Robo-Advisors 7 – evestor, Wealthify, NetWealth and Wealthdunk

Robo-advisors 7

Today’s post is our seventh look at robo-advisors and ready-made portfolios. The good news is that it’s a bit more interesting this time.

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This post is part of a series of articles on Robo Advisors and Ready-Made Portfolios. You can find links to all of the articles – plus a live spreadsheet summarising our findings – here.

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evestor

evestor

evestor 3

We begin with evestor.

  • The big news about  them is that they only charge 0.48% across the board.
  • There’s no up front fee, even if you want the optional financial advice.1

evestor 7

evestor 2

That makes them the cheapest true robo-advisor that we have yet seen.

  • They have a particular advantage over the rest with smaller portfolios (£250K and less).

evestor 5

Unfortunately, they compare themselves to a ridiculously expensive (2.56% pa) “traditional advisor”, but I suppose we can’t blame them too much for that.

evestor 6

The key point is that evestor are still more expensive than DIY portfolios of ETFs and index funds.

  • But they sneak under the 0.5% pa barrier, into the elite section of our summary table.

evestor 4

One of the founders also founded Moneysupermarket.

evestor 8

evestor use funds from Vanguard, Fidelity and Blackrock, and use Winterflood (part of Close Brothers) as a custodian.

So that’s not a bad start, is it?

Wealthify

Wealthify

From their above-the-fold photo, it would appear that Wealthify are targeting bearded hipsters with waistcoats.

  • Let’s see if there’s anything of interest for the rest of us.

Wealthify 2

They point out that people not in the global stock market are missing out.

  • This is fair enough, but the past five years have not been typical.
  • And the annual growth of 12.48% pa is unlikely to be repeated.

Wealthify 3

They offer the usual range of portfolios from cautious to adventurous, with three more in between.

  • They only offer ISAs, not SIPPs.
  • They don’t offer advice.
  • They choose your portfolio.
  • Like evestor, Wealthify also use Winterflood as a custodian.

Wealthify 4

And they provide one-year historical returns for each of them.

  • Except that these are not real returns, they are simulated based on the transactions they have carried out for actual customers.

Wealthify fees are 0.7% down to 0.5%, depending on which fee band you are in.

The bands are pretty low:

  • below £15K (total in the account) is 0.7% pa
  • below £50K is 0.6% pa
  • above £50K is 0.5% pa

You are also charged a “typical” 0.17% for the underlying funds.

  • So that’s 0.87% and 0.77% then down to 0.67% in reality.

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To get your fees down further, you can use a Circle.

  • This is effectively a bulk discount for groups of investors.
  • The individual accounts remain separate, but all the members receive a fee discount.

The discount works on the number of people in the Circle, not on the amount invested:

  • 2 people save 5% of their fees
  • 5 people save 10%
  • 25 people save 15%
  • 50 people save 20%

Note that this saving is only on the account fee, not on the fund fees.

This means that with a Circle of 50 (no mean feat) the fees become:

  • 0.73% below £15K
  • 0.65% below £50K
  • 0.57% above £50K
See also:  Plain English Global Multi-Asset Fund

This isn’t quite good enough to make it on to our leaderboard.

NetWealth

NetWealth

NetWealth 2

Netwealth has a similar offer to evestor  – you can choose your own initial path or talk to an advisor.

  • Once you get started, the portfolios are discretionary – NetWealth make the day-to-day investment decisions on your behalf.
  • They offer SIPPs and ISAs (and JISAs, if you’re into that sort of thing).
  • There is a £50K minimum investment.
  • Merryn Somerset-Webb is on the Advisory Board.

NetWealth 3

Netwealth’s fees are unfortunately too high.

  • As well as a platform fee, there is an annual fund charge of 0.25%

This means that total fees are as follows:

  • £50K to below £250K = 0.90%
  • £250K to below £500K = 0.75%
  • £500K+ = 0.60%

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In the same way that Wealthify offers Circles, NetWealth offers Networks.

  • As before, these are essentially group discounts.

NetWealth 4

Here the groups are limited to 8 people.

  • The fees are calculated on the total investment across all members, though the pots are kept separate.
  • This isn’t really fair to the group members who contribute more, but perhaps some people will see this as an advantage rather than a disadvantage.

NetWealth 5

This system ought to come into its own when you can get enough people together to stump up £500K between them.

  • I could certainly imagine setting up a group for my friends and family who have a bit less cash than me.

Unfortunately the fees are still too high.

  • Even at £500K, adding the 0.35% platform fee to the 0.25% fund fee gives us an annual charge of 0.6%.

NetWealth gbp-portfolios

NetWealth have some performance data for their portfolios, but there’s no benchmark on the chart.

  • They also provide a comparison to their peers, but I don’t recognise these comparators.

NetWealth gbp-portfolios vs peers

WealthDunk

Wealthdunk

Our final port of call today is WealthDunk.

  • This is not a Robo-Advisor, but a comparison site.
  • Wealthdunk also have a 30-page report  on UK Robo-Advisors that you can download

Here’s what the results look like (I searched for £100K invested by the lowest first year fee):

Wealthdunk 2
Wealthdunk 3

It’s clear that not all the robo-advisors are listed, and I have a suspicion that not every fee is included either.

This site has the potential to grow into a useful service.

  • But for now, stick with these articles, and with our own summary table.
Conclusions

It’s been an interesting day:

  1. evestor are the cheapest true robo-advisor service to date
  2. Wealthify’s Circles are interesting, though currently too expensive
  3. As are NetWealth’s Networks (family groups)
  4. And WealthDunk has the potential to become a useful resource
    • Though I would still recommend our own summary table instead at this point.

You can find the live summary table – and links to all of the review articles – here.

Until next time.

  1. I originally understood that advice was extra, but evestor got in touch to clarify: “Our financial advice – both the online advice process and our adviser appointments over the phone – come at no upfront or additional cost to the user. They are all covered by our annual fee.” []

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Robo-Advisors 7 – evestor, Wealthify, NetWealth and Wealthdunk

by Mike Rawson time to read: 3 min
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