As recently as 10 years ago, if you wanted help with investments you had no choice but to visit a financial adviser.
This could mean paying fees, or worse commission (now thankfully banned); not to mention the hassle of organising an appointment.
Now, thanks to so-called ‘robo-advisers’ like Wealthsimple, you can get a personalised investment portfolio drawn up for you in minutes, at a price that rivals do-it-yourself investment platforms.
This approach is attractive both to new investors lacking confidence and seasoned investors with limited time.
Wealthsimple was first launched in Canada in 2014 and has since expanded to the UK and the USA. In October, it began offering selt-invested personal pensions (SIPPs) with a similar fee structure to its Stocks and Shares ISA.
This review looks at Wealthsimple, its fees and how it distinguishes itself in an increasingly crowded robo-advice market.
As an investment, your money can go down instead of up: please note that this review is about user experience rather than investment performance.
Read our complete guide to getting started in investing
How does it work?
Wealthsimple aren’t so keen on the term robo-adviser, instead, says CEO Europe Toby Triebel; they see themselves as “the most human digital adviser”.
That’s because, in addition to the algorithms that pick your portfolio, it’s possible to pick up the phone and talk to a licensed financial adviser, for free.
Otherwise, Wealthsimple is similar to competitors like Nutmeg, Wealthify or Moneyfarm: you answer a number of questions about your financial situation and get recommended a portfolio of 10-15 low-cost passive funds.
You can then invest in these funds within a Stocks and Shares ISA, Junior ISA, general investment account or self-investment pension plan (SIPP).
The money can come directly from your bank account or via a debit card and your investments can be managed via the website or a mobile app.
Who can get Wealthsimple?
Any adult with a current account in the UK; the minimum investment is just £1.
Bear in mind that you’re only allowed to set up one Stocks and Shares ISA per tax year; if you’ve already set one up you’ll need to get a Wealthsimple taxable general investment account instead.
What we like
Application Process
Getting started with Wealthsimple takes around 10 minutes and you’ll be asked some simple questions before you’re recommended a portfolio.
These questions are straightforward – such as how long you want to invest for and what you’re prepared to lose – and won’t have you scrambling for old bank statements.
It’s possible to see which funds you’ve been recommended and talk to a (human) adviser for free before you invest.
Investment advice
Even if you don’t do it often, being able to talk to a real person on the phone gives Wealthsimple a huge advantage over its rather faceless competitors, by giving that added reassurance.
Considering the minimum investment for Wealthsimple is just £1, this means beginner investors with limited funds can get access to advice which was previously reserved for the wealthy.
Automatically rebalances funds
Wealthsimple will automatically rebalance your funds over time so the overall portfolio doesn’t become more or less risky.
This helpful service isn’t standard across investment platforms and could save you time.
The magazine
On Wealthsimple’s website and app, you can find articles and interviews about money.
These are surprisingly varied and interesting – when we looked there were money tips from Kim Kardashian, Queer Eye TV star Jonathan Van Ness and Arsenal football player Hector Bellerin.
Ethical investment
We’ve been complaining about the lack of ethical investment options for beginners so it’s encouraging that Wealthsimple gives its customers this option.
You can switch to an ethical portfolio at the end of the application process – one that’s tailored to your risk profile - although you’ll need a minimum £5,000 in investments to do so.
Pensions
It's high time that robo-advisers brought low fees and tailored portfolios to pensions.
There's no minimum account size (unless you want an ethical portfolio - see above), transfers are free and the fees are low at 0.7% for under £100,000 and 0.5% above £100,000.
It also includes the same access to human advisers, a huge boost when you are literally dealing with your life savings.
What we don’t like
The fees
Invest with Wealthsimple and you’ll pay 0.7% to the platform plus 0.2% average for the funds.
This still lower than many traditional platforms but can easily be beaten by low-cost do-it-yourself platforms and even robo-advisers such as Evestor.
You need to decide whether you’ll benefit from Wealthsimple’s added-value services, such as the recommended portfolio, human advice and automatic rebalancing.
You can get up to £5,000 managed for free (fund costs still apply) by turning on regular contributions and inviting friends to the platform. Alternately, if you invest more than £100,000, you qualify for 0.5% fees with Wealthsimple Black, which also includes other perks.
No Lifetime ISA
For first home buyers, the Lifetime ISA can be hugely helpful, as the Government will add a 25% bonus to your investments, up to £1,000 a year.
It’s, therefore, a shame that Wealthsimple doesn’t offer one, because many of its competitors do.
Read more about the Lifetime ISA here.
Adding funds
Investing with Wealthsimple is very simple; you can make one-off payments or regular contributions.
We’d like to see a few extra options, given rivals such as Moneybox will let you fund your investments through ‘payday boosts’ or rounding up the money on your morning coffee purchase
Security
Wealthsimple’s security features feel well thought-out, with the option to add two-step security, where you’ll be texted a passcode to log into your account online.
You can log into the smartphone app with Touch ID.
Your investments are protected by the FSCS up to £50,000 (this doesn’t cover a decline in the value of your investment).
Our final verdict
Wealthsimple is a great way to start investing, or want to get a self-invested pension plan (SIPP).
That’s because it gives beginners – even those with a very small amount of money – previously inaccessible benefits like a recommended portfolio, human advice and ethical investment options.
The fact that it has been in business for four years is also reassuring, given that many of its competitors appear to have emerged overnight.
Once you’ve got more comfortable with investing you can always switch to a do-it-yourself platform with cheaper fees, although Wealthsimple’s automatic rebalancing could be worth staying for.
Potential first home buyers, however, should consider using their annual £4,000 Lifetime ISA allowance with a participating investment platform before investing in Wealthsimple.
What do you think?
Have you invested with Wealthsimple? Please share your experience and opinion in the comments below.
Read our guide to the cheapest investment platforms here