Wealthify Robo Investment

MoneyMan01

Albermarle said:

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)

I am openly honest about my lack of knowledge on investing and that's why before I put any serious money into a S&S ISA I want to do a lot of reading to understand it more. I understand the concept and have previously read through the link you attached. I hadn't seen equities listed on there, but as I understand it, equites are basically shares?

What I am trying to distinguish is what is the best option to get as much return.

- Are robo investment options cheaper in terms of fee's across the year, with a lower return (based on previous average performance),

- Or is it a case of robo investment options are more expensive in terms of fee's across the year, lower return

- Or robo investment fee's cheaper with higher return

- Or robo higher fee's higher return.

Basically, in short, what is the best option?

Is the best option a S&S ISA where I put my risk level and it's looked after, providing higher average returns (based on previous performance),

Or is the best option a S&S ISA and I learn up and know what products to specifically add to the investment portfolio within the ISA? Does that work out cheaper and higher potential returns? That's what I am trying to understand right now.

grumiofoundation said:

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).

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

Thank you for all of the information and the links, really helpful. I have laid out some thoughts above which I am looking for clarification on. Tried to make it as clear as possible (though it is late!) Hope it makes sense.

DireEmblem

"I am openly honest about my lack of knowledge on investing"

This is how Robo Investments make their money and what they are good at helping people with.

There are several questions you need to ask yourself, and Robo Investments tend to do this on their sign up, to tailor an investment profile to best meet your needs.  The two key questions that may help us direct an answer are:

1) How long are you willing to invest for.  If in the short term < 5 years, most people would probably recommend cash.
2) How much risk are you willing to accept?  Would you be willing to accept losses of 10/20/30% in the short term, for the potential to make greater longer term gains?

It is also worth looking at their fees:

https://www.wealthify.com/why-invest/fees

If you sign up and answer their questions, they will manage your investments for you based on your risk profile.  You are essentially paying them 0.6% to do that, and they quote an average fee of about 0.76% overall.

For people looking to minimise fees, then the below fund or equivalents are popular to invest and forget as long term holdings given they are fairly diverse in nature:

https://www.morningstar.co.uk/uk/etf/snapshot/snapshot.aspx?id=0P0000WAHE

This asset invests in global equities, almost 3900 in total I believe.  It has an annual fee of 0.22%, but you will usually have to pay a platform service fee as well.  Popular providers are Vanguard directly for 0.15%, or Fidelity/Hargreaves that charge slightly higher and others less.  In this case you are talking 0.37% if you used Vanguard Directly.

You will see from the above Morningstar link, the general trend over time for a well diversified global equity fund, is up.  That being said, over the years it jumps up and down, sometimes quite significantly.  This is where time in market is generally recommended as key for investing(and patience).  The shorter you are willing to leave funds in the market, the more you should look towards more stable instruments - cash or bonds.

The Wealthify option, is not bad as a start for someone new given the bonus offer.  You could use it as a platform to grow from, and they also provide some informative newsletters to help educate.  Before their fees, they are essentially giving you a 10% head start to invest.

Once you have learnt a bit more, you could then perhaps look to increase your savings through other offers.  Nutmeg is much the same as Wealthify, and usually have similar deals on Quidco.  I received £100 the other year for Depositing £500, and then £100 a month for a year.  Then if you are comfortable picking your own funds to invest in, as you see from the Vanguard example above, you could lower fees from 0.76% to 0.37%.

The below article is quite good in my opinion in covering Wealthify:

https://moneytothemasses.com/saving-for-your-future/investing/wealthify-review-is-it-the-right-investment-choice-for-you

MoneyMan01

Thank you very much, I found the above extremely helpful.

I now understand things better and it appears as though Robo investing will charge you higher fee's as they are managing everything based on your risk appetite you tell them.

Whereas I can lower those fee's by using a platform like Vanguard and invest in say the FTSE Vanguard All World as you linked, or equivalent.

I guess then from there, once learning more and feeling more confident, could then tailor my portfolio to specific invesments, whilst still diversifying, in an attempt to boost average % returns.

Other option would be to consider other robo investments in the meantime, that offer lower fee's than Wealthify, did you say you used Nutmeg? Was they good?

I could also look out for other Cashback offers to get in with a bit of a buffer.

Are there cashback offers for Stocks and Shares ISA's? If so, is there a central web page that has all the latest offers for Stocks and Shares ISA's?

grumiofoundation

TheDarkKnight93 said:

Thank you very much, I found the above extremely helpful.

I now understand things better and it appears as though Robo investing will charge you higher fee's as they are managing everything based on your risk appetite you tell them.

Whereas I can lower those fee's by using a platform like Vanguard and invest in say the FTSE Vanguard All World as you linked, or equivalent.

Note than FTSE All-cap is 100% equities whereas wealthify offerings (any other multi-assest funds) contain varying proportions of bonds etc that aim to reduce volatility/risk.

So you shouldn't, for example, compare the returns of FTSE All-cap versus a multi-asset fund with 60% shares. 

I guess then from there, once learning more and feeling more confident, could then tailor my portfolio to specific invesments, whilst still diversifying, in an attempt to boost average % returns.

Don't assume tailoring investments will boost returns. 
(In reality chances are returns will decrease the more you tinker). 

Other option would be to consider other robo investments in the meantime, that offer lower fee's than Wealthify, did you say you used Nutmeg? Was they good?

I have also used nutmeg (again for cashback) and didn't really find it better or worse than wealthily - will also be moving away when minimum period is up. 

I could also look out for other Cashback offers to get in with a bit of a buffer.

Are there cashback offers for Stocks and Shares ISA's? If so, is there a central web page that has all the latest offers for Stocks and Shares ISA's?

Topcashback and quidco have offers - however don't be seduced by high cashback alone (e.g. friendly societies offer high cashback but have higher fees, exit charges, lower returns etc )


Some providers also offer refer a friend offers - can check referral board on this site. 

MoneyMan01

Useful information, thanks again.

Do you happen to know whether there are any exit chargers for Wealthify or Nutmeg?

Noted about the cashback and referral's, I will bear that in mind and check out the info before going ahead.

Did you have any S&S ISA recommendations, or in fact a link to compare the "best" ones, fee's etc?

Same for the product that you can "invest and forget" on that platform, noted the FTSE All Cap is 100% shares so are there others that do what an equivalent of a robo investment that is selectable to invest in on a platform via S&S ISA and is there a link for those as well?

MoneyMan01

So I opened this in April 2021. Just checked but I can’t see that the £40 bonus was paid at all?

I deposited £400 when I opened it. 

Has anyone else received the £40 bonus and can you tell me where I need to go in the app to view if the bonus has been paid to me?

Thanks 

Daliah

I opened mine in March 17 and got the £40 on Sept 30. I haven't kept the offer details but I know it comes and goes, a bit like the DFS Sale. If you are certain that the offer was active when you opened the account through the MSE link and you made your deposit within the offer period, just contact Wealthify and ask.

Nurse2047

Investengine I have a GIA with to get their offer- invest £100 and I received the £50 welcome bonus (check if this still apply) and the £25 referral bonus. 

They are relatively new though, however one of the cheapest in regards to fees. In my GIA it’s a robo invest option and all good so far. 

DireEmblem

Wealthify's offer expired at the end of 2021 I think unless they extended.  I quite like their robo invest side, so sticking with it.  The emails they send you each time they trade are pretty stupid though.

Daliah

DireEmblem said:

Wealthify's offer expired at the end of 2021 I think unless they extended. 

There's an active offer atm https://www.wealthify.com/moneysavingexpert/money-saving-expert-december-2021-offer?ref=msecb-mse40q122&utm_source=money_saving_expert_cashback&utm_medium=affiliate&utm_campaign=mse-offer-dec-2021