Robo advisors

afis1904

I've got a small lump sum (about 2k) as well as monthly contributions to invest and as I am new to this and do not have a lot of time I was looking at Robo advisors. I know that they don't get you a return as good as you can get with manual investment but a medium risk plan there would probably still be more effective than savings accounts.

I know some of them also offer quite decent sign-up bonuses. Does anyone have any experience with any of those platforms and has any recommendations?

SonOf

I was looking at Robo advisors

Whilst robo-adviser has been the generic term used to cover them, its more robo-guidance than advice. Mostly flow chart based on how you answer questions and then you self certifying you have chosen that risk level.

Does anyone have any experience with any of those platforms and has any recommendations?

None of them are platforms. They are a very limited option which is ideally suited to your value. Although, picking HL with HSBC GS Balanced would be just as easy and likely cheaper. (HL is not the cheapest by a long way but their web interface is good for a new investor).

afis1904

Thanks for the advice, I'll look into it. Does anyone know of any cashback or similar deals that any of them have on right now?

Alistair31

Beware of risk of going into the wrong/expensive/inappropriate investment. Fees and product are far more important that an initial cashback gimmick. It’s you who usually pays in the long run.

pip895

What are you saving for?
One of the best “cash bonuses” around at the moment is in a LISA. You put in up to £4000 the government puts in up to £1000. Only good if you are saving for your first house or for retirement though.

Otherwise as others have said I’d be a bit wary of cash bonuses.

afis1904

Yeah, I don't really know what I would be saving for so it would just be a normal S&S ISA. I was just wondering if using one of the Robo advisors could pay off or not as I would prefer to not do the investments myself (at least not initially).

I have looked at comparisons but I could only find them for one year.

ivormonee

afis1904 wrote: »

I've got a small lump sum (about 2k) as well as monthly contributions to invest and as I am new to this and do not have a lot of time I was looking at Robo advisors. I know that they don't get you a return as good as you can get with manual investment but a medium risk plan there would probably still be more effective than savings accounts.

I know some of them also offer quite decent sign-up bonuses. Does anyone have any experience with any of those platforms and has any recommendations?

With £2k to invest I don't believe any robo-adviser or platform is likely to offer much in the way of a cash enticement bonus; possibly £25 or something, as they are usually tierred when they are offered. If you were looking for a bonus of, say £1,000, that would require a transfer of probably at least a few hundred thousand; your £2k would not generate that level of bonus (otherwise they would never recoup their money through their charges in your lifetime).


You said you "don't have much time" so the monthly amounts can be set up as auto re-investments, so you wouldn't need to do anything more than the initial set up, in much the same way as you would if setting up a robo account.


"I know that they don't get you a return as good as you can get with manual investment" - not sure how you have arrived at this understanding. What is a "manual" investment - I presume you just mean one that you "do yourslef" rather than leaving to an autmated bot running an algorithm designed by the adviser. If so, there's no truth in that. An algorithmic approach is essentially making investment decisions based on a standardised, computerised method with specific ideas built into the algorithm. There's no consistent over or underperformance compared to any particular investor taking a DIY approach.


And, finally, for £2k all you really need to do is just pick a multi-asset fund, low cost, and on a platform that won't charge very much for it. (This is not advice; just my own opinion). And as an example, a Vanguard lifestrategy fund (the specific one depending on your age, risk profile etc.) will cost you £7.40 per year on the Vanguard platform and will give you a nice, easy and cost effective way of having £2k invested.


If you really want to go down the Robo route then there are several established ones to choose from and I'm not sure if any particular one is all that better than the others; most don't publish details of their portfolios nor do they publish their performance data (I know of two that do, but I don't believe the others do) so it might be tricky to get like-for-like comparisons.

afis1904

Thanks a lot for this. I was purely basing the returns bit based on what I had read. I will research on my own a bit more and let you know what I went for