At the end of last year I wrote a blog about my experience with robo-investing platform Wealthify. Last week marked the end of my time with them and I thought a little update would be helpful for people looking at this option.
I look at the fund options available, the return of performance and the cost of their service.
As a reminder, I signed up to Wealthify in February 2023 with a deal advertised on the Money Saving Expert website. Basically you invested £50 and if you left it there for a year you got a £50 bonus, which you could then withdraw along with any gains or loss the account had in that time.
Last week my account was credited with the £50 bonus and I decided to take out the entire pot, which was £103. Well actually the pot was £104 but apparently it cost me £1 for the pleasure of getting my money back.
I invested in their most risky plan called 'Adventurous', not because the name was so aligned to the brand here, but because of the £50 bonus I was happy taking on that level of risk for the potential of a higher return.
This is what it was made up of:
13% of the fund is bonds and cash, not what I would particularly put as risky. You will also see there is a strangely low weighting of US exposure in this fund, although there may be more hidden in the 'Global' portion of the regional mix which we don't have view to.
Over the year I held in this fund it returned 9.6%, which isn't bad at all. If someone offered me that as a guarantee before I started I would definitely take it.
Let's however compare that to the other funds I hold over on Vanguard for the same time period:
S&P 500 = 20.46%
US Equity = 14.8%
FTSE Global All Cap = 9.8%
Retirement 2040 = 6.79%
So the majority of funds either equalled it or vastly over performed, with only one, my most conservative, failing behind.
One bit that I always knew but still frustrated me was the fees associated with the account. In total 0.77% which if you compare to Vanguards which for my funds range from 0.22% to 0.37%, this is a hefty increase. Now you'll see with the small amount invested in Wealthify it was a small amount of money, but if you were investing large sums these would really add up.
There is a great video on how account fees over time can effect return, check it out here. Best bit starts from 2 mins 47 sec if you are short on time!
The final piece was me withdrawing the money. All fairly simple on their website with only a few clicks, but it will take 10 working days. This just seems like a long time for a relatively easy process. I know a lot of platforms take a long time so I guess this is no different to others, but doesn't make it any less appealing.
Summary:
So after a year with Wealthify I have learned that their high fees don't necessarily make for better returns, and their funds are not as aggressive or invested in areas which potentially get them a higher return. There are also a lot less options of what you can invest in.
I certainly wouldn't be swapping from Vanguard for them, but if there is an offer in the future for this sort of thing I would have a think of getting involved as it's an easy £50 in your back pocket.
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