Skip to content Skip to footer

How to choose the best robo-advisor platform in the UK

13–16 minutes to read

The best robo-advisor can be hard to find. Fundamentally, robo-advisor platforms can help get your investing journey started quickly and easily. In fact, even experienced investors looking to simplify or automate their finances can also benefit. However, with a wealth of platforms available on the market, how do you know which is the best robo-advisor for you?

In this article, we’ll go through what a robo-advisor platform is, how it can benefit you and compare perhaps the three best-known robo-advisors out there; Wealthify, Moneyfarm and Nutmeg.

Heads up – We aim to produce honest and accurate content, however, we are not financial advisors. If you need financial advice, Unbiased can connect you with a suitable professional for free. Some of our links may earn us a small commission to help us run the site.

What is a robo-advisor platform?

Robo-advisors are investing services that provide automated financial planning with little to no human supervision.

Typically, a robo-advisor will collect information about your financial situation and goals, and then use this data to automatically invest your money.

Essentially, it will automatically balance your portfolio according to your appetite for risk. So you get to focus your time on what really enjoy.

What are the benefits of a robo-advisor?

The main benefits of a robo-advisor platform versus a traditional DIY investment platform are:

  • Simplicity – robo-advisors help you choose how to invest your cash.
  • Safety – recommended investments are based on your risk profile. If you are cautious, then your money won’t be invested in high-risk stocks.
  • Easy to use – robo-advisors typically have slick websites and apps that take away the complexity usually associated with investing.
  • Time-saving – you don’t have to be a financial analyst. Robo-advisors do all the heavy lifting and research, meaning you can get on with your daily life.

SIGN UP - IT'S FREE!

Get your FREE financial guides, plus useful updates and exclusives to grow your personal wealth.

Investing for Beginners

Robo-advisors can really if you are new to investing by making the decisions for you. Plus, if you lack confidence or are simply time-poor, a robo-advisor platform can get you started easily and quickly, holding your hand every step of the way.

If you want to learn more about investing, then check out our free Investing for Beginners guide. It has everything you need to help you get started. Crucially, we cover the steps you should do before you even start. Best of all, it’s totally free!

Investing for Beginners – how to bankroll your financial future.

Is a robo-advisor right for me?

We’ve listed some of the main benefits and drawbacks of robo-advisor platforms below. This should help you determine if a robo-advisor is a good choice of investment platform for you.

Good for you if:

  • You need help with what to invest in.
  • Are looking to automate your investments.
  • Aren’t interesting in picking individual investments.
  • Hope to improve poor returns on your cash vs traditional savings accounts.
  • Can invest your cash for five years +.

Not good for you if:

  • You need to access the money quickly when required.
  • Are looking to buy a house in the next few years (instead, check out the Lifetime ISA).
  • You have credit card debt to pay off (check out ‘the quickest way to pay off debt’).
  • You don’t like any risk at all (for a shot at any decent returns, you have to be comfortable with at least some level of risk, even if you limit this).

If any of the above describes you, please check out our beginner’s guide to investing. It covers everything you should consider doing before investing your hard-earned cash.

Are robo-advisors any good?

Because they make the potentially daunting decisions for you, they are well-suited to new investors. Essentially, you can kick back and let the robo-advisor decide on your investment strategy and portfolio allocation.

Plus, they also work well for those who are time-poor and looking to offload their investing tasks and decisions.

And then there’s the cost. Before robo-advisor platforms existed, investors may have chosen an Independent Financial Advisor to manage their investments. These often carry hefty ‘management’ fees and would typically be more expensive (depending on lots of personal factors).

What account should I opt for?

Most robo-advisors offer the following types of accounts:

Typically, most investors looking to shelter any gains from tax will choose a Stocks and Shares ISA account. Remember, you can only contribute to one Stocks and Shares ISA per year. So, if you already have one then you’ll need to transfer your account to your chosen provider.

On the other hand, you can open as many General Investment Accounts as you like. However, to keep managing your money easy in terms of tax, you may want to limit these and use ISAs first.

Need some help? Check out our Beginners Guide to Investing – how to bankroll your financial freedom.

What investment options do I have?

Most providers offer a range of investments. Typically, these are a bundle of different funds that provide you with diversification.

When you sign up, you are taken through a short questionnaire to understand your goals and appetite for risk. At the end, you are offered an appropriate short-list of investments based on your answers.

In addition, robo-advisors usually offer some options around ethical investments, too.

Once you have chosen your investment portfolio, the platform will take care of the ongoing management. Essentially, this means they will buy and sell stocks and funds to balance your portfolio. The idea is that you can sit back and relax while your fund manager does the hard work for you.

Importantly, if you do wish to change your investments, then you can log into the website or app and shift your investments into a different fund as you see fit.

Financial Fitness Guide - get part one FREE!

Subscribe now and get your FREE part one of the Financial Fitness Programme, designed to grow your personal wealth, reduce your money worries and give you more time.

What fees will I pay?

Each provider charges slightly different fees, which are typically comprised of three elements:

  • Platform fee – the provider’s charge to use their service.
  • Average investment cost/fund fees – the cost of the underlying funds in your managed portfolio.
  • Market spread – the difference between what somebody would like to sell an asset for and what somebody is prepared to pay for it.

The table below shows the fees charged on a £10,000 portfolio for three of the most popular robo-advisors.

Each platform has different charging tiers. Typically, as you invest more, the fees reduce. Wealthify and InvestEngine have a fixed platform fee regardless of portfolio size. And Nutmeg requires portfolios of over £100,000 before you’ll benefit from a drop in fees. In contrast, Moneyfarm’s fees start to drop in incremental steps after £10,000.

Moneyfarm Nutmeg Wealthify InvestEngine
Platform fee 0.75% 0.75% 0.60% 0.25%
Avg. investment cost 0.20% 0.14% 0.16% 0.15%
Market spread 0.09% 0.08% 0.00% 0.07%
Total 1.04% 0.97% 0.76% 0.47%

For this comparison, we have used the Nutmeg Smart Alpha and The InvestEngine Managed Growth portfolio. This is the cheapest actively managed portfolio available from these providers.

Moneyfarm full review.

Nutmeg full review.

Wealthify full review.

InvestEngine full review.

Robo-advisor investment performance

Each platform publishes the performance for each investment portfolio. You can find your chosen funds performance on the provider’s website or within the app. The challenge, however, is that each platform offers a different portfolio range, which makes comparisons difficult.

Both Moneyfarm and Nutmeg publish performance results that have outperformed their benchmark in nearly all but the most cautious portfolios. By contrast, Wealthify provides some impressive results but crucially, offers no benchmark.

InvestEngine hasn’t published its investment portfolio’s performance yet.

I have compared the most ‘adventurous’ (think higher-risk) portfolios from the three providers below:

Moneyfarm Nutmeg Wealthify
Last 12 months performance 20.2% 26% 18%
2020 6.1% 7.1% 0.48%
2019 19.8% 18.7% 3.53%
2018 -5.9% -9.9% 4.88%

Comparison dates September 2021. Highest risk portfolios used: Nutmeg Fully Managed 10, Moneyfarm portfolio 7, Wealthify Adventurous.

Remember, past performance does not represent future performance.

Robo-advisor reviews

Moneyfarm review - Trustpilot

Overall, people appear to like using robo-advisor platforms. In fact, all of the platforms we have reviewed received favourable reviews on Trustpilot and the app stores.

Indeed, compared to other financial services companies, the robo-advisors can be confident that they are doing something right given how happy their customers are.

The table below summaries their respective scores:

Moneyfarm Nutmeg Wealthify InvestEngine*
Trustpilot 4.6 4.3 4.6 4.7
Apple App Store 4.7 4.8 4.5 4.8
Google Play Store 4.7 4.7 4.0 4.5

*InvestEngine has very few reviews compared to the other providers.

We’ve written reviews on all the platforms here:

FREE Financial Independence Guide!

Subscribe now and get your FREE Financial Independence Guide. Includes everything you needed to know about building your financial freedom.

Is my money safe with a robo-advisor?

In short, yes your money is safe and protected. Fundamentally, all robo-advisors must be regulated by the Financial Conduct Authority (FCA). This means they follow a number of regulations aimed principally to protect investors and to ensure fair competition in the finance industry.

Furthermore, your assets are ring-fenced via a separate institution. This means that, even in the worst scenario of a robo-advisor becoming insolvent, your money and assets would still be safe.

In addition, investments are protected by the Financial Services Compensation Scheme (FSCS). As such, you are covered for investments up to £85,000.

Critically, though, you are NOT covered for investment losses, only if your platform provider runs into financial difficulties.

Robo-advisor vs a financial advisor

As we now know, a robo-advisor can help you invest your money quickly and easily. They can help you pick a suitable investment profile based on your goals and attitude to risk. Furthermore, they can manage it all for you.

Sounds great, right? So why would you ever need a financial advisor?

Well, a financial advisor can offer other important, more complex services:

  • How to plan effectively for the long term.
  • Choosing the right financial product.
  • Efficient tax-planning.
  • Planning your pension withdrawal strategy.

These are just a few things that a financial advisor can help with, in the broader context of your financial ambitions. There may be many more, depending on your financial situation.

Even for those that do want to plan their own finances, a financial advisor can also help check your plan to ensure you are not missing a key element. Crucially, a good financial advisor should be able to show you clearly how their services have saved you money.

A word to the wise

One word of caution. Financial advisors like to take assets under management. This means that they will manage your investments and pensions for an annual fee. Usually, this is an annual percentage charge that is deducted from your assets. Any percentage of fees taken from your assets each year soon adds up. Before signing into anything, run the numbers to check how much you will be paying.

An alternative to this approach is to find a financial advisor that can look at your investments and pensions for a one-off fee. That way they are not financially incentivised by the recommendations they give you. Whilst this may appear expensive, you won’t need to do this every year. You can find a financial advisor near you with Unbiased.

Which Robo-advisor is right for me?

There are a few main differences that may help investors choose between these very closely matched providers.

First up, is to consider how much you plan to invest. This is because each platform has a minimum investment, as you can see from the table below. Handily, Wealthify customers can open an account with just £1, whereas Nutmeg and Moneyfarm require a minimum of £500. Ouch. Interestingly, Moneyfarm dropped the minimum investment from £5,000 to just £500 in September 2021.

Moneyfarm Nutmeg Wealthify InvestEngine
Minimum Investment

£500

£500

(£100 for LISA)

£1 £100

If you are just starting out, or don’t feel comfortable investing £500, then Moneyfarm or Nutmeg may not be for you. If you feel this way, it’s best to start with smaller amounts and gradually get used to investing.

You can invest from as little as £1 with Wealthify so this may be the best platform to get you started. You can read our full Wealthify Review here (plus there is a £25 bonus for opening an account).

If you can stretch to £100, then InvestEngine offers a £50 sign up bonus if you use this link.

However, if you are more experienced, then choosing between providers may be tougher. All of them offer help in choosing and managing a portfolio based on your personal profile and attitude to risk.

Interestingly, one key difference is that Moneyfarm can offer you a real person to speak to. This service is built into the platform cost. For some, this is what they really need to gain confidence; a little personal, human assistance.

Nutmeg, by contrast, is a little cheaper for portfolios £10,000 and under. Additionally, its highest risk portfolio has outperformed Moneyfarm’s. Furthermore, we have secured a deal that gives you the first six months of platform fees for free with Nutmeg using this link.

Both Nutmeg and Moneyfarm are competent platforms, so choosing between the two is like splitting hairs. Remember, neither platform ties you in. So you can always try out a platform and change if it is not for you.

How to open a robo-advisor account

Handily, you can open your robo-advisor account in under 15 minutes. You will need some proof of ID such as a passport or driving licence. Then there will be a short questionnaire.

Here are the links to get you started and grab some of those deals that the robo-advisors are offering:

Once your account is open, you will get periodic reviews of your portfolio and an annual assessment to ensure your risk profile still matches your original answers.

The rest should be easy. Simply choose how much you want to invest each month, then sit back and relax.

Best robo-advisor platform - final thoughts

Essentially, a robo-advisor provides hands-free investing decisions, management and strategy. In fact, you can be up and running in minutes with your investments on autopilot. So, if you have a busy life or if you have no interest in learning about investing, then a robo-advisor can help.

Fundamentally, which robo-advisor is best for you will primarily depend on how much you want to invest. If you have under £500 to get started, then perhaps check out Wealthify.

But, if you want to invest more than £500 and would like someone to talk to about your investments, then check out Moneyfarm. And if you are focused purely on returns, then based on the comparison above, Nutmeg wins by a hair.

Critically, robo-advisors do not provide financial advice. This is an important distinction. You can buy financial advice from Moneyfarm and Nutmeg, but it is strictly limited to offering its own products. So if you want an independent financial advisor, then have a look at Unbiased.

If you want to improve your personal finances or learn more about investing, come join our free UK Personal Finance Club over on Facebook. It’s a safe community of like-minded people all trying to improve their finances. I’d love to see you there.

Here’s to Financial Fitness

EatSleepMoney.co.uk does not offer financial advice and is intended for reference/information only. Remember, you should always carry out your own research and/or take specific professional advice before choosing any financial products or services or undertaking any business or financial venture. If you need financial advice Unbiased can connect you with a suitable professional for free. Investments may go up as well as down and you may get back less than you put in.