Wealthify* is a UK based independent robo-advisor which invests in ETFs to keep clients' investment management costs to a minimum. Similar to other robo-advisers (such as Wealthsimple, Nutmeg and Moneyfarm). Wealthify uses an automated process to create portfolios that align with a client's appetite for risk. In October 2017 Aviva, one of the largest insurance companies in the UK, acquired a majority stake in Wealthify and on 5th June 2020 Wealthify became a wholly-owned subsidiary of the Aviva group, however it will continue to be individually run. It is yet another example of an established financial institution acknowledging that robo-advice firms like Wealthify represent the future of investing in the UK. The biggest challenges facing robo-advice firms are gaining funding (from financial investors) and client acquisition. As they charge their clients such low fees their profit margins are very slim so they need to acquire large numbers of customers in order to become profitable. The arrival of Aviva should soothe that headache for Wealthify as it can now be promoted to Aviva's extensive client database.
How does Wealthify work?
Wealthify has a team of investment experts who have developed an investment process that uses algorithms to select the best funds and create an investment plan that suits the client's attitude to risk. The Wealthify investment team then continuously monitor and adjust a client's portfolio to maintain their investments in line with their attitude to risk. Clients can keep track of their investments online on PC, tablet or phone via the Wealthify app and can add or withdraw money with just a few clicks. So far so good.
Wealthify application process
An investment can be made with a minimum of £1 (except Wealthify's SIPP which requires a minimum investment of £50) and additional investments or withdrawals can be made at any time. This minimum investment level puts Wealthify on a par with the likes of Wealthsimple* who also allow you to open an account with just £1. By contrast, Nutmeg requires a minimum investment contribution of £500 and Moneyfarm has recently increased its minimum investment to £5,000. Scalable Capital, on the other hand, requires a minimum contribution of £10,000.
Customers are accepted over the age of 18
Low minimum investment of £1 (£50 for Wealthify's SIPP)
No charges for opening or closing accounts so you could move to another service if you become unhappy in the future.
When you open an account you first have to choose between a Wealthify Stocks and Shares investment ISA, general investment account, a Wealthify Junior Stocks and Shares ISA or a Weathify Pension. You will be given the option of whether you want to invest ethically in any of the four options by selecting 'Ethical investments'.
If you have not used your annual ISA allowance then it would be preferable to invest via one of Wealthify ISAs as any income or capital gains will be tax free. I chose a Stocks and Shares ISA.
Now usually with most robo-advisers they first require you to complete a risk profiling questionnaire of some kind before providing a sample portfolio. In this regard Wealthify is much slicker than many of its peers as you get straight into building an investment portfolio. Once you've chosen the plan type you want (i.e an ISA) you are presented with a 'Create Your Plan' page as shown below (click to enlarge the image). The user interface of this page is very good with the use of scroll-bars to set your investment amount, how long you want to invest for and the level of investment risk you are happy to take. You are then presented with a projected value for your investment by the end of your stated investment term, but of course this is not guaranteed.
You can then choose to see how your plan will be invested and you will be presented with a portfolio like the one below which shows you the types of assets Wealthify would invest in on your behalf (click to enlarge).
You can see from the screenshot that I went for a 'confident' investment style, or in other words Wealthify's medium risk portfolio. It is fairly cautious with around 56% of the assets in low-risk investments such as cash and bonds while 40.23% is invested in equities. In my review of Wealthify in 2018, the same portfolio had only 28.5% invested in equities and I commented then that I would have expected it to have closer to 50%, something that Wealthify has since gone on to change. This current asset mix is closer to that of other robo-advisers such as Moneyfarm and you can see my Moneyfarm review) here.
To produce your own Wealthify portfolio as I have it will only take a couple of minutes which is quicker than other robo-advice propositions. So I suggest that you take a few minutes to see the Wealthify* portfolio that would suit your attitude to risk. It's free to do so with no obligation on your part. Once you've done that you can also alter the portfolio risk level to see how it impacts the asset mix, which is a useful exercise. Once you have been presented with a portfolio you are then invited to begin setting up a plan, which in the first instance means going through a multiple-choice questionnaire to see if investing is suitable for you, as shown in the image below. The questions you are asked include:
- Whether you plan to withdraw at least half of the money within the next three years
- Whether you accept the possibility that the value of your money will go down
- Your understanding of what constitutes a high-risk investment
- How you would feel if your investments fell by 20% in a 12 month period
- Your current savings levels
- Your current amount of debt
Depending on your answers you can in fact be rejected by Wealthify on the basis that investing is not suitable for you, if for example you have no savings and high levels of debt. This is kudos to Wealthify as investing isn't for everyone and shows that they are living up to their moral and legislative obligations. Of course there is nothing to stop you changing your answers to ensure that you can still invest with Wealthify but that is true of any robo-advice service. Assuming that you pass through the screening process you can then fund your investment online.
What products does Wealthify offer?
As well as a general investment account, Wealthify offers a Stocks and Shares ISA* and a Junior Stocks and Shares ISA* which, along with the minimum investment of £1, makes an ideal starting point for new investors. Wealthify recently joined the likes of robo advisers Nutmeg, Moneyfarm and Wealthsimple in launching a Self Invested Personal Pension (SIPP). Those interested in Wealthify's pension will need to start with a minimum investment of £50.
Similar to the Wealthify Stocks and Shares ISA, Wealthify's pension* is relatively easy to set up. Once selected, you'll be presented with a set of questions and scroll bars and you'll need to choose your expected retirement age, initial and monthly investments and investment style. You'll then be presented with a projected value for your investment at retirement (which again is not guaranteed).
You can then choose to see how your pension will be invested including the types of assets, the regions as well as the actual funds that it will invest in.
Once happy, you'll be encouraged to open an account. You'll pay a flat fee of 0.60% irrespective of how much you invest and you'll pay average fund fees of around 0.22%. If Wealthify's pension* interests you then you may also wish to take a look at the pensions on offer from Nutmeg, Moneyfarm and Wealthsimple - just click on the links to find out more. It is worth noting that Wealthsimple will manage the first £10,000 of your investment for free for the first year.
What is Wealthify's investment strategy?
Wealthify invests mainly in passive investment funds such as Exchange Traded Funds (ETFs) and Mutual Funds. The mix of funds in a client portfolio will depend on their attitude to risk and is monitored constantly to ensure the mix of funds still reflects the client's investment goals and the portfolio they selected during the account opening process.
How does Wealthify manage its portfolios?
Wealthify manages portfolios with a mixture of automated and manual systems to create and monitor client's portfolios. Global markets are constantly monitored using computer-based algorithms which is a cost-effective strategy allowing clients to invest with lower fees. In addition to the automated process Wealthify experts use their knowledge and experience to make adjustments to client portfolios where appropriate. In this regard they are just like many of the other robo-advice services such as Nutmeg, Moneyfarm and Wealthsimple.
What are Wealthify's fees?
Wealthify* amended its annual fees in December 2019 and now charges a simple flat fee of 0.6%. The new fees mean that of all the robo-advisors, Wealthify offers the cheapest managed portfolio with £20,000 or less invested.
The chart below compares Wealthify fees vs Moneyfarm vs Nutmeg vs Wealthsimple fees
|Investment amount||Wealthify portfolio fee||Nutmeg managed portfolio fee||Moneyfarm portfolio fee||Wealthsimple|
|£0 - £10,000||0.60%||0.75%*||0.75%||0.70%**|
|£10,001 - £20,000||0.60%||0.75%||0.60%||0.70%|
|£20,001 - £50,000||0.60%||0.75%||0.60%||0.70%|
|£50,001 - £100,000||0.60%||0.75%||0.50%||0.70%|
|£100,001 - £500,000||0.60%||0.35%||0.35%||0.50%|
*Nutmeg will waive its management charges for the first 12 months. Check out our Nutmeg review to find out more.
** Wealthsimple will manage the first £10,000 free for a year. Check out our Wealthsimple review to find out more.
In my review back in 2018, I remarked that Wealthify was less competitive for investors with over £500k, but then they reduced their fees for those wishing to invest over £100k down to 0.40%. But Wealthify's move to simplify its fee structure (which is admirable in itself) now means that it is more expensive for investors with over £50,000 to invest than it was previously. As the table above shows, Wealthify is now very competitive for those with less than £100,000 to invest but not so for those with more than £100,000. In addition to the Wealthify fees stated above there is an average fund charge of 0.22% which is typical for a robo-advice firm. Those wishing to invest ethically will pay an average fund charge of around 0.66% which is actually a little expensive when compared to the likes of Nutmeg (0.31%) and Wealthsimple (0.27%).
Wealthify has a 'refer-a-friend' scheme that rewards customers with £50 for every friend they refer. This has replaced its 'Circles' loyalty scheme which was designed to reward those that refer family and friends in return for further discounted fees.
When a Wealthify account is opened a 'predicted value' figure is provided which indicates the potential value of a client's investment over a period selected by the client. This is not a guarantee and I'd argue that it is of limited use.
Wealthify have 5 investment plans (Cautious, Tentative, Confident, Ambitious & Adventurous) whose performance is monitored regularly against industry benchmarks.
Below we have summarised Wealthify's 2017, 2018 and 2019 performance data
2017 Wealthify performance
- Cautious - +2.21%
- Tentative - +3.30%
- Confident - +4.39%
- Ambitious - +6.16%
- Adventurous - +7.72%
2018 Wealthify Performance
- Cautious - -1.65%
- Tentative - -2.88%
- Confident - -4.43%
- Ambitious - -6.10%
- Adventurous - -7.62%
2019 Wealthify Performance
- Cautious - +6.43%
- Tentative - +9.37%
- Confident - +11.96%
- Ambitious - +14.75%
- Adventurous - +17.14%
But more importantly, how does the Wealthify performance compare to other robo-advice firms?
Wealthify vs MoneyFarm vs Nutmeg performance
Wealthify now provides performance data for 2019 (it doesn't have a performance history that goes much beyond 2018). The table below shows the Wealthify vs Wealthsimple VS Nutmeg performance for 2019. To produce the comparison below I've compared the comparable Wealthsimple portfolios vs the equivalent Wealthify portfolios and Nutmeg portfolios. Wealthsimple actually offers 3 portfolios versus Wealthify's 5 and Nutmeg's 10 managed portfolios
|Wealthify performance 2019||Wealthsimple performance 2019||Nutmeg performance 2019|
Based on the data above Wealthify performed well at higher risk levels during 2019 (this may not be surprising given my observation of Wealthify's generally more cautious portfolio allocation earlier). Given how impressed I was with Wealthsimple's overall performance (see my Wealthsimple review) Wealthify customers should be able to sleep easily, as long as they aren't invested in its cautious portfolios.
Markets have been particularly volatile in recent months and so we have been unable to gather up to date performance figures in order to provide meaningful comparison data. Over the coming weeks, we will continue to monitor the investment performance of Wealthify and in particular how it compares to Nutmeg, Moneyfarm and Wealthsimple. We will update this article as and when the most recent performance data is released.
What other services does Wealthify provide?
Wealthify is not regulated to provide financial advice to their clients but investments up to £85,000 are covered under the Financial Services Compensation Scheme (FSCS).
Wealthify customer reviews
Below is a sample of reviews published from existing Wealthify customers via Trustpilot:
'Always available for help by email/phone and that what counts and makes you feel confident in the business and ability to work for their clients' - Chris
'I'm generally happy with the service I've received, but I can't comment on the investment performance as I've only had my ISA for 6 months' - Mike
'Very happy with the service and the easy of keeping up to date with everything, would definitely recommend to any friends or family' - Jackie
'Excellent company and investment service that makes me comfortable parting with my money. Wealthify is the future with its roboinvesting platform' - Paul
'Great website. brilliant customer service-respond quickly to any concerns.
Fees are fair and transparent' - Pete
- Wealthify* provides a value for money, hassle-free passive method of investing in the stock market and is ideal for beginners given that you can start investing with as little as £1.
- Its charges are very competitive for both smaller but less so for larger investors (those with over £100k to invest) due to its flat fee structure. Wealthify offers the cheapest managed portfolio with £20,000 or less invested assuming you aren't using any of the promotional offers elsewhere.
- The performance data (especially for 2019) compares favourably with its peers for its higher risk portfolios, even against the likes of Wealthsimple which has performed very well since launch
- It's worth bearing in mind that there is no reason to not invest with more than one robo-adviser, to stop you having all your eggs in one basket (although you can only open one Stocks and Shares ISA each tax year).
- Wealthify or any other robo-advice service for that matter won't suit those wanting to be more involved in how and where their money is invested. If you want to take a more hands-on investment approach which empowers you to run your own money and make your own fund decisions then have a look at my 80-20 Investor service.
If a link has an * beside it this means that it is an affiliated link. If you go via the link Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. But as you can clearly see this has in no way influenced this independent and balanced review of the product. The following link can be used if you do not wish to help Money to the Masses or take advantage of any exclusive offers - Wealthify, Wealthsimple
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