If you want to save money for the long term, putting it into the stock market is likely to achieve better results than leaving it in the bank. In fact, a recent Barclays’ study shows that there isn’t a single decade since 1906 where the main UK stock market index has not given investors a better return than putting the same amount of money into a bank account.
On that note, below are the best investment apps in the UK. With them, you can start investing from your smartphone or computer.
MoneyBox is an investment platform that enables you to round up your everyday purchases to the nearest pound and set aside the spare change. The app enables its users to start long-term investing and also to save their cash.
With MoneyBox, the account opening is easy and fast, taking only a few minutes. And the good part: after opening an account, you will be able to start investing with as little as £1! MoneyBox makes investing further easy by offering three simple starting options for you to choose from depending on your risk tolerance level. These are:
Once you have opened your account, the rest is left to MoneyBox. The company will then be investing your money across thousands of global companies such as Netflix and Disney using simple tracker funds. With MoneyBox, indeed you will be investing like the best.
Wealthsimple is a Toronto-based company that launched its investment management platform in the UK on September 19, 2017. Wealth Simple uses a central investor committee which constructs various portfolios made up of ETFs, which are then assigned to customers depending on their risk profile. It is free for the first £5,000 and then charges a flat annual fee of 0.7% until £100,000 and 0.5% above that. Wealthsimple is available on desktop and mobile. You answer a few questions to assess your risk level and investment goals. Then, the Wealthsimple algorithm generates a portfolio with an asset mix that matches your risk level. However, users can tweak the portfolio if they want. Wealthsimple is easy to use. The app employs simple language which can be understood by new investors.
On Wealthsimple, you will have access to a personalized investing dashboard, including a graph showing current performance, with the ability to drill down into individual assets to see how well they are performing. In January 2018, Wealthsimple launched socially responsible investing portfolios. These allow their customers to invest in companies that make social responsibility a business priority, for example, cleantech innovation, fair labor standards, and low carbon emissions. The company claims these portfolios are the ‘first of their kind in the UK’.
Moneyfarm is another investment app operational in the UK. It requires no minimum capital. However, Moneyfarm recommends starting with £1500 “so that you have an optimally balanced portfolio”. When you sign up, Moneyfarm gives you a questionnaire to assess your investment goals, risk appetite, and financial history. Then, through a combination of algorithms and human wealth managers, it suggests a range of investment options in low-cost, liquid, exchange-traded funds (ETFs). Moneyfarm then manages the funds to ensure it stays on track as the market shifts.
Moneyfarm charges no management fees on portfolios below £10,000 or more than £1 million. It, however, charges between 0.4%-0.6% for portfolios between £10, 000 and £1 million. An average of 0.3% a year is charged as fund costs. Portfolios worth £10,001 to £100,000 are charged 0.6% a year, while investments worth £100,001 to £1 million pay 0.4% a year.
Moneyfarm is regulated by the Financial Conduct Authority and is covered by the Financial Services Compensation Scheme. This means that your first £50,000 of investments are protected if the startup fails.
Wealthify is an investment app available in the UK. It charges a management fee of 0.7–0.5% based on the value of your investments and fund charges of typically 0.17% per year. Wealthify has built a hybrid investment platform, combining humans and algorithms to offer investment portfolios with lower barriers to entry. CEO, Richard Theo, told Techworld: “We’re trying to democratize investing to make it accessible with a much lower starting point at £250 [Nutmeg starts at £500] and the whole simplicity of design is to target the mass market.”
Wealthify will ask you to select a risk proposition. This is weighed through a suitability test to validate their own logic on risk models. It is “a safety net to make sure people aren’t going in the wrong direction,” says Theo. Wealthify will help you invest in a range of asset classes like Exchange-Traded Funds (ETFs), with the algorithms defining which asset classes to invest in and when, depending on your risk profile and market information.