Has anyone here used a robo advisor?

NullDrone

I have a friend that told me to use this website called "nutmeg.com" and apparently it allows you to manage all of your investments, it advises you what to do with your money etc but the expense is that you pay a percentage of what you earn from your investments, like 1%.

Ideally I want to start investing rather than just saving it in an ISA, I only have a bit over £8,000 and want to put the money to use, I want to get familiar with investing as young as I can, but I have trouble getting my head around it, i've read Benjamin Graham's "Intelligent Investor", my friend also had but I say that looking at warren buffetts success there's things that he didn't tell the public and he was in the right place, right time, to buy coca cola at an early stage takes a lot of smarts, but now you won't see any companies expand so large, and also I'm against companies becoming too big, I don't like to invest in them, but I like them more than the banksters.

So yeah, what's your opinion on these? Which one would you recommend? I've found a few like betterment, wealthfront etc.

And another question, what kind of return can I get on investing in stocks/bonds etc. compared to banks accounts? In my opinion bank accounts offer a terrible return, but at a bigger risk, usually you can mostly eliminate risk if you do your research and follow sound investment principles, I am a beast at analysis so I think i'd make a good investor. My friend said he earns like 12% interest, i'd rather take a little risk than not take risk, you'd lose your money over time if you kept it in a normal bank, all the ISA's i've looked at have like 2% interest rate, and most I don't qualify for as I'm really not on much money at the moment. I would like to buy a house but I don't think I'm up to that point yet, I know growing £8K isn't much but it'll make me a better investor for the future.

colsten

A robo-advisor will shoehorn you into a fairly generalised, impersonal risk profile and it won't discuss your needs with you. I would be very surprised if it is actually classified as "providing financial advice", which is a regulated activity.

Eco_Miser

Just so you know, you can get over 4%AER on your £8000, in nice safe bank accounts, which is well over inflation at the moment.
Meanwhile, have a good read here, and on Monevatorto get ideas about main-stream investing.

NullDrone

Eco_Miser wrote: »

Just so you know, you can get over 4%AER on your £8000, in nice safe bank accounts, which is well over inflation at the moment.
Meanwhile, have a good read here, and on Monevatorto get ideas about main-stream investing.

Which one is that? I've looked at the moneysavingexpert guide on savings accounts, it said that you had to deposit a certain amount each month to get those interest rates.

masonic

There's a thread on Nutmeg with some comparisons against simple multi asset funds like Vanguard Lifestrategy and L&G Multi Index. OTOH, Nutmeg underperformed the equivalent multi asset funds by 1-2% per year, presumably because of higher charges.

colsten

NullDrone wrote: »

Which one is that?

Are you seriously suggesting you do not know about accounts that pay over 4% AER on your £8000? Did you not read any of the responses to your other posts, and did you not read any MSE articles or forum posts about savings?

It is easy to get over 4% on £8,000, risk free. I would strongly recommend against going anywhere near investments before you have worked out how to get the 4%+ on your cash. Also, if the £8K is your total cash, please do not go into investments. You need a cash reserve before you do.

masonic

colsten wrote: »

Did you not read any of the responses to your other posts

Maybe our outputs are being discarded.
https://en.wikipedia.org/wiki/Null_device

dunstonh

have a friend that told me to use this website called "nutmeg.com" and apparently it allows you to manage all of your investments, it advises you what to do with your money etc but the expense is that you pay a percentage of what you earn from your investments, like 1%.

nutmeg is not a robo adviser. it gives no advice. yet it charges an ongoing amount that is comparable to that taken by advisers.

colsten

dunstonh wrote: »

nutmeg is not a robo adviser

who offers robo advisors?

Eco_Miser

NullDrone wrote: »

Which one is that? I've looked at the moneysavingexpert guide on savings accounts, it said that you had to deposit a certain amount each month to get those interest rates.

You do.
You can use the same £1500 (for Lloyds) every month, for all the accounts. it's a non-problem.
The DDs are slightly harder, you may need to open a couple of Tesco savings accounts to generate those.

The accounts? £5000 in Lloyds Club, £2000 in TSB, £1000 in Nationwide. You can move/add more into the TSB and Lloyds Regular savers at the rate of £650 a month.

dunstonh

colsten wrote: »

who offers robo advisors?

Its something the FCA want to bring in. Not sure anyone can under the current regulation and compliance requirements.