Wealthify etc verdict
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southantrim3
Posts: 835 Forumite
Apologies if this has been asked before.
I'm new to investing and thinking of dipping my toes in to a s&s ISA at around £100 per month.
Have thought of either going down the wealthify/nutmeg etc route or vanguard etc...
What route should I choose and why?
All help/advice greatly appreciated.
Thanks
I'm new to investing and thinking of dipping my toes in to a s&s ISA at around £100 per month.
Have thought of either going down the wealthify/nutmeg etc route or vanguard etc...
What route should I choose and why?
All help/advice greatly appreciated.
Thanks
0
Comments
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In general, MSE's info on investing is fairly superficial but https://www.moneysavingexpert.com/savings/stocks-shares-isas/ does offer a comparison between these investment styles.
Essentially you're comparing between something simple but relatively costly and limited versus a wider choice that should be lower cost but needs a bit more research/knowledge.1 -
Choose your own funds because, and no offence meant, this is a relatively low amount of money so it will be good to learn as you go without risking your life savings rather than just effectively wash your hands of the whole thing and give it over to someone else leaving you none the wiser some years down the track and possibly with a substantial amount invested and substantial fees to pay.1
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Robo-guidence providers are there to offer very simple solutions at relatively low cost.
They wont be the cheapest option. They wont be the most expensive. They wont be the "best" option. They wont be the worst. You wouldnt want to use them for large values but for very small amounts, they are ideal.
Most robo-advice services currently out there are not expected to last for the long term. Most are loss making. Some of the highest profile are massively loss making and have to keep going back to investors to get money. Failures are expected.
Wealthy is not that cheap. For example, its charge is 0.7% and funds 0.22%. So, that is 0.92% p.a. For what is effectively an investment in underlying passive funds.
If I compare that to full advice using a mix of passive and active, you are looking at around 1.2% p.a. If you look at a DIY platform using a low-cost multi-asset fund withh underlying passives then you are looking at around 0.50%. So, its not far off full advice costs whilst being some way off the cheapest similar platform based equivalent. Advisers are not intersted in the small stuff. But if you can put in the effort to learn just a little bit more, then a DIY platform using a multi-asset fund with underlying passives would be better value.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.1 -
I've had accounts with Moneyfarm, Evestor and Nutmeg and overall prefer the ease, performance and information provided by Nutmeg, even though its fees aren't the lowest. As mentioned by others it should be cheaper picking your own passive funds. It's something that I'd like to start soon myself but at the moment I'm happy with the convenience of a robo-investor.
https://www.moneyobserver.com/news/nutmeg-named-top-performing-robo-portfolio-ftse-100-beats-it
Here's a useful resource for comparing the cost of various DIY platforms based on your likely investment preferences. All sorts of variables to consider!
http://comparefundplatforms.com0 -
Thank you all for your replies so far, greatly appreciated.
I’m on a steep learning curve here hence not wanting to throw too much cash at it yet incase I sting myself...Robo-guidence providers are there to offer very simple solutions at relatively low cost.
They wont be the cheapest option. They wont be the most expensive. They wont be the "best" option. They wont be the worst. You wouldnt want to use them for large values but for very small amounts, they are ideal.
Most robo-advice services currently out there are not expected to last for the long term. Most are loss making. Some of the highest profile are massively loss making and have to keep going back to investors to get money. Failures are expected.
Wealthy is not that cheap. For example, its charge is 0.7% and funds 0.22%. So, that is 0.92% p.a. For what is effectively an investment in underlying passive funds.
If I compare that to full advice using a mix of passive and active, you are looking at around 1.2% p.a. If you look at a DIY platform using a low-cost multi-asset fund withh underlying passives then you are looking at around 0.50%. So, its not far off full advice costs whilst being some way off the cheapest similar platform based equivalent. Advisers are not intersted in the small stuff. But if you can put in the effort to learn just a little bit more, then a DIY platform using a multi-asset fund with underlying passives would be better value.
What advice can you give me re Vanguard then, are they worth it?
They claim their fees are quite low but they seem to have a restricted list of funds relative to others...0 -
As suggested in dunstonh's signature, an IFA can't give 'advice' on a public forum, in the regulated meaningful sense of financial advice, but all of us can offer opinions and guidance....southantrim3 wrote: »What advice can you give me re Vanguard then, are they worth it?
They claim their fees are quite low but they seem to have a restricted list of funds relative to others...
Investing generally involves at least two separate entities - fund managers who construct and maintain collective investments, and then platforms, on which investors can hold such products. Vanguard is different from most in that it offers a one-stop shop approach of a platform on which its own products can be held (hence the restricted range of funds).
If you choose to invest in Vanguard's products (as many do, their global multi-asset LifeStrategy range is very popular, although it's more UK-biased than most) then doing so on the Vanguard Investor platform is cheap. Other low-cost global multi-asset offerings are available though (see below), but these would need to be held on a non-Vanguard platform.
If you're leaning more towards the DIY route then worth researching at places such as:
https://www.moneyadviceservice.org.uk/en/articles/investing-beginners-guide
https://www.hl.co.uk/beginners-guides/investing
http://www.monevator.com
http://kroijer.com/
http://diyinvestoruk.blogspot.com/
as well as bearing in mind a number of key points of principle:- Only consider investing once you have adequate accessible cash reserves.
- Only invest if you're happy to commit for at least 5-7 years and preferably 10-15 or more.
- Diversify - ignore individual shares, etc, and concentrate on collective investments that spread your eggs over many baskets. Global multi-asset funds are a good place to start, available from the likes of HSBC Global Strategy, Vanguard LifeStrategy, Blackrock Consensus and L&G Multi-Index.
- Choose what you want to invest in before considering which platform to hold it/them on.
- Keep an eye on ongoing costs for funds and platforms - they shouldn't be the primary consideration but can make a noticeable difference over the long term.
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Thanks again,
My initial thoughts had been 15 years. Funds I had thought of would have been a combination of UK FTSE tracker, US S&P tracker, cash and gold.
S&S ISA is what I’d like to invest in given rates of interest everywhere else are pretty grim, however, I’m fully aware that I can just as easily make a loss this way. And yes, I’d like to keep fees to a minimum.
The £100 per month would slowly increase to around £300 per month eventually.0 -
southantrim3 wrote: »Vanguard then, are they worth it?
Having tried a few of the robos (for the various signup cashback incentives) then I agree Nutmeg is the best, Moola + Moneyfarm are OK and Wealthify was the most disappointing. When you look at the underlying asset allocation there is nothing special about any of them that justifies the higher fees.
Vanguard Investor is a significantly cheaper S&S ISA platform with similar fund management costs. Have a look at their LifeStrategy range and for your timescales consider something like VLS80 which is globally diversified with a mix of share equities and fixed interest bonds. In a really bad stock market crash you could see losses of around 40% and would need to hang on for the eventual recovery.
Also consider if additional Pension or S&S Lifetime ISA (if under 40) contributions might be a better option for your circumstances.
Alex0 -
Having tried a few of the robos (for the various signup cashback incentives) then I agree Nutmeg is the best, Moola + Moneyfarm are OK and Wealthify was the most disappointing.
Alex
As a matter of interest, what was disappointing about Wealthify? Is it the performance, customer service, ease of use ...?
I took advantage of the MSE bonus thing a few weeks ago, so I'm expecting a bonus of £40 for my £400 investment, as well as any other growth.0 -
As a matter of interest, what was disappointing about Wealthify? Is it the performance, customer service, ease of use ...?
I took advantage of the MSE bonus thing a few weeks ago, so I'm expecting a bonus of £40 for my £400 investment, as well as any other growth.
Wealthify are just another bland and uninspiring 'me too' investment product riding the fintech wave. The founders probably did well for themselves cashing out to Aviva who already had an equivalent investment capability anyway so didn't need it.
I saw a few errors on sign-up, the initial £25 payment was collected, the first £25 bonus was added, then the following payments failed to collect. I noticed a few months later and could have contacted them to resolve but couldn't be bothered so just closed the account withdrawing £50.
Alex0
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