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This Wealthify review shares information on investing and saving but does not provide personal advice. Please seek professional advice from a financial advisor if you are unsure which investments are right for you. Investments can go up as well as down in value, and you may lose your money.
I have been investing with Wealthify for over a year and can’t wait to share my Wealthify review with you. Admittedly, investing was not something I was keen on. Reading about investing felt like reading a foreign language, and where do you even start? Naturally, as humans, we are comfortable with what we know, which, for me, was putting my money in my savings account and hoping for the best.
Investing is not something we are taught at school, and unless we land ourselves a job in the finance industry, we have to make an effort to educate ourselves. With current saving account interest rates below inflation rates, the value of money you put away will be eroded over time. Saving is ideal for short-term goals, but investing can have a greater return when planning for the future.
Wealthify is a straightforward way to start investing, ideal for beginners and those who want to begin slow and steady. On their website, you will find articles easy to understand, cutting out all the financial jargon, compiling the benefits of investing and the importance of diversifying the way you save.
If you would like to boost your investment with Wealthify, check out my link to earn £25 after investing £500 for the initial three months.
Note: with any investment you make, you take the risk of losing the money you put in.
What is Wealthify?
Wealthify is a U.K. based investment company that uses robo-advisors to manage accounts. The system uses algorithms to invest in funds and create portfolios that match your investment style. Wealthify also employs an investment team who work in the background, monitoring and adjusting portfolios if needed.
Portfolios consist of a diverse range of investment types, areas and companies to reduce risk.
Wealthifys’ strategy mainly consists of investing in low-cost passive ETFs and mutual funds. These track the market index (e.g. FTSE 100 in the U.K.). It is a proven long-term investment strategy where robo-advisors and the investment team pick stocks they think will do best.
Different investment plans
Wealthify has a range of investment plans that you can choose from:
Stocks and Shares (investment) ISA
- Individual savings account
- U.K. residents can save/invest up to £20,000/year tax efficiently; you won’t have to pay Capital Gains Tax or Income Tax on your potential returns
- Can transfer an ISA over to Wealthify
- Able to withdraw and transfer money whenever you need to
- Invest in your children’s futures
- Save up to £9000/year per child tax-efficiently
- The money belongs to the child and can only be accessed once they reach 18
- Ethical investing available
General Investment Account
- Simplest way to invest
- Option if you’ve used up your annual ISA allowance
- Invest with as little or as much as you’d like
- Able to withdraw and transfer money whenever you need to
- Self Invested Personal Pension
- 25% tax relief top-up
- Can transfer other pensions across to Wealthify
- Supplement your workplace pension
- Ideal if self-employed, for instance, a limited company director, sole-trader, freelancer
- Mutual funds and ETFs from organisations with moral values
- Screening is accomplished to ensure ethical standards are maintained
- Bespoke optimisation tool used to review your plan
With only £1 you can start investing in any of these plans, apart from the pension plan that requires an initial investment of £50.
5 Wealthify investment styles
Each plan has a different risk level. Initially, when signing up to Wealthify, you will have to complete a questionnaire to check if investing is for you. It will then determine what risk level is suitable. It will reject you completely if you have debt or no savings as a moral and legislative obligation. Wealthify does not want to put you in a worse position than what you might already. Remember, you can lose money investing. For me, this is a 10/10 decent approach from Wealthify.
- Aim is to achieve above the U.K. inflation rate.
- Grow money slowly and steadily.
- 0-20% high-risk investments, for example, commodities and emerging markets
- 80-100% low-risk investments, for example, bonds and cash
- Could contain up to 25% in overseas investments.
- Generate good growth over a more extended period.
- For investors who prioritise limiting losses over higher returns.
- 20-40% high-risk investments; at times, the investment team may reduce this to 10%.
- 60-80% low-risk investments.
- Could contain up to 25% in overseas investments.
- Generate growth over a greater time period.
- Suited for investors who give equal importance to making gains and controlling potential losses.
- 40-60% high-risk investments, Wealthifys’ investment team may increase or decrease this to 70% or 30% respectively.
- Generally 50:50 between high- and low-risk investments.
- Could contain up to 50% in overseas investments.
- Generate high growth over the longer term.
- Making gains is the priority for the investor.
- 60-80% high-risk investments, Wealthifys’ investment team may increase or decrease this to 50% or 90% respectively.
- Could contain up to 75% in overseas investments.
- Aim is to maximise growth over a lengthier period of time.
- Suitable for investors focused on maximising gains.
- 80-100% high-risk investments, Wealthifys’ investment team may decrease this to 70%.
- Could contain up to 100% in overseas investments.
If you invested £1 initially and then £100/month consistently for 10 years on an ‘original’ plan with a ‘confident’ style you achieve a projected value of £14,044, a massive return of £2000+ in addition to your own investment.
Wealthify fees consist of management fees and investment costs (fund charges and market spread).
For original plans, the management fee is 0.6% and an investment cost of 0.16%.
For ethical plans, the management fee is 0.6% and an investment cost of 0.56%. Slightly more expensive than original plans. This is due to ethical plans being made up of proactively managed passive and active funds to ensure standards are upheld.
If you would like to offset these fees when you join by getting a free £25 added to your account, sign up through my link. To be eligible, your initial investment must be at least £500 and held for three continuous months in a plan.
Who owns Wealthify?
As of June 2020, Wealthify became a subsidiary of the British insurance company Aviva but continues to be individually run.
Wealthify ethical investing review
Ethical investing is becoming more popular as individuals are more aware of their impact and strive to be socially responsible. The ethical plans contain a mix of funds and ETFs from providers, such as, EdenTree and LionTrust. Wealthifys’ ethical investing is set up to exclude companies involved with:
- adult entertainment,
- animal testing,
- poor human and labour rights,
- and other unethical activities.
Often individuals are unsure about ethical investing and worry that it may underperform. I have attached a screenshot of my ethical Pension plan and my GIA to illustrate my own experience. Currently, my pensions growth % stands higher than my general investment account returns.
% returns are calculated using ‘time-weighted rate of return’ – a way to show your actual return, ignoring any deposits and withdrawals.
I opted for an ethical pension plan as I have many years left saving for my retirement. Over those years, I want to contribute to ethical and sustainable companies through investments, and any gains made be from a fair source.
Wealthify pension review
If you are self-employed, this is important!
I find myself in a job where I cannot predict how much I earn as this depends on how many hours I work, and therefore I am unable to commit to a consistent investment every month. I have found this self-invested personal pension a flexible solution. You can alter and even stop contributions to the SIPP; it can be entirely adjusted to suit you and your situation.
Again there is an option for an ethical plan for those who are conscious of social impacts. If you would like to make a positive change, you can effortlessly transfer existing pensions to Wealthify. Wealthify has an easy to use pension calculator to visualise how much you could have in the pot if you started investing.
Wealthify will instantly add 25% tax relief on each contribution, up to £32,000 or 100% of your salary, meaning you won’t need to chase up HMRC. Consequently, every £100 invested in the pension plan is worth £125 for a basic tax rate payer.
Wealthifys’ SIPP can also complement your workplace and state pension.
Is Wealthify any good?
I 100% think so! Here are my favourite things about Wealthify:
- dashboard and app to monitor plans, easy layout to keep an overview
- very passive investment style
- low fees
- no fees to join or close plans
- knowledgeable and helpful customer service – over the last year, I asked questions when I wasn’t sure about something, the team has always been quick to reply and resolve any queries
- helpful blog written to update and inform investors without finance jargon
- refer a friend scheme
- investments are covered up to £85,000 under Financial Services Compensation Scheme, FSCS
- backed by a large company (Aviva)
- email updates about internal changes and explanations for alterations to your plan that reflect market changes
Which is better: Wealthify vs Nutmeg
As I haven’t used Nutmeg, I am unable to give a fair comparison. But you can try it out yourself! You can use more than one robo-advisor investment company at any time. As neither Wealthify nor Nutmeg have fees to join or leave, you are free to change.
Remember, you can open one stocks and shares (investment) ISA per year. However, you can open three other ISAs, including Cash, Innovative Finance and Lifetime ISA and split your yearly ISA tax-efficient allowance between them.
What are Robo-advisors?
Robo-advisors are digital platforms programmed with algorithms that can make automated investments with minimal human supervision.
How does a Robo-advisor work?
Once the robo-advisor has all the data it needs, it will automatically start investing based on its algorithm. Robo-advisors often use passive index investing strategies.
Can Robo-advisors make you money?
In short: yes!
The passive index investing strategy that most robo-advisors use involves purchasing funds and holding onto them for an extended time period, replicating the current market. Robo-advisors are the low-cost alternative to a financial advisor allowing investment companies to bring down the fees they charge.
But robo-advisors also can lose you money as any investment can or whilst rebalancing your portfolio and tax-loss harvesting.
My thoughts on Wealthify
Wealthify has opened up investing for me. Not only is it accessible, with the minimum contribution starting at £1, it is also easy to understand with plenty of information available on their website. I have enjoyed being able to sit back and see my investments grow over the past year and have also learnt a lot about how world events can have an impact.
Finally, if you are unsure of investing, do your research and start small. The best thing you can do is diversify your saving strategy. I hope this Wealthify review has sparked your interest.
For a free £25 when opening a Wealthify account, check out my link. A minimum of £500 needs to be invested for three months to be eligible.
Thank you for reading my review; we would love to hear from you! Have you heard of robo-advisors before? Or perhaps if you’re new to investing too! Comment below and let us know!
This blog shares information on investing and saving but does not provide personal advice. Please seek professional advice from a financial advisor if you are unsure which investments are right for you. Investments can go up as well as down in value, and you may lose your money.