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The robo series – Wealthsimple

The latest in our robo review series is Wealthsimple, a Canadian online wealth manager (aka known as a robo-adviser).  It first launched in Canada in 2014 and came to the UK three years later in September 2017.

The margins in automated investing are thin so robo-advisers need a minimum amount of assets under management to be profitable and sustainable, the baseline being around the £1bn mark. Wealthsimple has operations in the US, Canada and the UK with combined assets of £3.5bn so it ticks that box nicely.

Unboxing

The website is attractive, clean and unfussy — a lot of thought has been put into conveying information in the simplest way possible. Before you login and create an account, you can find out about the company, its services and how they’re priced. You can even access its learning resources and videos before creating an account — a really nice touch.

Signing up is easy. It took a few minutes to enter my information and be verified. Wealthsimple asks a few questions about investing objectives and attitude to risk. It’s fair to say that the questions are pretty basic compared to other robos — no doubt Wealthsimple assumes that people who are actively looking for investment providers have savings and are debt-free, so only basic warnings about debt and emergency savings are given.

It could probably do more to reinforce the message, but that’s always tricky and has the potential to irritate customers (it’s a bit liking going to the hairdressers when you know you need a haircut and being turned away…)

Once it has ascertained your risk and objectives, Wealthsimple suggests a portfolio. Investors can then open a product of their choice and transfer money through a one-off lumpsum or regular standing order or direct debit. As well as a bog-standard investment account, investors can open ISAs, junior ISAs and pensions.  The range of tax wrappers is impressive — many robos do not provide pensions as they’re expensive to manage and run, but offering junior ISAs is rare indeed.

There is no minimum investment for the standard portfolios, but its socially responsible portfolios have a minimum lumpsum of £5,000. Investors can invest through a debit card, bank transfer, standing order etc. All very flexible and easy to use.

Despite having indicated that I was a huge risk-taker and that I was investing for the long term, the suggested portfolio was made up of 70% equity and 30% fixed income. The robo is transparent about its underlying investments and it lists the funds in each portfolio, but I found the actual list of investments underwhelming — there was a strong bias towards US and UK investments and only small exposure to other geographical sectors — so not as diversified as I would have liked it to have been. On the upside, there are clear and easy-to-understand projections to show what you might make over the life of the investment with any given investment portfolio.

What you get

There are three investment plans to choose from: Basic, Black and Generation, which takes account of the fact that investors with larger portfolios will want a more personalised service. The Basic account is for investors with up to £100k. It charges 0.7% as well as fund charges of 0.2%. Investors can also access investment advice if needed and new clients get a session with an investment adviser. A day after creating my account, I got an email and text message from Tom asking me to get in touch to schedule a time to discuss my investment plan.

If you invest more than £100k, the Black service kicks in and the fee drops to 0.5% plus the cost of the underlying investment charges of circa 0.2%. It also provides telephone and email access to a team of advisers.

Last but not least, the Generation service is for investors with more than £500k; the fee is the same as the Black fee, but investors get a dedicated investment adviser on top of the standard Black service.

In summary

Wealthsimple is a nice and clean website and app. It’s intuitive, and easy to use and navigate. Charts are nicely animated so that even complex charts and concepts are easy to understand. While it might not be the cheapest robo in the market (middle of the road on price), it makes up for it with its product range, and portfolios and fantastic investor resources.

A lot of thought has gone into its educational and learning resources, which are excellent. Its Magazine, Investing Master Class video and Personal Finance 101 series are engaging and informative with lots of tips, guidance and include stories and money diaries by real people to inspire investors.

Overall, a nice little robo.

Click here for a list of robos and here to run the robo calculator to find the right one for you.


 

2020-10-02T11:45:53+01:00

About the Author:

Bella has 20 years’ experience in the research and analysis of the investment industry. She set up Fundscape (comparetheplatform's owner) in 2010. Before Fundscape, she worked for Thomson Reuters as Global Head of Research and Publications (Lipper) and was the author of numerous publications and reports. Bella has a master’s degree in International Business and is fluent in four languages. She is particularly fussy about grammar and punctuation, and loves going to the theatre, disco dancing and pub quizzes. @bella_caridade @fundscapeuk

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