest in, then online investment platforms that can't offer advice might not be the most suitable option for you. However, if you want a tool that helps you easily dip your toe in the investment world, then robo-investing could be a good choice.
Even if you've already invested before, a robo-investor may be an option to consider if you don't have the time to keep an eye on the markets and want someone to make the decisions.
You can’t choose your own investments
When you invest with a robo-investing platform, you don’t get to choose your investments. Instead, it will be up to their investment experts to choose where your money goes, and typically, you can’t get a bespoke Investment Plan.
However, that doesn’t mean that you don’t have any say over what you invest in. Many robo-investing platforms offer a diverse range of investment products, like Stocks and Shares ISAs, Junior Stocks and Shares ISAs, and Ethical Plans. The latter allow you to invest your money in companies that are having a positive impact – and at Wealthify, our Ethical Plans aim to exclude the tobacco, gambling, weapons, and adult entertainment industries.
They'll also let you choose how much you invest, and take a level of risk that suits you. At Wealthify, for example, we offer five investment styles based on different appetites for risk. Find out more about how we invest.
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 provide financial advice. Seek financial advice if you are unsure about investing.
