True Potential Investments Review

Summary

Welcome to our True Potential Investments review, True Potential Investor (TPI) is a Robo-adviser investment platform which has headquarters based in Newcastle. They are authorised and regulated by the Financial Conduct Authority and are backed by the Financial Services Compensation Scheme (FSCS).

They offer actively managed portfolios with varying risk levels and have shown solid ROIs over the last four and a half years they’ve been in business.

Their product range currently includes a Stocks and Shares ISA, General Investment Account and a Personal Pension.

They have an informative and helpful customer service team who are available 8 am-8 pm Monday to Friday to answer any general questions; though they do not give financial advice. Their product is suitable for beginner investors who want to have minimal involvement in where their funds are invested. Those with a solid appetite to risk could see some great returns over longer periods of time.

Let’s take a look at their product in more detail.

Product Range

TPI offers UK investors to put their savings into a Stocks and Shares ISA, SIPP account or General Investment Accounts to help maximise returns compared with your standard Cash ISA.

Though classed as a Robo-advice service their portfolios are actively managed by over 9000 experts based in 200 locations worldwide and there are currently five different portfolios to choose from:

  • Defensive
  • Cautious
  • Balanced
  • Growth
  • Aggressive

Their asset allocation is as follows:

  • UK Equities
  • North American Equities
  • European (ex UK) Equities
  • Japanese Equities
  • Emerging Market Equities
  • Global Bonds
  • Global Inflation-Linked Bonds
  • Emerging Market Bonds
  • Global High Yield Bonds
  • UK Gilts
  • UK Corporate Bonds
  • Property
  • Commodities
  • Cash and Cash Equivalents

The percentages of what goes where depends on the type of portfolio you pick. You can find your portfolio’s specific asset allocation here. They also run through the strategic allocation and state the exact TPI fund your cash will be going in, in these key information documents.

Research Services and Tools

Because TPI is a fully managed Robo-advisor service there isn’t much in the way of research and analysis tools available on their website. This is because the service is ‘done for you’ and you don’t have the ability to select specific funds like you would with a regular self-directed service.

However, they do provide you with enough information about their portfolios so that you can make an informed decision. The documents section of their website has their key information documents for each portfolio where you can look at the asset allocation, historical performance and find out which TPI funds they’re specifically in and how they’re spread out.

They also feature a blog section, where they seem to be posting on average two or three times per week; it’s genuinely general news kind of stuff that will have an effect on the markets but they do post regular investment advice too – for example, on Valentines Day themed feature on personal savings and investments. The blog is also categorised by topic and they have a most popular featured section on the right which has basic investment-related blog posts to help beginner investors learn the ropes. Things such as helping your retirement goals and simple steps to saving more.

Finally, they also have a useful investment calculator tool to help you forecast how much your investment could be worth based on initial and monthly contributions. It’s a sliding scale tool and of course, is only a guide, but will give you a great idea of how much you should be locking away each month if you want to achieve your retirement and savings goals.

TPI Fees

TPI’s fees are slightly higher than others you see on the market, but that is likely due to their portfolios being actively managed. Technically speaking, with actively managed funds, you should see better returns, making their fees justifiable but it’s worth noting that it’s not always the case. They try to be as transparent as possible and have a slider at the top of their pricing section to help you calculate exactly how much will be trickling out of your investments per month in fees and charges.

Service Costs

Usually known as the Platform Fee, this is what TPI charge for running the platform and includes things such as the administration of buying and selling your investments, custodial fees (which some investment platforms charge extra for), running costs of their online platform and app and their live chat/phone support.

TPI currently charges 0.40%. It’s a flat fee and doesn’t change depending on your investment amount. You can find lower platform fees elsewhere but on small balances, it represents pretty reasonable value for money. Compared to other Robo-advisors we have reviewed this is fairly good for those with balances of less than £100,000. They’re cheaper than Wealthify, Moneybox, and Moneyfarm which helps to offset the slightly higher fund fees from them being actively managed funds.

Product Costs

Also known as the fund fees, these vary but TPI state that they’re typically around 0.76%. The product costs cover all your transaction fees and the ongoing charges for the funds within your portfolio. If you take a look at the key information document of each portfolio you can see the exact amount each portfolio charges. At the time of writing they’re as follows:

Defensive Cautious Balanced Growth Aggressive
0.72% 0.82% 0.83% 0.79% 0.74%

Other Fees

TPI don’t charge any setup fees, transfer fees or discretionary management fees. They also won’t charge for withdrawals.

Opening an Account with TPI

Setting up and account with TPI is easy and is designed to help you achieve your investment goals by way of a questionnaire. They start by asking how much you’d like to invest per month or outright and then move on to questions about your monthly income/expenditure and asks if you have an emergency fund to ensure you’re able to cover all your expenses should you lose employment.

You’ll then be asked questions about your investment experience before taking you through a 12 question assessment about your attitude towards risk. Some of the questions are kind of long-winded and you should allow yourself a good 15 minutes or more to get through them and fully understand them.

As TPI is authorised and regulated by the Financial Conduct Authority, they need to ensure that they are acting in your best interests. Because of this, they will ask if you have any personal circumstances that may inhibit your ability to make a solid investment choice such as illness, the security of your employment, your age or recent personal loss.

Once you’re all set with that TPI will select their most apt risk profile for you and show you their annual performance and growth since the portfolio was launched. It will also give you a detailed overview of the exact asset allocation. As long as you’re happy with everything, you can then review your investment and proceed to open your account.

This part is pretty standard and you’ll just need to fill in personal details and provide your National Insurance Number before proceeding to enter either your debit card details or direct debit information.

Overall, TPI was perhaps one of the longer processes we have come across, but we admire their attention to detail especially in the risk questionnaire.

Transferring Your Investments to TPI

Transferring your pension, ISA or GIAs to TPI is simple, easy and free of charge (although your current provider may charge you for leaving).

All you need to do is fill out the appropriate form which you can find on their website here and post it off to TPI who will do the rest for you.

We reached out to the team at TPI to get an idea of how long transfers would take to them as this didn’t seem to be posted on the website and they stated that it usually takes two to four weeks for other pensions and ISAs which is about on par with other online investment platforms.

TPI ISA Review

The Stocks and Shares ISA from TPI is a solid way to start some long-term savings in a tax-efficient way. Also, unlike some Robo-advice services their minimum amount to open an account is relatively low; just £50. Having said that, major players in the industry that offer bespoke self-directed services where you build your own portfolio can see you investing from as little as £25 when setting up a regular contribution through direct debit. There is also no mention of the product being a flexible ISA either.

You can manage and monitor your ISA online or through the very user-friendly app, which is actually one of the better apps we’ve seen for this type of service and they also have a nifty ‘impulse saving’ feature, which allows you to top-up your account at any time should you come into a little extra cash.

Their performance has also been pretty commendable, with losses minimised compared to some other funds during the 2018 slump and after roughly four and a half years in business, even their most cautious fund has had a cumulative interest rate of 17.59%, with their aggressive portfolio achieving 51.16%. Even their balanced option has made a collective interest of 35.33%, showing what long term investments can do to the size of your savings pot. It’s also a far better option than what many of the banks are dishing out right now.

At the time of writing, TPI doesn’t currently offer a Junior Stocks and Shares ISA so it would be nice to see that offered in the near future to encourage young people and their parents to get saving for things such as university or even a car or house deposit when they’re old enough.

TPI SIPP Review

A SIPP is an ideal tax-efficient way to save for your retirement and what’s even better is that you get a boost of 25% from the government. SIPPs are not just great for self-employed persons but people in regular employment too – think of it as a little something extra for the later years in life.

Because the TPI Personal Pension is invested in the same portfolios as the ISAs are, the facts and figures we discussed above apply here too meaning that investors have made a pretty penny based on TPI’s historical data so far.

Due to the nature of the funds that are invested in with the TPI SIPP (actively managed), you will find that the fund fees can creep up compared to other providers. Having said that, having an actively managed fund should show better results compared to a fund which is only checked by the team of professionals on a semi-regular basis.

Below, we decided to compare the TPI Balanced fund with other Robo-advisor pension products of a similar risk profile, here’s what we found:

  Moneyfarm Nutmeg TPI
2016 16.84% 5.9% 16.54%
2017 6.68% 7.1% 8.17%
2018 -3.99% -5.9% -2.95%
2019 12.11% 11.1% 9.43%
Jan 2016 – Jan 2020 31.64% 18.2% 31.19%

 

So, as you can see, they’re doing fairly well numbers-wise, though Moneyfarm’s and Nutmeg’s 2019 investment strategy seems to have performed better showing that there can still be pitfalls with using an actively managed service.

Overall, however, I would say that their Personal Pension shows strong potential and is ideal for someone who’s just thinking about starting out a pension fund of their own but doesn’t really know where to start when it comes to what exactly they should be investing in.

TPI Customer Service

The team at TPI are friendly, knowledgable and available Monday to Friday from 8 am – 8 pm via phone, email, or live chat. They even say that you’re welcome to visit them in their offices.

One thing we found particularly interesting was their live chat system, which actually showed you the advisor you were speaking with via video and even gave you the opportunity to video chat them too. This isn’t something I’ve seen before with any business, not just financial service, so it was a quirky surprise and it was nice to know you were talking to a real person.

Who Is TPI Suitable For?

TPI is great for beginner investors who want to get started investing at a relatively low cost and have everything done for then. It’s great for investors of all ages thanks to its diverse range of portfolios designed to wet everyone’s appetite for risk.

TPI is also ideal for those who have done some research into Robo-advisor investment platforms but are looking to invest in funds that are more actively managed by professionals in exchange for a slightly higher fund fee.

Peter Field - CFA

Peter Field CFA

Editor-in-Chief

Peter uses his many years of experience to oversee the reviews and guides published on InvestingReviews.co.uk

When not at his desk, Peter is training for his next triathlon and trying to be a great dad and husband.

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