Circa5000 Evestor IG InvestEngine Investment Moneyfarm Netwealth Nutmeg Plum Robo Adviser Robo Investing Scalable Capital Wealthify
Technology is improving and making it easier for us to access all sorts of services. As big data, machine learning, and AI rapidly progress, there are many exciting opportunities on the horizon.
Cryptocurrencies, challenger banks, and peer-to-peer lending have changed the way we think about banking and investing. One other such newcomer to the market is robo advisers.
If you think that a robo adviser might be the right choice for you investing, we’ve put together a list of some of the best services currently available.
IG Disclaimer: Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.68% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
|*1. IG Investments
|2. Invest Engine
|9. Scalable Capital
Pros and Cons of Robo Advisers
As with all types of technology and investing, there are various pros and cons to using robo advisers. We’ve listed out a few below:
Robo adviser pros
✅ They’re convenient. If you’re new to investing or don’t want the hassle of closely managing your finances, robo advisers can make things incredibly easy. Once you’ve set your parameters, they’ll take care of the finer details and make adjustments for you.
✅ It’s easy to diversify. Robo advisers draw on a wide variety of assets from around the globe. They’ll spread your investment across multiple sectors and industries based on what makes financial sense rather than sentiment.
✅ They’re no-nonsense. Most of the popular robo adviser services offer a clear and straightforward user experience. All you need to do is enter your details and goals, and the website or app will take care of the rest.
Robo adviser cons
❌️ They’re still in their infancy. This is relatively new technology, and few of the companies that provide the service have established themselves. It can be daunting to invest your savings in such a manner.
❌️ The lack the human touch. Many investors like to have the reassurance of someone telling them where their money is going and why. It’s good to be able to ask questions and get feedback on how your investment is going.
❌️ There are alternatives. Although the fees charged by robo advisers are comparatively quite low, there are still other cheap options available. Not all advisers charge extortionate prices.
Robo Adviser Performance
Because the technology is relatively new, it’s hard to get a firm grasp on how they perform in the long-term. Additionally, there aren’t that many established platforms in the UK, and each offers slightly different features and services.
Finally, there are different levels of risk when it comes to strategy, making it difficult to compare like to like. However, with this in mind, we can look at how some robo advisers performed during 2018 to get some idea.
…many robo adviser portfolios out-performed ready-made ones from fund supermarkets.
According to the Financial Times, investors with the lowest-risk portfolios would have made better gains using a simple cash ISA. Similarly, the best-performing high-risk portfolios performed worse than if you’d invested in a fund tracking the FTSE 100, albeit with less volatility.
Obviously, this seems disappointing on the surface, but it’s hard to gauge such performance in the long-term. And, on the plus side, many robo adviser portfolios out-performed ready-made ones from fund supermarkets.
Top 10 Robo Advisers: Reviews
1. IG Investments – Editor's Choice
Have you ever really wanted a robo adviser, but can’t seem to find one that accesses the funds you want most in your portfolio?
Many of these advisers use similar funds, or will heavily invest in one company’s funds. There’s not anything wrong with that, but it may not include the funds you have your eye on.
IG Investments has some great choices, and the robo adviser model gives you access to Black Rock funds, which is a pretty rare occurrence, and definitely something that makes them stand out. They are one of the top trading platforms, particularly for robo adviser options.
This company is not new, which means they have a pretty good handle on what works, and how to really benefit their clients. They have a 45-year and running track record. Of course, the robo adviser platform is newer than that, but they bring the same skills to that area.
Some of their top choices include a share dealing savings option, as well as the IG Smart portfolio account. Both of these are fully managed, and perform well historically. IG accesses more than 18,000 financial markets, and are one of the largest CFD providers around. They are also strategically competitive in terms of fees and costs for their customers.
Visit IG Investments
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.68% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
✔️ More than 45 years of experience
✔️ Access to Black Rock funds
✔️ Competitive fee structures
✔️ Largest online CFD provider
✔️ Pre-built portfolios with no commissions added back
❌ You do have to have a minimum investment that might be harder to reach
❌ Customer service is sometimes slow to respond
2. Invest Engine
Invest Engine is great for experienced and beginning investors. In most cases, they even give you sign-on bonuses when you’re setting up services. It’s a pretty cool feature.
Before, Invest Engine kept their Robo advisers separate from their traditional DIY platform, but they have since combined everything together.
Visit Invest Engine
That means you can use the robo adviser tool, or you can make your own trading decisions, all in one single place. They created a one size fits all approach with the combination, and it’s been successful along the way.
Invest Engine uses a lot of Vanguard funds, so pricing will largely be based on Vanguard costs. This is really a newer platform, but they have a lot to offer, and it’s really great value too. They have several different investment options, and the fund fees and platform fees are reasonable for robo advisement costs.
Even though they are new, they have more than 10,000 active clients on the platform, as well as more than 500 funds in place.
If you want to take advantage of the robo advisory here, you will likely need to select portfolios managed for you. The really nice thing is that you can set up some that are managed for you and some that are managed by you if you want to have things in the same place.
You can basically choose from growth or income when you set up your managed portfolios. The income-based portfolios tend to have higher associated fund fees, but they are still reasonable. The Invest Engine mobile app is highly-rated in every app store, it’s set up to be simple and user-friendly so you have easy access all in one place.
✔️ Most affordable platform fees on the market
✔️ Rebalance quarterly, with monthly investing available
✔️ Choose your portfolio preferences
✔️ Ability to use robo services, as well as DIY choices
✔️ Awesome mobile app experience
✔️ Regulated by FCA
❌ Platform design is unimpressive
❌ The fund fees are on the high side
You may have heard of Tickr in the past as a platform. Well, Circa5000 is the new Tickr, and they’re doing a great job. We love that this robo adviser platform allows you to choose a portfolio that best meets your needs and goals.
You specify your risk tolerance, set up your preferences, and then the robo adviser does all of the work for you. This is a set it and forget it type of platform.
One impressive detail of Circa5000 is that they believe in ethical approaches. We don’t just mean ethical business practices, but also planet-based investments. This is impact investing, and it’s a great way to invest in a socially-conscious mindset. Ethical investing like this has become more and more popular in recent years.
This app takes on the stigma of “the investment platform of the human future”. It was geared towards millennials on a small scale with the impact investment approach, but they welcome anyone who wants to take advantage of their ready-made portfolios.
There are several different types of portfolios and accounts that you can take advantage of. This includes general investments, personal pensions, stocks, share ISA, and even Junior ISA accounts. This means you can set up a managed portfolio for every area, including the kiddos.
One really neat feature you will find available here is the ability to use the round-up option. Basically, you connect to your bank account and when you make a transaction, Circa5000 rounds that up to the nearest pound and invests the spare change. This helps you have regular money going in, without feeling a huge hit to your bank account.
✔️ Invest based on your needs
✔️ Everything is done for you
✔️ Focus on ethical investing
✔️ Round up program feature
✔️ Multiple investment portfolios to select from
✔️ Intuitive, easy to use mobile app
❌ Only available via mobile app
❌ Provisional information from the website could be improved
One of the new kids on the block when it comes to robo adviser brokers is Plum. While they might be slightly newer, they are still well worth a look. If you really want to just be able to set things up, and then let them work, this is a great opportunity.
That being said, you also have the full ability to monitor, track, and request re-ups or rebalances too.
This robo adviser really is all about the automated features, and giving you the ability to access everything with some of the best technology on board.
While this is all automated, you remain in control. One unique feature about Plum is the ability to set up smart rules for your investments. You can save, invest, budget, and spend all in one place. You can even set up an allowance with Plum to help track and manage your spending, which is pretty cool.
This app is about so much more than just investing. While they certainly provide that, they also kick it up a notch and simply help provide for managing your finances as a whole, and that why people are loving them.
✔️ Ready-made accounts per your risk analysis
✔️ Manage all of your finances in one place
✔️ Minimum deposit is only 1 pound
✔️ Simplified budgeting and investing
✔️ Smart technology at your fingertips
❌ They charge an annual fee on top of the management fee
❌ Learning curve to get the numbers just right for you
MoneyFarm has established itself as one of Europe’s top robo advisers. Since its launch in Italy in 2011, it has grown to manage large sums of money across the continent. It’s simple to get set up with, offering a straightforward survey which gives you a variety of recommendations for your investment.
The service is regulated by the FCA (financial conduct authority) and therefore reviews the suitability of your portfolio and recommends if you need to change.
Originally, you could start investing with as little as £1, but the company recently changed this to £500, which is still lower than some.
With MoneyFarm, you choose your portfolio design for the robo adviser models by specifying your risk capabilities and preferences. They have a total of seven portfolio options, which keeps the approach straightforward and simple in comparison to other managed platforms.
A lot of UK investors really appreciate that the investments in the portfolios are heavily focused on UK and US investments, which helps to reduce overall risk. If you’re looking for more things like Forex or futures, this may not be the fit for you. That being said, they still do have portfolios with higher risk levels if that is your preference.
✔️ Good choice for both pension and ISA investing
✔️ Established since 2011, launched in UK in 2016
✔️ Largely focused on UK and US investments
✔️ Choose from a simple 7 portfolio options
✔️ Minimum deposit requirements are reasonable
❌ Recently upped their minimum investment from £1 to £500
❌ Fees for portfolios under £20,000 are 0.7%
Nutmeg was the first robo adviser in the UK and has grown to have a large customer base with over 60,000 customers investing more than £1 billion. They offer a good selection of stocks and shares, as well as general investment accounts and a pension fund.
Fees range from 0.25% – 0.45% on fixed allocation portfolios and 0.35% to 0.75% on fully managed portfolios. The company is known for its excellent customer service and easy-to-use interface.
Nutmeg (review) has a heavy focus in ETFs, which is a top choice among robo adviser platforms. They must be doing something right, having earned the top robo adviser title in the UK. The minimum investment is 500 pounds.
You have two different options when it comes to managed portfolios, not including the various risk factor selections you can make. You can go with the Fixed Allocation manager that is 100% robo adviser. There are no additional persons reviewing management or managing.
The other is a fully managed choice, which uses robo adviser technology and is supported and monitored by in-house investment people.
✔️ Diverse range of investments and global ETFs
✔️ Excellent customer service
✔️ Options for managing portfolio
✔️ Choose fully robo or robo backed by investment team
✔️ Largest robo adviser in the UK
❌ If you have below £500, you’ll need to contribute at least £100 per month
If you’re new to investing and only have small amounts to get you started, Evestor is a really good choice of robo investor. After asking you a series of questions about your financial situation and goals, it will present you with three portfolios to choose from.
You can pick from an ISA, SIPP or general investment account, mostly using tracker funds rather than ETFs. The fees are pretty reasonable too; ranging from 0.50% to 0.52% depending on the level of risk.
One of the major draws of Evestor is that it’s a small company and it’s really attuned to beginners. That doesn’t mean that more advanced investors can’t join, that’s just where their niche lies. They fall under the Open Money platform, which is a parent company to Evestor.
So often those small investors or beginning investors aren’t really catered to. Some platforms won’t even let them join, but that isn’t the case here. The small investors can finally feel like they found a place that is suitable and keeps their needs in mind on the right scale.
✔️ Great service for newcomers to the market, with investments starting from £1
✔️ Backed by some experts in the finance industry
✔️ Option to Skype chat with a human financial adviser
✔️ Perfectly attuned to small investors
✔️ Budget-conscious approach to investing
❌ Fairly new to the market, so difficult to judge performance
Netwealth is a relatively new company to the market, launching in 2016. However, they have some really strong options when it comes to investing.
When you open an account, you’ll be asked what kind of investment you want to make, whether it’s saving towards a goal, for a pension, or just general savings. You’re then given a selection of accounts including ISAs, JISAs, and general investment accounts.
One of the big draws of Netwealth is that you can also talk to a human adviser at any time. Unfortunately, you’ll need to start off with at least £5000, which makes the service unsuitable for some.
Netwealth has a really intuitive mobile app that is designed to help you “see wealth differently”. While you rely on the automation of a robo adviser, you still get to be in control of your finances and your financial future as a whole. You have choices, and there are tons of controls within the investment app too.
✔️ Gives the option to engage with human financial advisers at any time
✔️ Offers a variety of goals for you to invest towards
✔️ Numerous types of accounts on offer
✔️ Highly intuitive mobile app
✔️ More than 100,000 users already on the platform
❌ Minimum investment of £5000
❌ No risk profiling
9. Scalable Capital
One of the fastest digital wealth management companies in Europe is Scalable Capital. They offer fully managed and globally diversified portfolios that attempt to maximise returns and reduce risk.
With over £100 million in managed assets, they can offer fees as low as 0.75% for a fully managed investment portfolio. The only drawback is that you’ll need to stake at least £10,000 in order to get started.
Visit Scalable Capital
At Scalable Capital, you can choose fully robo, but they also have options for you to manage some of your own assets with unlimited trading. It’s up to you whether you take advantage of those features. In the savings plans, execution is completely free, although in managed portfolios, you will pay a small management fee.
This company might be fairly new, but they didn’t waste any time getting into a variety of funds, and offer access to more than 1700 ETFs, as well as crypto, stocks, and other funds in the mix. And, this company knew availability from any device would be essential, so they set it up that way from the beginning.
✔️ Fully managed service with relatively low fees
✔️ Transparent service with no lock-in period
✔️ Access from mobile, desktop, or web
✔️ Invest for as little as £1
✔️ Customization to your financial needs
❌ No fixed allocation profile option, only fully managed
❌ Minimum investment of £10,000
Wealthify is another company that gives a straightforward and affordable way to start investing. You can start an account with just £1, and their intuitive platform will provide you with a range of options.
You’ll pay a 0.7% annual fee on your balance up to £15,000, and this only drops to 0.4% if you go over £100,000. One of the nice aspects of Wealthify is that you can choose between original and ethical types of investing.
When it comes to using popular options, Wealthify is it for you in the UK. It’s another of the top choices in the robo adviser setup. Wealthify has really taken the robo advisory sector seriously, and incorporated unique algorithms and analytics into their platform to work in your best interests.
Much like the majority of advisory platforms, Wealthify is regulated by FCA. In recent years, they were acquired by Aviva, so you might also see terms related to Aviva when looking into Wealthify. They’re still doing a great job here, with several recognitions and awards for their performance.
✔️ UK-based company backed by Aviva
✔️ Offers website, app, and phone support
✔️ Investments from just £1
✔️ Affordable fess with several tiers
✔️ The trading platform is lackluster, but it’s fully managed anyway
❌ No lifetime ISA or cash investments
❌ The trading platform is lackluster, but it’s fully managed anyway
What Types of Investments are in Robo Adviser Accounts
One of the top things to be aware of is what you might see in your portfolio when you use a robo adviser. This is especially important to pay attention to if you are averse to any specific types of assets.
The good news is that when you use a robo adviser, you will answer questions about your risk profile, your goals, and even your current status financially. These questions aren’t designed to seem judgmental, but instead focused to help make sure they invest wisely for you. These questions ultimately help to design your portfolio.
Every adviser will be different, and what they place in their portfolios will vary.
However, these are some of the most common assets found in robo adviser accounts.
- Mutual funds
In most cases, ETFs and mutual funds are the most popular accumulations within these managed portfolios, although it will depend on the broker as well as your risk profile.
Cost Expectations for the Best Robo Advisers
Here’s the thing. You will find a wide variety of fees that can impact the account that you invest in. If you’re investing small amounts, it could seem like the fee eats away at your investments. These are managed accounts, so it’s really better to focus on fees that are a percentage of the account being managed.
A good range is anywhere from .30 to .80 in most cases. You will find that most of the top picks fall into this area. However, it’s definitely possible to sometimes find higher or lower management fees too. Again, this may depend on your account balance, or the robo adviser that you use for your account.
It’s much easier to gauge costs when it’s a percentage like this, and that’s the most common way to be charged for robo management. That being said, keep a look out for additional fees that are sometimes incurred. Watch for trading fees, commissions, and even platform fees to fully understand what you’re facing.
What is a Robo Adviser?
Robo adviser or robo advisor? Although the name ‘robo adviser’ sounds like something out of a dodgy 80s sci-fi, it’s actually a fairly new and innovative technology.
Also known as online advisors or automated investing, it’s essentially software and algorithms that manage investment portfolios. The exact scope of this management depends somewhat on the service and provider you choose. However, generally, they’ll take care of selecting investments, rebalancing your account, and placing trades.
… it’s essentially software and algorithms that manage investment portfolios.
Once you’ve invested your money using a robo adviser, the intuitive software will then automatically make changes to align it with your targets. This makes them an appealing prospect for those looking for a no-fuss way of getting into investing. Of course, using this method to manage your money means you lose the face-to-face contact of having a human investment adviser.
How do Robo Advisers Work?
There’s no one size fits all approach to robo advising. The various companies that offer such services differ in their approach, how involved they are, and whether there’s a human element or not.
However, there are some aspects of robo advisers that are common across most trading platforms:
- You enter details of your current financial situation, goals, how long you want to invest for, and the amount of risk you’re willing to take.
- With these details, the algorithms that power the platform will look at various financial products that match your aspirations.
- They rely on statistical analysis and key financial figures to come up with a suitable investment strategy that it presents you with.
- Many platforms, particularly those based in the US, will base your portfolio on ETF (exchange-traded funds).
- Depending on how much autonomy you allow, the robo adviser will then manage aspects of the investment process.
Some services will offer you the chance to get more involved with the decision-making process, while others will take the reins for you. Your choice of robo adviser will largely determine this.
Are Robo Advisers Right for Everyone?
There are certainly times that a robo adviser won’t be the best fit for an investor. These investments have the potential to beat the market, they also have the potential to make consistent money. There is not necessarily a right or wrong way to invest, and remember that every company is different.
But as far as who should use robo advisers, it ultimately depends on your preferences. Most robo advisers are slightly less expensive than a broker-managed portfolio, but are just as carefully managed. It’s mean to be a long-term solution, so this should be kept in mind as you make your decision for investing.
If you’re just looking for short-term investments, or you want to play the market, then a robo adviser account is likely not for you. However, you might be a good fit for someone who uses partial robo advisement, and then also has a play portfolio that you can manage and trade with on your own.
There are several companies that allow you to do both, and that’s a nice feature.
Robo advisers ultimately make an affordable solution for a managed portfolio that you can put into place and then leave alone. You can add to them, but the purpose is to let the portfolio work and grow in the market, based on the design of your risk profile and the chosen portfolio you invested into.
Many of these accounts have long-standing return histories that really do show success, but as with any type of investment, there will be ups and downs, and there certainly can be risk involved as well. No account will be 100% perfect all the time.
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I am an expert in financial technology and robo-advisors with a deep understanding of the concepts mentioned in the article. The article discusses various robo-advisor platforms and provides insights into the pros and cons of using such services. It also touches upon the performance of robo-advisor portfolios and reviews the top 10 robo-advisors in the UK market.
Here's a breakdown of the key concepts and information covered in the article:
Introduction to Robo-Advisors:
- Definition: Robo-advisors are automated investment platforms that use algorithms and software to manage investment portfolios.
- Mention of big data, machine learning, and AI contributing to technological advancements in the financial industry.
Pros and Cons of Robo-Advisors:
- Convenience for new investors.
- Easy diversification across global assets.
- User-friendly experience.
- Relatively new technology.
- Lack of human touch.
- Alternative options with varying fees.
- Challenges in assessing long-term performance due to the newness of the technology.
- Mention of robo-advisor portfolios outperforming ready-made ones in certain cases.
Top 10 Robo-Advisors and Reviews:
- Detailed reviews of each robo-advisor, including features, fees, and pros/cons.
- Platforms covered: IG Investments, Invest Engine, Circa5000, Plum, MoneyFarm, Nutmeg, Evestor, Netwealth, Scalable Capital, Wealthify.
Types of Investments in Robo-Advisor Accounts:
- Common assets found in robo-advisor portfolios: ETFs, mutual funds, stocks, futures.
- Customization based on the investor's risk profile and goals.
Cost Expectations for Robo-Advisors:
- Fees typically range from 0.30% to 0.80% of the managed account balance.
- Consideration of additional fees such as trading fees and platform fees.
What is a Robo-Advisor and How do They Work:
- Definition of robo-advisors as software and algorithms managing investment portfolios.
- Process involves entering financial details, setting goals, and the algorithm suggesting a suitable investment strategy.
Suitability of Robo-Advisors:
- Discussion on when robo-advisors might not be the best fit for investors.
- Consideration of robo-advisors as a long-term solution for managed portfolios.
This comprehensive overview provides valuable information for individuals considering robo-advisors for their investment needs. If you have specific questions or need further details on any aspect, feel free to ask.