Wealthyhood Review: Should you invest with the new kids on the block?

What is Wealthyhood?

In this review we:

• Give our ratings based on their nearest peers
• Tell you what we think of them after testing them with real money 
• Highlight the key costs, facts and figures of their accounts

Every day I see new investing apps come into my inbox from the affiliate networks we work with, some grab your attention, some not so much, but Wealthyhood did for some reason. Maybe because the name is a mix of Wealthify and Robinhood, and I really like a portmanteau.

But first, the bad news, it doesn’t really do what is says on the LinkedIn which is “to be the first DIY wealth-building app for long-term investors.” Because a. they don’t have an app, b. they are not a DIY account and c. they are not the first.

I say not DIY because you can only invest in ETFs, not individual shares, which in my mind makes it a DIY platform, a bit like the B&Q investing equivalents, Hargreaves Lansdown or Interactive Investor where if you want to do something yourself you can go there and get pretty much what ever you want.

Also, Panagiotis Lampropoulos from Wealthyhood’s operations has told us that that app is being reviewed in the app store at the moment and should be released soon.

There is good news though, Wealthyhood is free, you can open an account with a tenner and they do do some things better than their competitors.

What can you invest in with Wealthyhood?

At the moment, you can only invest in a general investment account, there is no ISA or SIPP for tax-free investing, which really defeats the purpose of starting to invest in the long term. Anyone, who is starting to invest should always, if possible, invest through a stocks and shares ISA as you can put in up to £20k a year and not pay capital gains tax on your profit. If you don’t, you are (as Andrew Russell, the CEO of Wealthify said when I interviewed him) “you are just walking past your money”.

Wealthyhood is cheap though, as in so cheap it’s free to invest with. There are no dealing charges for buying and selling ETFs and there is also no account charge. Which makes it one of the cheapest ways to start investing with a small amount of money.

You also get the option to rebalance your portfolio manually, so if you think the stock market is due a bit of a dip, you can increase your exposure to gold, through the iShares Physical Gold Fund (as investors often “flight to the safety of gold” when the markets are bad), or de-risk by moving into UK, US or emerging market bonds. Even though UK Government Gilts have taken a bit of a battering recently, they are still safe haven investments, as if the UK Government defaults, we’ll all have bigger problems…

Plus, if you want to take a view on a specific sector, like video games, cloud computing or clean energy you can top up on the individual ETFs that track those sectors. Something you can’t do with other robo-advisors. You can of course, do that sort of thing with apps like eToro, but eToro doesn’t offer portfolio plans and don’t even get me started again on how eToro only let you invest in USD…

It is a shame you can’t invest in individual stocks with Wealthyhood, though. I know some say that encourages trading, and everyone knows that people lose money trading, but there are already plenty of apps and investment accounts where you can build a low-cost portfolio of ETFs, it would have been great to see one that also includes the option to buy individual shares, (and not just of the FAANG variety).

Afterall, one of the things that connect customers to their investment provider most of all is interest, and buying shares in a smaller growth company you want to see flourish through the years is key to keeping that relationship alive.

My benchmark is always BOTB, not sure why, it’s just a nice little AIM stock I like to search for on new investment apps and see if I can buy it. Plus, I’d like to win a sports car and a while ago if you’d bought shares in BOTB instead of playing every week you could have bought a supercar with the profits. That was, of course, until the share price peaked during lockdown and the directors sold out via a placing through PrimaryBid, much to the dismay of the LSE.co.uk bulletin board chatterboxes.

How does Wealthyhood compare to Nutmeg and Wealthify?

One of the things Wealthyhood does better than Nutmeg and Wealthify is give you slightly more control over your portfolio. You can build your portfolio based on exactly what sectors you want to invest in by region and risk, and if you’re in “generation rent” and the prospect of buying a house is ever distant, you can get access to investing in property through Global Real Estate funds, specifically, the iShares Developed Markets Property Yield UCITS ETF which as you know, seeks to track the performance of an index composed of listed real estate companies and Real Estate Investment Trusts (REITS) from developed countries, excluding Greece.

Which is a bit of a shame seeing as Wealthyhood is backed by Greek venture capitalists. According to Crunchbase they have raised £765k to build the company and hope to be a unicorn (worth a £bn) soon. Much like the stratospheric rise of Freetrade, although Freetrade keep on tapping Crowdcube up for more money at an alarming regular basis.

With Wealthify and Nutmeg, you do have the benefit of knowing that your investment platform is backed by Aviva and JP Morgan respectively.

Can you make money with Wealthyhood?

Yes, you can, but only if the stock market goes up. Or, if you want to be clever, you can buy an inverse ETF, which goes up as the market goes down. But whatever way you want the market to move it never goes in a straight line and if your portfolio is linked to mainly passive ETFs that track global stock market performance, you’ll see dips and rises, but in the long term, the stock market has a habit of bouncing back. If you look back at any long-term chart of an index, you’ll note a gradual upwards theme because indices track the best-performing stocks, and if those stocks fail to perform, they are kicked out of the index and replaced with a better one.

Is Wealthyhood safe?

Wealthyhood is regulated by the FCA, (see their FCA register entry here) and is a trading name of WealthKernal, who provide the investment infrastructure for their platform. It’s not unusual for new investment firms to white label the technology of an existing unbranded broker to provide investment services. Infact, it’s very common, some could argue that at one point the majority of investment accounts in the UK were ultimately powered from an unassuming investment service in Wales.

But yes, Wealthyhood is safe. As they are regulated by the FCA, if they fail as a business, the FSCS will give you up to £85,000 of your money back.

You have to ask yourself, though, do you want the risk of investing with a free start-up or would you feel more comfortable putting your money with a more expensive and established provider?

Further reading: Are loss-making fintech investment providers worth the risk?