Choosing From the Best Robo Advisors in the UK
If you know anything about modern investing, you’ll know that there are many robo advisors in the UK who will manage your investments for you for a nominal fee. This has been one of the biggest investment innovations in recent years, and the competition in this industry is thick, as dozens of robo advisors in the UK will attest.
We’ll help you separate the wheat from the chaff when choosing from robo advisors in the UK. All of these options are good in their own way, but you will probably find that there is one in particular that meets your unique needs, while another will appeal to others. We hope this helps. Happy investing!
Nutmeg
Nutmeg is the first name among robo advisors in the UK. It has been responsible for drawing thousands of non-investors into the world of financial planning for retirement and future goals. Its methods are pretty standard for anyone who keeps up with this space, but this is only because its method have been so effectively emulated by younger companies.
Nutmeg offers fully managed (by humans) portfolios for 0.75% per year for accounts of up to £100,000, a large savings over traditional human investor services. The fee for a fixed allocation portfolio (1 of 15 options for various risk tolerances and investment preferences) is 0.45% per year for accounts of up to £100,000. Fees fall to 0.35% and 0.25% for accounts with balances larger than £100,000.
An initial deposit of £500 is required if a monthly deposit of £100 is initiated. Without setting up the monthly deposit, the minimum deposit is raised to £5,000. There are investment fees associated with each ETF that usually amount to about 0.19% each year, and there is a further fee of 0.35%
Timber
Timber differentiates itself from the robo advisors in the UK crowd by offering personalized, human management of assets. In fact, Timber doesn’t stop at investment. They can help manage every facet of your financial life, providing conversations with Timber experts about how to better your situation.
Users have to pay a 0.50% charge for financial advice, and another 0.51% to 0.61% for investment management services. All together, this totals up to 1.11% if one chooses all of Timber’s offerings. The minimum deposit is £100 every month, or a single lump sum of £1000.
While Timber isn’t a true robo advisor, their human advisors will mimic their services by providing a low cost portfolio specified to your needs and preferences. There is a bit more wiggle room when it comes to what may be included in your portfolio, compared to typical robo advisors, because these assets are chosen with the help of a real human advisor.
Scalable Capital
Scalable Capital rides the line between human and automated investment management. They have 23 portfolios that are created and adjusted by human managers, but their investors are assigned to each portfolio by algorithm according to user need and preference.
The minimum account balance is £10,000. The service runs 0.75% annually, plus investment costs associated with the buying and selling of assets, usually around 0.25% each year, or 1% total.
MoneyFarm
MoneyFarm was started in Italy and became so popular that it expanded and became one of the best robo advisors in the UK. MoneyFarm is another robo advisor that assigns their users to one of a series of portfolios created and managed by human advisors. There are 6 choices, but the user won’t have a direct say in which is picked. The result will be determined by the way the user answers early questions after starting an account.
For balances of £0-10,000, there are no management charges, only the costs associated with buying and selling (usually around 0.30% per year). For accounts worth £10,001-100,000, there is a 0.6% administration fee plus investment costs. For accounts worth over £1,000,000 the administration fee is just 0.40% and trading costs below this number are waived.
IG Smart Portfolios
IG Smart Portfolios is one of the more interesting robo advisors in the UK because they offer a varying level of management oversight, depending on what the user wants. If the user wants totally passive investing, the service can act like a robo advisor, assigning the user’s funds to specific ETFs. If the user wants to choose their own portfolio assets, IG Smart Portfolios managers will help them do just that.
The minimum balance is £500. Fees range from 0.1% to 0.65% depending on the balance of the account, with discounts going to larger balances. There are further discount opportunities that are sometimes made available. If you are attracted to the flexibility of this platform, it’s worth doing some of your own research to see if it’s for you.
evestor
Evestor is the newest face on the block in this list of robo advisors in the UK. They offer a truly hybrid service, where users can be assigned to portfolios or have more of a collaborative role with investment managers, who are even available for 1 on 1 discussion over Skype! There are many unusual facets to the evestor business model, so take a look if you wish to try a service that is potentially an innovator in the space.
Annual fees always come out to slightly less than 0.50%. 0.35% of this pays for the services that the company provides (advice-giving, management of portfolios, administration, custody, etc.) The rest goes to cover the buying and selling of assets. All in all, this is one of the lower-priced offerings on this list. Time will tell if the company is successful in the long term.
There are many other robo advisors in the UK which we simply didn’t have space for. If you are a newcomer to this space, don’t limit yourself to the first name you find online. Look around to find a robo advisor who meets your unique needs and offers a price that you can well afford. Happy investing!