Wealthify Robo Investment

MoneyMan01

I see there is a deal where they will give £40 cashback if I invest £400.

Have a few questions:

- Has anyone here done it?

- If I were to open it and put £400 in, it says you have to wait until 6 months (and then 30 days after that for the £40 to show), would I be able to pay into any other stocks and shares ISA's in the meantime?

- What options are there? Do you open it then select "Low", "Medium" or "High" then away it goes?

Basically, I was looking at this as a way of making 10% on £400 and then look into using a more cost effective and potentially more hands on S&S ISA in the meantime, would that be possible or is it not worth doing?

grumiofoundation

1) Yes (but different offer and not an ISA), withdrew and invested elsewhere when min. investment period expired. 

2) Not if you open an ISA (offer is not contingent on this so just open an general investment account). If you do open an ISA you would need to transfer it in full to another provider to contribute to another provider this tax year. 

3) There are 5 risk levels 1. Cautious, 2. Tentative, 3. Confident, 4. Ambitious, 5. Adventurous. 
Also option of ethical or original
From a brief look range from:
Cautious - 13% equities
Adventurous - 95% equites

Basically, I was looking at this as a way of making 10% on £400 and then look into using a more cost effective and potentially more hands on S&S ISA in the meantime, would that be possible or is it not worth doing?

Then open as a GIA. 

Whether it is worth doing depends on how much you value your time I guess?

Goes without saying don't invest in anything you aren't happy to invest in - in reality wealthily portfolio will not differ dramatically from various other multi-assest funds. 

MoneyMan01

Good point - I didn't actually notice General Investment Account at first, but definitely worth going that route as I am looking at potentially opening a S&S ISA, I just don't know enough about it to be able to put any money in yet.

I'm in two minds about whether signing up to something like this that takes care of everything or whether I want a higher return and have a more hands on approach. Pretty daunting though as I have no idea what to invest in.

Regarding the equities % you mention, what specifically are equities and given it is only £400, I am debating to go with level 4 or 5 just as an experiment really, given the £40 cashback is added anyway.

But before I do so, I want to understand what the equities stat you mention means?

milton1970

I put £400 into GIA under the offer .. on the basis that the £40 gives a 6 month buffer on any risk .. if investment drops below £360 I will consider withdrawal options then ... went for max risk

Only real opportunity lost is 0.6%pa interest so worth a punt IMHO

Simple to set up but getting £ into account is a bit confusing .. 

Been in 2 weeks .. up 2% already .. I’M RICH !

Albermarle

Regarding the equities % you mention, what specifically are equities 

Sorry to be blunt but if you are thinking about investing but you do not know what equities are , then you had better take a step back and do some reading first .

It is a bit like saying you want to play soccer, but what's a football .

Investing for beginners: how to get started - MSE (moneysavingexpert.com)

grumiofoundation

milton1970 said:

I put £400 into GIA under the offer .. on the basis that the £40 gives a 6 month buffer on any risk .. if investment drops below £360 I will consider withdrawal options then ... went for max risk

Only real opportunity lost is 0.6%pa interest so worth a punt IMHO

Simple to set up but getting £ into account is a bit confusing .. 

Been in 2 weeks .. up 2% already .. I’M RICH !

Don't really understand what you mean by "£40 gives a 6 month buffer on any risk ".

Are you aware that the "level 5 plan" could drop by much more than £40 before the cashback is paid? What will you do if this drops by 20%, 30%, 40%?

If it hits your risk tolerance level of £360 be aware if you chose to sell at this point by the time wealthify has sold these investments (its not instant at all) you may get back less than £360.

grumiofoundation

Would recommend doing as much research as possible, starting with the very basics (I included some links below - and if you read the replies by more far knowledgeable and experienced people than me other threads on this forum posted by people starting out investing will also be useful to you, and will be other links posters have included to look at).

In your post there are a number of red flags being not so much waved as manically thrown around. 

Regarding the equities % you mention, what specifically are equities and given it is only £400, I am debating to go with level 4 or 5 just as an experiment really, given the £40 cashback is added anyway.

But before I do so, I want to understand what the equities stat you mention means?

Equities <-> shares.

As opposed to other assest classes that wealthify may hold e.g. bonds (of various types), property funds, gold, cash

Generally over the long term equities will outperform bonds but will be more volatile (go up and down more). 

Level 4/5 could drop by far more than £40.
As with the poster above - if this happens what will you do?

As long as you stay invested (whether with wealthily or by selling and investing the same amount elsewhere) you would expect your investment to recover eventually (could be 6 months could be a few years). 

I suppose an alternative way to look at it is if you do panic and crystallise a loss at least you only did it on £400 and you know then not to invest above your risk tolerance, could be a lesson that saves you more money ?

I'm in two minds about whether signing up to something like this that takes care of everything or whether I want a higher return and have a more hands on approach. Pretty daunting though as I have no idea what to invest in.

Why do you think a hands on approach will give a higher return ?

A lot of actively managed funds underperform versus passive index trackers. Do you think you will do better than someone paid do invest even though you "have no idea what to invest in"?

What you mean by 'hands-on' could vary:

- You pick a multi-assest fund (see link below) and leave this rather than going with wealthily?

- Do you mean you will construct your own portfolio with various different geographical/sector weightings? 

- Will you buy individual shares?

- Will you tinker with the funds you buy, selling when you think it's overvalued and buying when its undervalued?


Below is a link to a comparison of various multi-asset funds (nearly a year old now) which would often be seen as a natural starting point for an inexperienced investor. In reality there is not a huge difference between various multi assest funds and there are no 'right' or wrong' ones.
As I said above over a year or so wealthify portfolio with ~60% equities will not dramatically outperform/underperform other multi-assest funds with ~60% equity. (over longer time period higher fees charged by wealthify will drag - but cashback will more than offset that initially). 

l also included a few more links that I you might find useful. 

https://monevator.com/passive-fund-of-funds-the-rivals/

https://www.moneysavingexpert.com/savings/investment-beginners/
https://www.vanguardinvestor.co.uk/articles/latest-thoughts/investing-success/why-it-is-so-important-to-diversify
https://www.nutmeg.com/nutmegonomics/increasing-your-chances-of-positive-portfolio-returns-the-facts-about-long-term-investing/
https://www.morningstar.co.uk/uk/news/207472/what-is-active-and-passive-investing.aspx

Link from wealthify where you can download each plan's factsheet.  
https://www.wealthify.com/why-invest/how-we-invest

milton1970

@grumiofoundation tbh it’s a punt that if I lose less than £40 on the investment I still gain overall by the bonus .. 

I would recommend that you don’t sweat the small stuff - if you are looking for a long term tax efficient investment vehicle then Wealthify isn’t it IMHO .. there are better options 

if looking for a bit of upside opportunity for little risk then it’s worth a punt 

If returns are much higher than I expect (I expect < 5% pa) then I may keep - otherwise it will be back in savings after 7 months

DireEmblem

milton1970 said:

I put £400 into GIA under the offer .. on the basis that the £40 gives a 6 month buffer on any risk .. if investment drops below £360 I will consider withdrawal options then ... went for max risk

Only real opportunity lost is 0.6%pa interest so worth a punt IMHO

Simple to set up but getting £ into account is a bit confusing .. 

Been in 2 weeks .. up 2% already .. I’M RICH !

Investing should be considered long term, and the £40 offer is effectively a 10% head start.  I would check the T&C as currently you "Get £40 cashback if you invest £400 for six months".

If you withdraw your funds within the 6 months, because they dropped lower than £360, not only do you realise a loss of £40, but you lose the £40 cash back.

milton1970

Thanks for the tip @DireEmblem ... understand the t&cs .. not in this for long term & would suggest that Wealthify is not suitable for long term investment 

IT IS A £400 PUNT WITH £40 HEADSTART

Jeez .. 

DireEmblem

The way it read at least to me Milton, suggested you could redeem prior to completing the six months needed to claim the £40 if your investment dropped below £360.

Glad you understand