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Best Robo Advisors UK

In my guide to the best robo advisors, UK residents have access to a long list of auto-invest robo-platforms, including programs offered by industry disruptors and challenger banks like investment platforms WealthifyMoneybox and Moneyfarm.

My complete guide to robo advisers UK explains what makes robo advisers different, whether you can trust them, and how they fit into a strong retirement strategy.

Here is my list of the best Robo Advisors UK. Please review each provider before making a decision on which one is best for your needs.

Browse the top robo advisors for May 2024

InvestEngine logo

InvestEngine – Best for low-cost ETFs

InvestEngine have successfully eradicated any platform fees, set up fees, dealing fees, ISA fees, or withdrawal fees, making them a very low-cost option for investors.

InvestEngine are a relative newcomer in the robo advisor space, however, what sets them apart from their competition is that they have bridged the gap between robo advisors and investment platforms by offering both fully managed portfolios and DIY options.

This makes them a good option for both passive and experienced investors.

What I like about InvestEngine robo advisory services

Firstly, the absence of any fees for the ISA, makes this one of the most cost effective ways to invest in a tax wrapper. They have also supplied a good range of fully managed ETFs, including some of the Vanguard funds, which are carefully managed according to your risk profile, goals, and investment amount.

Fees: 0.25% for fully managed portfolio platform fees, 0.15% – 0.46% portfolio fees.

Minimum balance: £100

Products available: Stocks and Shares ISA, Personal Account, Business Account

£25 Welcome Bonus

£25 Welcome Bonus when you invest £100 or more. Terms apply

With investment, your capital is at risk. This could mean the value of your investments goes down as well as up.

With investment, your capital is at risk. This could mean the value of your investments goes down as well as up.

Moneybox logo

Moneybox – Best for beginners and savers

Moneybox is a UK Robo Advisor that has harnessed the power of ‘rounding up’ to help its account holders save and invest their spare change. The difference between Moneybox and a lot of the other apps on the market is that they are much more geared towards encouraging account holders to save, and even offer 3% AER (variable) on any money that you hold as cash in your stocks and shares ISA.

Moneybox have set out with the aim to make investing as simple and accessible to everyone as possible and anyone can start investing with as little as £1. They provide a choice of 24 funds to choose from and investing can either be done from their Stocks and Shares ISA, Lifetime ISA, General Investment Account, Pension, Junior ISA or Socially Responsible Investing Account.

What I like about the robo advisory services at Moneybox

One of the advantages at Moneybox is their low entry level of just £1. This really makes investing accessible to everyone. You can also choose from three ready-made portfolios according to the level of risk you want to assume.

Fees: £1 subscription fee for non-pension accounts, 0.45% annual platform fee, 0.12% to 0.58% fund costs

Minimum balance: £1

Products available: General Investment Account, Stocks and Shares ISA, Junior ISA, Personal Pension, range of savings accounts

Nutmeg logo

Nutmeg – Best for human advice

Nutmeg is an established robo advisor in the UK, offering a wide range of portfolios including a range of 10 socially responsible portfolios that only invest in companies with high environmental, social, and governance standards.

What I like about Nutmeg’s robo-advisory services

In addition to all the robo-advisory services offered by the other platforms on this list, Nutmeg also provide access to human advisors. Whilst this does come at a cost of £575 for financial planning and advice, this can often prove worthwhile, especially for more complex finances and to get you on track for retirement.

The subsequent financial plan will help build a picture of your current finances, identify financial goals, and create a financial plan to help realise those goals.

There is also free guidance available to help you make the most of your money.

Fees: 0.25% – 0.75% depending on investment amount and chosen portfolio

Minimum balance: £500 for an ISA or Pension, £100 for the Junior ISA or Lifetime ISA

Products available: Stocks and Shares ISA, Junior ISA, Lifetime ISA, General Investment Account, Pension account

Approved by Nutmeg Fact Checked 22/03/23

As with all investing, your capital is at risk. Tax treatments depend on your individual circumstances and may change in the future. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest.

Wealthyhood logo

Wealthyhood – Best for those who want more control over their portfolio

If you are looking to engage more with your portfolio and the assets, geography, and sector or industry you’re invested in, then Wealthyhood offers a solution that is still beginner friendly. Wealthyhood guide you through your choices as part of the seamless onboarding process, making it possible for even a complete novice to curate a diversified portfolio.

What I like about Wealthyhood robo advisory services

This is an excellent way for inexperienced investors to learn as they go in a simple, uncluttered environment that provides ample guidance and easy to follow educational resources.

Wealthyhood is also a cost effective solution and I really liked the addition of a virtual portfolio so you can track your investments in real time and fine tune your portfolio before risking any of your actual funds.

Fees: £1 per month for the basic plan

Minimum balance: £10

Products available: General Investment Account

Capital at risk.

Freetrade logo

Freetrade – Best for free shares

Freetrade isn’t exactly a robo advisor as it allows for much more flexibility when choosing your investments. However, I have included them on this list for several reasons.

Firstly, the free share offered on your first deposit with Freetrade can be valued anywhere up to £200 and is a nice boost to your portfolio should you be just starting out with investing.

In addition, Freetrade have developed a really easy to use app, which makes picking and choosing investments a breeze. Whilst you won’t be able to access advice on your investments, they do have some decent articles including ‘Best investments for beginners’

What I like about Freetrade’s robo advisory services.

As mentioned, Freetrade isn’t strictly a robo advisor, however, they have a decent range of ETFs to choose from and should you be happy to invest using their General Investment Account, this can be a really cost effective solution with zero commission for buying or selling investments and zero account fees.

Fees: £4.99 for the ISA, £9.99 for ISA and SIPP

Minimum balance: £0

Products available: General Investment Account, ISA, SIPP

When you invest your capital is at risk, the value of your investments can go down as well as up and you may get back less than what you invest. *Other charges apply. Free share terms and conditions apply. The probability is weighted, so more expensive free shares will be rarer.

Moneyfarm logo

Moneyfarm: Ethical investments plus financial advice

Moneyfarm launched in Italy in 2012, and is one of the largest and best funded UK robo advisors.

Today Moneyfarm has seven managed portfolios for customers to choose from according to their attitude to risk with exposure to ETFs, although with even the riskiest portfolio at Moneyfarm being largely focused on UK and US stocks in their asset allocation, it is not an overly risky strategy.

Moneyfarm also operates a tiered fee system whereby accounts under £10 000 will incur Moneyfarm management fees of 0.75% per annum. These fees can be reduced all the way to 0.35% for accounts worth over £100 000.

What I like about Moneyfarm’s robo advisory service

Moneyfarm has positioned themselves in the market as being ideal for beginners with a simple pricing structure and heavily diversified portfolios for investors who would usually struggle to access wealth managers or indeed investment advice. Customers can take advantage of free, personalised digital financial advice from one of their investment consultants.

They also provide a top performing stocks and shares ISA and their website displays a clear four year track record of the performance of their portfolios.

Fees: 0.35% – 0.75% annual management free. Average fund management fee of 0.20%

Minimum balance: £500 and £100 monthly direct debit

Products available: Stocks and Shares ISA, Junior ISA, General Investment Account, Personal Pension

Plum Savings App logo

Plum – Best for automated savings

Plum is an excellent saving tool for people who struggle to save. They employ sophisticated algorithms and artificial intelligence to analyse your income and expenditure in order to identify amounts that you can save without really noticing it. In order to achieve this, Plum will link to your bank account and in doing so can identify areas where it thinks you are spending too much on your household bills.

Whilst the basic saving pocket with Plum is free of any charges and therefore a great starting account, they also offer the option to invest your savings, although in order to do this you would need to upgrade to their General Investment Account or Stocks and Shares ISA at a cost of £1 per month.

What I like about Plum’s robo advisory service

Plum offers investors a choice between ten high, medium and low investment portfolios that include the Vanguard Lifestrategy fund range. Funds can be chosen according to your appetite for risk, although it’s best to be aware that the £1 monthly account charge will soon eat away at smaller accounts.

Fees: Stocks and shares ISA: £1 per month (first month free), Fund charges: 0.48% average

Minimum balance: £0

Products available: Stocks and Shares ISA, Personal Pension, General Investment Account, Easy Access Interest Pocket

Circa5000 logo

Circa5000 – Best for impact investing

Even old school investors are getting in on the Green action now and Joe Biden’s commitment to clean energy will have its impact felt across the entire globe. This is where robo advisors like Circa5000 will start dominating the market, with their themed portfolios that address impact causes such as climate change and equality. Investors can finally invest in line with their values and the best part is that this is now an area that is experiencing enough growth that you don’t have to take a hit to your returns in order to have a positive impact.

What I like about Circa5000 robo advisory services

Circa5000 have placed themselves in the market as an app that is suitable for new investors. It has the capability of linking to your bank account in order to include handy little features such as rounding up.

The minimum investment amount at Circa5000 is just £5, and whilst this may sound like an attractive prospect to new investors who just want to dabble in the market without risking too much capital, it is actually one of the biggest flaws in their pricing structure as the £1 per month fee will slowly erode away at a balance of this size and any returns that may have come from it. In order to see any returns on Circa5000 you would almost certainly need to have over £100 a month invested.

Fees: £1 monthly fee with no annual platform fees until your account balance goes over £3,000, at which point you will be charged 0.3% of your total assets under management.

Minimum balance: £5

Products available: Stocks and Shares ISA, General Investment Account, Junior ISA

Chip App logo

Chip – Best for earning interest

Chip was originally launched as a savings app, but has since expanded to include investing. They call themselves a wealth app.

This has been developed specifically for individuals who historically struggle to save with autosaves and recurring saves making building your wealth completely seamless.

The money you save can either be used to earn up to 3% interest in one of Chip’s Easy Access or Notice accounts or invested in one of Chip’s fully managed themed funds. There is even a stocks and shares ISA for tax-free earnings.

What I like about Chip’s robo advisory service

Chip is a great option for hands free investing or auto investing as they like to call it. This smart tech will automatically move money into an investment fund of your choice every month or every few days. It’s an excellent way to drip feed your money into the stock market, thus mitigating your risk by buying in at different price points.

Fees: free for the Basic Plan, £4.99 for ChipX

Minimum balance: £0

Products available: General Investment Account, Stocks and Shares ISA, various savings account with up to 3% AER

Wombat Investment App logo

Wombat – Best for ease of use

If you are looking for a robo advisor with a really low cost ISA that is an absolute breeze to set up and use, then look no further than Wombat.

Unlike a lot of other robo advisors, Wombat also offer 0.2% cashback when you invest in US shares via their Instant GIA

What I liked about the Wombat’s robo advisory service

Wombat have some really handy auto invest features as well as fractional shares, round-ups, and access to 26 exchange traded funds. Within these funds are some impact investing themed funds that provide scope to invest in companies that are making a positive impact on the planet.

Auto-invest allows users to drip feed money into their funds on a monthly basis with no interaction. In addition, Wombat users can enable round-ups, in order to grow your investments without really noticing the impact to their bank account.

Fees: £0 for GIA, £1 per month for ISA

Minimum balance: £10

Products available: Stocks and Shares ISA, General Investment Account

Capital at risk. Tax treatment depends on individual circumstances and is subject to change. T&Cs apply to the £10 offer and cashback.

What is a Robo Advisor?

A robo advisor is an online investment platform that uses a short survey to determine your investment strategy in order to match you to an appropriate portfolio, and a proprietary software program to manage your investment. This acts as a kind of financial advice that takes place on the back of artificial intelligence and complex algorithms. It’s a hands-off approach to investing your money that allows both new and familiar investors to check in on their portfolio every one in a while without the need to learn the ins and outs of trading on the stock market.

It’s best to think of a robo adviser as an all-in-one robo investing and wealth management solution that requires very little from the client beyond your bank details and a few questions to establish your risk profile in order to make investment decisions on your behalf. You won’t be making trades, and you probably won’t know whose stocks, shares, and bonds you invested in. Instead, you sit back and let the computer make the decisions on your behalf. What could be easier?

What Products Do Robo Advisors UK Offer?

The best robo advisors offer both general investment or a trading account as well as a number of the popular retirement and tax-deferment options used across the UK. The typical robo advisor may provide some if not all of the following products:

  • General Investment Accounts
  • Investment ISAs
  • SIPPs

The same robo advisor platform may also offer all the tax benefits that can be accessed within Junior ISAs or Lifetime ISAs. However, these accounts won’t be privy to the best robo advisor product as they are not investment products.

How Does a Robo Advisor Work?

Robo advisors in the UK use an algorithm to choose your investment portfolio based on things like:

  • Your risk profile
  • Your current investment goals
  • Your projected investment term

Because you won’t do any trading on your own, and you won’t have a human advisor doing any trading on your behalf, your portfolio usually comes in the form of different funds rather than individual stocks and bonds.

Most investment platforms use a theory called the Modern Portfolio Theory (MPT), a Nobel Prize winning economic theory, to create portfolios that the survey then assigns to each customer based on the three data points above (risk profile, financial goals, term). MPT argues that you can create an “efficient frontier” of portfolios optimised to generate the best available growth for each level of risk. Basically, it says that you shouldn’t consider risk and return individually but instead evaluate them against the whole portfolio for optimal performance. The theory operates on the presumption that all investors are risk-averse by nature and would prefer a portfolio that offers low risk with a reasonable return, and investors only want more risk if the growth matches it.

What does it mean in terms of a robo advisor’s portfolio offering? It means a significant focus on an instrument known as an index-based exchange-traded fund (or index-based ETF). However some UK robo advisors will also use mutual funds as part of their portfolio construction.

Who Do Robo Advisors in the UK Help?

In the past, access to trading was largely limited to those who either had the knowledge to go it alone or those who could afford to pay a financial advisor service to work on their behalf. It was also limited to people whose initial investment amount was large enough to meet a high quota — not the everyday saver or new investors getting started with their portfolio.

Robo Advice turns existing financial services products on their head by combining a low management fee with a low barrier to entry.

Robo advice can help manage your tax-deferred investments, like your stocks and shares ISA and your SIPP, and then a general investment account once you max out your annual contributions.

How Much Does A Robo Advisor Cost?

Whilst the cost of a UK robo adviser is significantly less than what you would expect to pay a human financial adviser, there is a management fee involved which can vary wildly from one investment service to another.

Typically there are two major components that you need to worry about, the portfolio management fees which is usually a percentage of your annual investment and typically costs anywhere between 0.25% to 0.5% and the Fund Fees which can be anywhere between 0.05% and 0.65% of your annual investment.

Some robo advisers will use a sliding scale fee structure based on your annual investment amount so it is worth checking which bracket you would fall into before attempting to calculate your costs. This sliding scale can also make it worth changing from one robo adviser to another once you have grown your money so check there are no withdrawal fees associated with the robo adviser you choose.

Which is the Cheapest Robo Advisor in the UK?

Whilst low fees shouldn’t be your only consideration when choosing the best robo advisor for you, it is a factor and I have therefore conducted a price comparison of the major UK robo advisors on the market today so you can see which is the cheapest robo adviser. There are many variables to consider when it comes to how much money robo advice will cost, such as the minimum investment amount offered by the robo advisor, which account is best suited to your needs, and the robo advice services that each UK robo advisor offers.

Many UK robo advisors have hidden fees, such as deposit and withdrawal fees, set-up fees, trading fees, transaction fees, and exit fees associated with the robo advice they provide. However, Nutmeg scrapped all these extra charges and at just 0.25% for a fixed allocation portfolio beyond £100k and 0.19% fund fees I felt that these low fees offered exceptional value for the level of investment service Nutmeg provides and therefore they have taken position as my recommendation for cheapest robo advisor available.

Should You Use a Robo Advisor?

A common misconception is that robo advice generally isn’t for clients interested in investing in wealth accounts or high-net worth clients. Early versions of the consumer-facing product saw that not only were the premiums not optimised for high-value retail investor accounts, but there was no real oversight from humans, which some consider essential.

What’s more, robo-advice tended to be inflexible; you couldn’t maximise your investment nor will you have any sort of detailed or personalised financial advice. This image and trend is changing, however, and while some robo advisers do fit the above description and use it as their value proposition, an increasing number of investment platforms are integrating new (traditional) services to supplement their computers’ robo advice. In other words, you’re not only more likely to now see clients with £100,000+ using robo advisors for at least part of their portfolio, but financial managers are also enlisting them on their clients’ behalf.

Is There Anyone Who Won’t Benefit From a Robo Advisor?

At present, robo advisers won’t directly benefit those who aren’t transferring money into their accounts regularly. Although they are often one of the cheapest methods for getting a foothold in the markets, the management fee will likely eat up much of the return in very small accounts where the investor only adds £10 at a time.

These customers can use the product, but they might be better suited with cash savings options that feature no-to-low fees until they build up a cash nest egg for investment. Investing with a robo advisor is a long term proposition and therefore customers looking for short term gains on their money would be better off placing their money in a high interest, easy access, cash savings account.

Are Robo Advisors Suitable for Wealth Management?

Many of the best robo advisors both in the UK and in the global industry generally tout themselves as being perfect for small investors. Their low management fee combined with low investment thresholds do cater to that group.

But are robo advisors also suitable for investors with £200,000 or more to transfer into an account or is traditional wealth management still a better option? While some robo advisers exist to cater to small investors, there are products available for investors with accounts worth six-figures or more. What’s more, industry experts say that robo advice products are becoming more popular across wealth levels, with many high-net worth individuals choosing to split their money between wealth managers and computer advisors. The practice is more popular among Asian and Latin American investors than North American and Europeans, who are slightly more cautious.

The sector’s willingness to expand its core market is important not only for gaining today’s wealth customers but also because as the global Baby Boomer generation begins to pass away in greater numbers, younger generations will inherit £1tn in wealth.

It’s important for robo advisers to be ready for a generation of investors who are already comfortable with using digital services rather than traditional wealth managers, but who don’t yet have a high net-worth.

Can You Trust a Robo Advisor?

“Can we trust the robots?” It’s a good question. After all, they are asking for your money, and investing cash automatically carries some investment risk. While the robot’s won’t make emotional decisions, you are at the mercy of an algorithm you can’t see (nor would you necessarily understand). The answer is “yes, you can trust the robots.”

Why? In part because you can trust the theory powering the average robo advisor. Many are modelled based on Nobel Prize-winning economic theory, which makes them both smart and cutting-edge. The use of an algorithm to make an investment strategy also means that there won’t be any sort of emotional decision making. Your portfolio won’t suffer because someone is having a bad day or because they hit the wrong button.

Further evidence of the value of robo advice comes from the fact that they are increasingly used as a “white label” practice. Traditional advisors are increasingly using them for client work to streamline the asset selection investment process and free up their time for more valuable work. So, these products aren’t just for those locked out of the market: they have value for industry professionals, too.

Finally, any trustworthy robo adviser will have authorisation from the Financial Conduct Authority (FCA) and participate in the Financial Services Compensation Scheme (FSCS). Thus, if anything goes awry, these programs mean your investments and money are protected up to £50,000 (Financial Conduct Authority) and £85 000 (FSCS).

Look for approval from both bodies before you provide your details to any start-up.

Can Robo Advisors Make You Money?

Whilst robo advisers have caused much scepticism among professionals as to their effectiveness when compared to traditional investment methods, they rely heavily on complex algorithms which are based on sophisticated economic research and therefore represent the best economic models of investing.

Competition within the robo advice market has led to low fees, which in turn means an increase in investor returns. Of course there are variables and any fees can erode away at small investment amounts, however, they can effectively make you money in line with your risk appetite.

Does the Robo Advisor Hold onto My Money?

The answer is probably not, particularly among start-ups. Many of the independent robo advisers aren’t investment banks. They offer software and serve solely as a platform offering robo advice. Your money will likely be held by a custodial broker.

It’s worth doing research on the custodial broker or partner bank before opening an investing account with the best robo advisor for you and investigating where your money will be held so you can ensure the safety of your money should the robo adviser go bust.

What are the Benefits of Choosing a Robo Advisor?

Robo advice comes with a long list of available benefits, which is no surprise given their stratospheric success.

Cost Effective with Good Returns

The biggest benefit offered is their premise: they offer quality investment tools at low cost, which is a proposition that’s difficult to execute. As mentioned above, robo advisors accomplish this by using a MPT theory and relying heavily on index-based ETFs, which provide low-cost performance. Although this benefit often speaks to new investors, it’s a helpful tool for those with mature wealth who want to further diversify their portfolios.

A robo adviser is a low-maintenance place to park a portion of your money and watch it grow and enjoy the cost savings compared to typical asset management fees.

Easy to Use

What attracts everyday savers who don’t have a wealth of investing experience is how easy they are to use. All you have to do is open an account which is usually very simple. Though, you can expect to provide a list of essential details to ensure compliance with HMRC and international law. From there, you can link your bank account and set up a direct debit to invest as much money as often as you like. Additionally, robo-investors allow you to choose a portfolio based on your financial goals and your preferred investment risk tolerance, which means there’s no research involved.

Quality providers also provide enough easy-to-digest information on their websites to educate all their customers on what’s happening behind the scenes. Their resources can be a good starting point for further investments and diversification as your cash grows.

Automated Rebalancing

Once you’re set up, you can largely forget about it. Though, it is good to check in on your investment and update your risk tolerance and goal preference as required. The best robo advisors even automate the rebalancing process, which ensures that your investments and mix remain constant even as markets change.

Low-to-No Minimum Balance

Another benefit is the ability to keep a low minimum balance both as you start out and if you need to withdraw your cash. You won’t lose access to your account even if it sits empty. Not all accounts offer this feature. Start-ups are more likely to allow this compared to legacy banks.

Are There Any Disadvantages?

While the list of benefits is long and attractive, there are some drawbacks associated with robo advisors that are worth considering. The biggest of these is the lack of personalisation (at least so far) in the robo advice they offer. These providers shuttle everyone into one of a handful of portfolios based on some general questions. While this approach has some merit (and there’s sound science behind it), it’s important to remember that there’s more to your financial goals than a basic risk profile.

Some robo advisors are increasingly offering greater personalisation to address this. You can also switch your risk levels and change your investment goals among some providers. A second disadvantage is that you won’t get any financial advice when there’s a big market swing. For example, when the potential of a new pandemic sent the markets into free fall in early 2020, investors were on the phone with their money managers wondering what to do next.

If your plan is strictly run by a computer, you won’t have anyone to tell you not to sell up — or what to do next. You’ll need to make the decision for yourself and hope it’s the right one. Finally, it’s important to remember that while some robo advisors offer lower fees than financial advisors, not all do.

There are many products and advisors out there. Avoid following the assumption that even the best robo advisor will save you money in every instance because that’s not true.

The bottom line is there are many things the best robo advisors have the potential to do better or cheaper than a human.

The key is to remember that they have the potential: not every product or platform will live up to it.

How Much Will You Make Compared to a DIY Approach?

There’s no way to say just how much you’ll earn via the best robo advisor compared to a mutual fund or buying stocks and bonds individually. Every part of the robo advice process is unique, and of course, the stock market changes in ways that are not always predictable.

It’s worth noting that you won’t necessarily earn as great a return with the best robo advisor compared to a DIY approach. The portfolio building process combined with the prevalent use of ETFs means that your portfolio will match risk with reward. When might you earn more by choosing to build your own portfolio? You’re likely to see better returns when:

  • You already have investment experience and knowledge of the stock market
  • You have the time to manage your own investments
  • You have time to seek out and manage low fee investment platforms

But if you’re a new investor, have little time to dedicate, or just want to watch your money (hopefully) grow steadily over time at a rate that should beat a savings account, then you are more likely to prevail with a robo advisor.

Which Robo Investor Has The Best Returns?

Knowing the historical performance of the robo advisor you are considering is of course important before making your choice, however, historical returns cannot guarantee future performance so I would urge investors to consider other factors such as minimum investment, management fees and the products on offer before making their selection.

The other thing to consider is that investing is a long game and generally investors are encouraged to leave their investments for a minimum of five years in order to see any real gains on the original amount of money. This is due to the ebbs and flows of the stock market, with some years proving particularly volatile.

Because many of the robo advisors have entered the market within the last five years, it makes it very difficult to quantify which of the current offerings is performing best, however, my research has shown that Wealthify are one of the top performing robo advisors on the market with a 25.5% return on their adventurous plan between March 2016 and March 2019. This is a great result over just three years. Of course when measuring returns it is important to factor in fees as high fees can seriously erode any potential gains.

Are All Robo Advisors the Same?

No, each UK robo advisor operates according to its own proprietary software as well as its own platform rules. Robo advisors may assess different fees, offer unique funds, and may provide a different array of services.

Is a Robo Advisor Worth It?

The market for robo advisors has grown substantially over the course of recent years, largely as they provide access to the financial markets to new investors and people with a small investment pot. They also offer a low cost alternative to traditional financial advice and adherence to the latest research for investment performance means they are often a high performing option. That being said, robo advisors are not in any way personalised, and therefore cannot take your unique circumstances into consideration when it comes to investing. However, if you are after a simple, time and cost efficient means to investing then robo advice is an excellent choice.

How to Choose a Robo Advisor

Because robo advisors largely offer the same value propositions and use the same technology, choosing between them comes down to the smaller details, like pricing and investment service offering. Some of the things to consider include:

  • Management fees
  • Investment options
  • Services
  • Access to human advisors
  • Types of accounts
  • Minimum lump sum investment

The same rule applies to robo advisors as it does to any other financial account: the management fees don’t tell the whole story. It’s helpful to sit down and determine what’s most important to you. Are you looking for a place to dip your toe into the water? Or are you looking for somewhere to start growing your wealth in earnest? Robo advisors can offer both, but you’ll need to assess each platform’s offerings against your own financial goals to understand whether they’ll work for you.

What Happens If a Robo Advisor Goes Out of Business?

A robo advisor effectively acts as an intermediary between you, the customer, and the custodian which is where your money is actually held. This means that in the event that your robo advisor goes bust, your money will still be safely held with the custodian and will remain untouched. It is then up to the customer as to what you would like to do with your money. As well as this, most robo advisors will be part of the Financial Services Compensation Scheme (FSCS), protecting your assets to the value of £85,000 should your robo advisor go out of business.

Common questions about robo-advisors

Are robo-advisors good for beginners?

Yes, robo advisors are good for beginners because they automate the allocation of stocks, shares and funds usually in an exchange traded fund (ETF). Some robo advisors like Wombat offer themed ETFs where beginners who are new to investing can choose themes like ‘The Battery Room’ and ‘The Techie’, amongst others.

Do Robo Advisors beat the market?

It is very unlikely for a robo advisor (or even a human financial advisor) to beat the market on a long term basis, however, the index fund investing strategy will often match the market and the cost to you will be less than if you had engaged the financial services of a financial advisor. With the additional cost savings this means all things being equal a robo advisor can beat active management returns.

Are Robo Advisors any good?

In short yes! Robo advisors offer entry level investors a great starting point and construct portfolios that are just as good (sometimes better) than human financial advisors at a significantly lower cost. The cost savings the translate into more of your being invested which improves your returns. For more information, take a look at our robo advisors vs financial advisors guide.

Are Robo Advisors safe?

There is always a certain amount of risk involved when investing, and you must be prepared to get back less than your original investment. However, as an investment vehicle, robo advisors are regulated by the Financial Conduct Authority and many also offer protection from the FSCS.

Is there human support available with Robo advice?

Yes, robo advisors always provide their account holders with support, however, this is usually not in the form of financial advice. Whilst there are a small number that can provide you access to a financial advisor, on the whole the level of support offered is in relation to account queries.

Who would be better investing with a human advisor?

Investors with complex financial situations, including tax planning, real estate, and inheritance planning may benefit from the more personalised approach that a financial planner can provide. I can connect you with a Independent Financial Advisor if you feel you need the extra support.

Robo Advisor FAQs

Can Robo advisors be used for Crypto?

Yes, some robo advisors can be used for crypto. Crypto Robo advisors like Coinpanion allow automated investments in different portfolios including cryptocurrencies, DeFi, metaverse and NFTs.

Can I invest in a stocks and shares ISA with a Robo Advisor?

Yes, you can invest in a stocks and shares ISA with a robo advisor. Nutmeg for example lets you invest into a stocks and shares ISA account which means you can utilise the tax benefits as well as their low fees.
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