5 Popular Robo Advisors Among UK Investors
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Based in the UK and looking to invest in the financial markets – but have little to no experience of how to trade? If so, you might onsider robo advisor platform.
This will allow you to invest in a more passive nature – with the robo advisor in question building a balanced portfolio on your behalf – based on your risk profile.
In this comparison guide, we review the popular Robo Advisors available in the UK.
4 Popular UK Robo Advisors
Here’s a quick overview of our five UK robo advisors.
UK Robo Advisors Reviewed
With more and more ‘Average Joe’ investors entering the online trading scene for the very first time, platforms are now offering financial products and services that are tailored to newbies. At the forefront of this are robo advisors – which allow you to passively invest in the stock and market and bond market at the click of a button.
With so many providers now active in this space, we have narrowed our list of UK robo advisors that are popular among UK investors – which you will find below.
1. Nutmeg
If you are looking for a UK robo advisor platform in its truest form, it might be worth checking out Nutmeg. The platform offers a range of robo advisor-driven portfolios - all of which focus on ETFs. The ETFs on offer will track a vairety of stock and bond marketplaces - both in the UK and abroad.
All you need to do to get started is answer some questions about your financial goals and how much risk you feel comfortable taking. Then, the Nutmeg robo advisor will suggest a suitable portfolio as per your requirements. In terms of pricing, Nutmeg charges 0.75% per year - which is calculated again by the amount you have invested at the platform.
- The only way to reduce this commission-rate is to invest over £100,000 - which brings it down to 0.35%.
Nevertheless, Nutmeg is perfect for newbies as the platform is really simple to use. In fact, you don't need to have a single ounce of knowledge in the investment scene, as the robo advisor does everything for you.
With that said, we should note that the main drawback with Nutmeg is that you need to invest at least £500 and commit to a monthly direct debit payment of £100. The only way around this is to inject a lump sum of £5,000 or more, which is going to be beyond the capabilities of many first-time investors.
2. MoneyFarm
If you're looking for a simple way to diversify your investments in a really simple way, it might be worth exploring MoneyFarm. This advisor has been in the marketplace since 2011. Not only does it now managed over £1 billion in client money, but it is fully licensed by the FCA.
In terms of what financial services are on offer, MoneyFarm offers 7 diversification portfolios. As always, the specific portfolio that you are assigned is based on your risk appetite. For example, if you are looking to chase higher financial returns, there are portfolios that focus on the emerging markets.
At the other end of the scale, risk-averse investors might prefer MoneyFarm portfolios that are packed with high-grade bonds and blue-chip stock ETFs.
- When it comes to fees, you will pay 0.75% per year - much like you would at Nutmeg.
- If, however, you are able to deposit at least £10,000 this annual fee goes down to 0.60%.
- The minimum investment amount is £1,500.
- But, you will also need to commit to a monthly direct debit if the initial investment is less than £5,000.
Taking this into account, MoneyFarm is likely more suitable for those of you that wish to commit to a long-term investment plan.
3. Wealthify
While the likes of Nutmeg and MoneyFarm are popular robo advisors in the UK for larger investment amounts, such a high minimum won't be suitable for everyone. As such, if you're interested in robo advisors but want to start off small, it might be worth considering Wealthify.
This is because Wealthify does not have a minimum investment policy in place. On the contrary, you can invest as little or as much as your budget permits. Once you go through the motions of opening an account and making a deposit, you will have 5 Wealthify portfolios to choose from.
Much like the other UK robo advisors we have discussed today, the portfolio that you choose is based on your financial goals and risk tolerance.
- If you want to take a low risk approach, the 'Cautious' portfolio at Wealthify will simply look to beat the rate of UK inflation.
- But, if you're looking to target more generous returns, then you'll need to take on a bit more risk.
- All of the Wealthify portfolios focus on investment funds and ETFs - meaning that you will be obtaining a highly diverse basket of assets.
When it comes to fees, Wealthify charges 0.60% per year. Additionally, the platform charges 'investment costs', which averages 0.22% annually. This does make Wealtify a rather pricey option. Nevertheless, the provider holds that all-important FCA license and your funds are covered by the FSCS.
4. MoneyBox
If you're looking for robo advisors in the UK for mobile investments - MoneyBox is a popular option. This is because the provider allows you to set up and monitor your robo advisor account via an Android or iOS application.
What really really like about the provider is that you only need to meet a £1 minimum deposit - making it ideal for those on a small investment budget. In terms of what investment products are available, MoneyBox is a bit thin on the ground with just 3 portfolios.
This covers an investment approach that is considered 'Cautious', 'Balanced' and 'Adventurous'. All 3 portfolios at MoneyBox focus on ETFs - such as those backed by iShares and Fidelity. When it comes to fees, there are three individual costs that you need to consider.
- The annual platform fee at MoneyBox amounts to 0.45%
- You will also need to pay the respective fee charged by the fund providers, which averages between 0.12% and 0.30%
- There is also a £1 monthly fee that is charged to keep your account open.
An additional MoneyBox feature that we like is that you can round your debit card purchases up to the nearest pound. For example, if your shopping bill comes to £35.10, the MoneyBox app will take £36 from your balance. The additional £0.90 will then be placed into a savings account.
What is a UK Robo Advisor?
Not to be confused by a trading robot, robo advisors allow you to invest in the financial markets in a simple, burden-free, and passive manner. The main concept with robo advisors is that the platform in question will manage your investments for you.
All you need to do is go through the initial setup process – which usually requires you to answer some questions about your financial goals. In particular, this centers on how much risk you feel comfortable taking on your long-term investment journey.
Once you have completed the questionnaire, UK robo advisors will then build you a ready-made portfolio. In most cases, the robo advisor platform will focus exclusively on ETFs and investment funds. These financial products typically have dozens, if not hundreds of assets in their portfolio – which means you can easily diversify.
Most robo advisor portfolios will assign you with multiple ETFs and investment funds, so you are able to invest in a risk-averse and balanced manner. And of course, there is no requirement for you to manually add or remove assets to your portfolio. This is because the robo advisors in the UK will automatically rebalance your investments.
To recap, the main attraction of UK robo advisors are as follows:
- Robo advisors are backed by algorithms that will automatically rebalance your portfolio
- The robo advisor platform cannot give you financial advice, but is more aligned with wealth management
- Your investment portfolio will also be monitored by experienced wealth managers and in-house analysts
- Asset allocation usually focuses on ETFs to ensure you are well diversified
- Some robo advisor investment management portfolios are stocks and shares ISA eligible
Why Use a Robo Advisor UK?
While some UK investors like the ‘thrill’ of picking and choosing stocks on a do-it-yourself basis, this can be an intimidating process for newbies. As such, many will subsequently turn to UK robo advisor platforms in the market.
If you’re still not sure if a robo advice platform is right for you and your financial goals, check out some of the reasons why so many are turning to this innovative investment vehicle.
Automated Trading
It goes without saying that the main roadblock facing inexperienced investors is a lack of financial knowledge. After all, in order to make financial returns from the investment scene, you need to take on an element of risk.
The good news is that the robo advisors in the UK take full control over your investment journey.
This means that you will not be required to choose which stocks or ETFs should be added to your portfolio.
Potential Passive Source of Income
When you take a do-it-yourself approach to investments, you need to dedicate a reasonable amount of time to research. This is because you are in full control of which assets you buy and sell – so you need to be kept abreast of what is happening in the financial markets.
Even long-term ‘buy and hold’ investors need to keep tabs on key market developments, as just one negative news story could have a major impact on the value of the stock in question.
Crucially, the need to actively perform research is completely allocated when you invest in robo advisors – potentially paving the way for a passive source of income, although bear in mind all investing comes with risks and there’s no guarantee you’l make money with a robo advisor. In fact, once you make the initial investment into your chosen portfolio, there is nothing more for you to do until you decide to cash out.
Robo Advisors Regularly Rebalance Your Portfolio
Leading on from the section above on passive investing, it is also important to note that UK robo advisors will automatically rebalance your portfolio.
In simple terms, this means that the provider will add or remove financial instruments on a regular basis – subsequently ensuring that the portfolio still mirrors your stated financial goals and appetite for risk.
Once again, this means that you can avoid the need to spend time worrying about the health of the wider economy, as the robo advisor minors this on your behalf.
Robo Advisor Fees Comparison
All robo advisor investment platforms are in the business of making money. As such, there are several fees that you should be aware of before taking the plunge.
This includes:
- Platform Fee: This is the fee that you pay to the provider for utilizing its robo advisor services. This is an annual percentage fee that is calculated against your total investment balance.
- Fund Fee: The vast majority of UK robo advisors platforms will put your money into ETFs (exchange-traded funds) and investment funds. In turn, the respective provider will charge an annual expense ratio, which is subsequently passed on to you.
- Transaction Fees: UK robo advisors allow you to deposit and withdraw funds free of charge. However, we have come across several providers that charge transaction fees, so be sure to check this out.
If one of the main priorities when choosing a robo advisor is fees and commissions, check out the comparison table below. This outlines the main fees that you will pay with the five robo advisor providers that we discussed earlier in this guide.
| Robo Advisor UK | Platform Fee From | Fund Fee | Minimum Deposit |
| Nutmeg | 0.75% | Built into platform fee | £5,000 lump sum or £500 + direct debit |
| MoneyFarm | 0.75% | Built into platform fee | £5,000 lump sum or £1,500 + direct debit |
| Wealthify | 0.60% | 0.22% (average) | £0 |
| Moneybox | 0.45% + £1 per month | 0.12% – 0.30% | £1 |
Fees can change at robo advisor platforms at a moment’s notice, so be sure to check this yourself before opening an account.
How to Choose the Best Robo Advisor for You
This guide has reviewed five investment robo advisors UK currently in the market. However, you might come across a platform that you like the look of that we haven’t covered on this page. If this is the case, you are advised to perform lots of research on the provider in question before taking the plunge.
To help you along the way, below you will find the most important questions that you need to ask of a UK robo advisor platform.
Minimum Investment
The first metric that you should explore is that of the minimum investment amount. After all, there is no point in checking things like fees and portfolio diversity if the account minimum is too high for your investment budget.
FCA Regulation
It is also important that your chosen UK robo advisor is regulated by the FCA. Your funds should also be covered by the FSCS – which protects your capital up to the first £85,000 should the platform go out of business.
Fees
Once again, all UK robo advisors charge a fee of some sort. This can vary widely so do check this out before signing up. For example, Nutmeg and MoneyFarm both charge 0.75% per year.
Payments
Some providers only allow you to deposit and withdraw funds with a UK bank transfer. This means that you might need to wait a few days for the funds to arrive. With that said, robo advisors UK will also support debit/credit cards and e-wallets – which are usually processed instantly.
User Experience
If you are looking to sign up with a robo advisor because you have little to no experience of the online investment scene, then you need to make sure that the provider offers a seamless user experience. This should include the registration and deposit process, and of course, getting your robo advisor portfolio set up.
Past Performance
Although past performance is never a sure-fire indicator of future success, this is still a crucial metric to explore when choosing a robo advisor. This is because the UK robo advisors will clearly display the average returns that their portfolios have made since their inception.
The Verdict
In summary,UK robo advisors offer many benefits that you won’t find at a traditional DIY brokerage site. At the forefront of this is being able to invest passively, and there is no requirement for you to pick and choose which assets to add to your portfolio. On the country, this role is reserved for your chosen robo advisor provider.
If you’re considering using a robo advisor, remember to carefully research the platform and remember there’s no guarantee you’ll make money.
FAQs
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Kane Pepi
