Wealthify Review

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Founded in 2014 Wealthify is a Cardiff-based robo-advisor. Robo-advisors keep costs down by using algorithms and automation to minimise human interaction in order to keep costs down for customers. Wealthify also invests your money in ETFs so that ongoing costs are kept to a minimum.

In 2017 Aviva began investing in Wealthify and in 2020 it completely took over the firm. However, Wealthify is still run as a company separate from the rest of the Aviva brand.

Wealthify offers all the investment products you would expect from a much larger firm including general investment accounts, Stocks and Shares ISAs, Junior ISAs, pensions and a range of ethical investments.

If you are considering investing via a robo-advisor you’ve probably heard of Wealthify. Here you can find out more about what Wealthify offers and how it compares to other robo-advisors.

Investing with Wealthify

When you invest with Wealthify first of all you choose what product you want to invest through. This could be a general account, an ISA or a pension.

You then tell them how much risk you want to take with your investments choosing from: Cautious, Tentative, Confident, Ambitious and Adventurous. An algorithm will then match your answers with a ready-made portfolio of investments that is best suited to you.

Your money will be spread across a range of assets including cash, shares, government bonds, property and corporate bonds.

After that the Wealthify investment team keeps an eye on your portfolio and will make adjustments to ensure it remains in line with your risk profile.

You can access your Wealthify account via a computer or the Wealthify app.

Wealthify Charges and Fees

You can open an account with as little as £1, unless it is a SIPP where you have to deposit at least £50.

Your fees are split in two. There is an annual management fee of 0.6% and then the costs of your investments. Because Wealthify invests largely in ETFs your investment costs are fairly low with an average of 0.16% for Wealthify’s original plans and 0.56% for an ethical portfolio. So, if you invest £20,000 in an original portfolio you can expect to pay around £12.67 a month in fees, opt for an ethical portfolio and the costs rise to £19.33 a month.

Wealthify’s fees compare favourably with its competitors. Nutmeg charges a management fee of 0.75%, falling to 0.35% if you invest more than £100,000. Wealthsimple charges 0.70% falling to 0.50% for portfolios worth more than £100,000. So, for smaller portfolios Wealthify’s 0.6% fee is attractive.

Wealthify's General Investment account

The Wealthify General Investment account is a simple option where you can deposit money and then invest it in your portfolio. You can open an account with as little as £1 and there is no maximum limit.

Open a General Investment Account and you can choose between an Original Plan or an Ethical Plan. You then choose your risk level, and your money is invested accordingly.

You’ll pay a 0.6% annual management fee and then an additional cost on top of that for your investments. This second cost is estimated at 0.16% for an original plan rising to 0.56% for ethical investments.

Wealthify Investment ISAs

Wealthify offers Investment ISAs so you can save your money tax efficiently. With an investment ISA you can deposit up to £20,000 a year – assuming you aren’t using up any of your ISA allowance elsewhere. Your investment can then grow free from income tax, dividend tax or capital gains tax.

You can also transfer an existing ISA into a Wealthify ISA.

The Wealthify Investment ISA works in much the same way as Wealthify’s General Investment Account. Once you’ve opened your account and deposited your money it can be invested in an original or ethical portfolio and you can choose how much risk you take with your investments. Wealthify will then choose your investments and monitor them for you.

Fees are the same as for the General Investment Account. You’ll pay a 0.6% annual management fee then investments costs averaging 0.16% on top of that, or 0.56% if you opt for an ethical portfolio.

Wealthify Junior ISA

Children aged up to 18 can have a Junior ISA. Much like the Stocks and Shares ISA mentioned above money held in a Junior ISA is protected from income tax, dividend tax and capital gains tax. The difference is the money cannot be access until the child turns 18 and the annual allowance is lower at £9,000 a year.

You can open a Junior ISA with Wealthify, but only if they don’t already have an investment Junior ISA elsewhere. Children can hold one cash Junior ISA and one investment Junior ISA at a time. If they already have an investment Junior ISA, you can transfer it to Wealthify.

The fees on the Wealthify Junior ISA are a 0.6% annual management charge and an average investment cost of 0.16% for an original plan rising to 0.56% for an ethical plan.

Wealthify Pensions

If you are wanting to save for retirement you can do that via a Wealthify Pension, also known as a Wealthify SIPP. This can be opened with as little as £50, or you can transfer an existing pension to Wealthify.

You will get tax relief automatically added to your Wealthify pension whenever you make a contribution. You get an automatic 25% top-up to reflect the basic rate of income tax that you have paid on that money.

As this is a SIPP rather than a workplace pension your employer can’t make contributions to it.

When you set up a Wealthify pension you’ll need to answer some questions about your expected retirement age, how much you plan to invest and what risk you are willing to take with your investments. Wealthify will then show you an estimate of how much your pension may be worth when you retire. You can fiddle with your investment style and amounts in order to see how it could affect your eventual pension pot.

You can then see a breakdown of how your money may be invested by asset, region and individual funds.

You’ll pay an annual management charge of 0.6% plus average investment costs of 0.14% or 0.55% if you opt for an ethical portfolio.

Wealthify Original Plans

Once you have decided what product you want the next thing is choosing what investments you want in it. You have a choice between the Wealthify Original Plan and Wealthify Ethical Investing.

With the Wealthify Original Plan your money will be invested in a range of funds. These funds contain a variety of assets including government bonds, shares, commodities and commercial property. By investing in this way your money is spread across different assets rather than focussed on one thing. This is called diversification and means you are spreading your risk as, if one asset was to fall substantially in value your losses would be reduced as you aren’t heavily invested in one thing.

The mix of assets in your Original Plan will depend on what risk level you have opted for. The more risk you are prepared to take the more of your money will be invested in more volatile assets. If you have opted for a low-risk portfolio you will have more money in fairly stable assets such as bonds.

Wealthify’s Original Plan has average annual costs of 0.16%. In contrast, Nutmeg – another robo-advisor – has average investment costs of 0.19% for its fully managed portfolio.

Wealthify Ethical Investing

With Wealthify Ethical Investing you can place your money with companies that have a positive impact on society and the environment. Ethical funds tend to avoid companies and sectors such as tobacco, gambling and weapons and firms that may contribute to deforestation or have unfair labour practices.

The Wealthify Ethical Investing plan uses mutual funds and exchange-traded funds (ETFs) to build a portfolio of shares and bonds that meet Wealthify’s ethical standards.

There are five different ethical portfolios to choose from depending on your attitude to risk. The cautious plan is largely invested in bonds while at the other end of the scale the majority of the adventurous plan is invested in shares.

The average investment cost for the Wealthify Ethical Investing plan is 0.56% per year. This is expensive when compared with Nutmeg’s Socially Responsible portfolio that has average investment costs of 0.32%.

Wealthify versus Nutmeg

Wealthify and Nutmeg are probably the two most well-known robo-advisors in the UK, so how do they compare?

When it comes to costs Wealthify and Nutmeg are pretty similar, although Nutmeg may work out cheaper for people with large amounts to invest.

Nutmeg charges an annual management charge of 0.75% for portfolios worth up to £100,000, then it falls to 0.35%. On top of that you’ll pay 0.14% to 0.32% for your investment costs depending on the plan you opt for.

In contrast, Wealthify’s management fee is 0.6% per year with fund fees of 0.16% to 0.56% depending on what you choose.

Both platforms offer general investment accounts, pensions, ISAs and Junior ISAs. The only difference is Nutmeg offers a Lifetime ISA as well as a stocks and shares ISA whereas Wealthify only offers the latter.

When it comes to help making investment decisions Nutmeg offers more research articles and has introduced a personalised financial advice service too. Wealthify is far more pared back with just a selection of guides on its blog.

If you want to compare their investment performance, then over five years Nutmeg’s mid-risk fully managed portfolio has returned 31.8%. In contrast, Wealthify’s most similar portfolio – its Confident Original returned 33.43% over the same period. But remember, past performance is no guarantee of what the future might bring.

Wealthify versus Wealthsimple

If you are comparing Wealthify versus Wealthsimple the place to start is with their product range. Both offer a standard investment account, a pension, a Junior ISA and a stocks and shares ISA.

As for the fees, Wealthsimple has the edge for people with larger portfolios. It charges a 0.7% annual management fee on portfolios worth up to £100,000 then it falls to 0.5%. On top of that you’ll pay average investment charges of 0.2% a year. Wealthify charges a 0.6% management fee on all portfolios regardless of value plus average annual investment charges of 0.16% or 0.56% if you opt for an ethical plan.

Wealthsimple and Wealthify offer similar levels of assistance to people with smaller portfolios. But if your account grows beyond £100,000 Wealthsimple will offer you a financial planning session with an advisor and if your portfolio is worth more than £500,000, you’ll get a dedicated financial advisor you can consult whenever you like.

Wealthify and Aviva

In October 2017 Aviva, one of the UK’s biggest insurance groups, bought a majority stake in Wealthify. Then in June 2020 Wealthify was brought into the Aviva group when the insurer bought the company in its entirety.

Wealthify is still run separately from Aviva but the fact it is owned by such an established company means it has secure funding and access to all of Aviva’s customer base. Both these factors are good news for the firm.

Wealthify Investment Performance

You can find performance data for Wealthify going back five years for every portfolio on their site but here is an overview.

Original Plan 2020 Performance

• Cautious – 2.70%
• Tentative – 3.88%
• Confident – 4.87%
• Ambitious – 5.12%
• Adventurous – 5.06%

Ethical Investing Plan 202 Performance

• Cautious – 4.14%
• Tentative – 6.45%
• Confident – 9.04%
• Ambitious – 11.16%
• Adventurous – 13.43%

Original Plan 2019 Performance

• Cautious – +6.36%
• Tentative – +9.29%
• Confident – +11.89%
• Ambitious – +14.33%
• Adventurous – +17.09%

Ethical Investing Plan 2019 Performance

• Cautious – +7.83%
• Tentative – +9.66%
• Confident – +11.73%
• Ambitious – +14.04%
• Adventurous – +16.63%