Disappointed with the returns from your cash savings and need a hand in choosing the right investment platform for you? Well, with so many to choose from, it can be a bit of a minefield. But today, we’re going to compare Nutmeg and Wealthify to see which provider could be right for you.
The last few years have seen a momentous change in how investing works. Not so long ago, any attempts to invest in the stock market would need a trip to your local high street bank or get in touch with a financial advisor. Thanks to the rise of the internet, investing has become a whole lot easier. Whether you’re looking at a General Investment Account (GIA), a shares Individual Savings Account (ISA), or maybe even a Junior ISA, this can all be done from the comfort of your home, either on a laptop or even in the palm of your hand on a smartphone.
What has made investing simpler has been the emergence of investing platforms. There has been a rapid increase in the number of Fintech (financial technology) companies that have all sought to bring investing to the masses. Today, we’re going to look at just two: Nutmeg and Wealthify. We’re going to run through all that these platforms have to offer and see which, if either, is the best place to invest your money.
Nutmeg vs Wealthify at a glance
Perhaps you’re in a hurry and don’t have the time to read to the end (although we really recommenced that you do!) so here’s a quick overview of what these platforms have to offer:
- When looking at fees, Nutmeg’s platform fee goes as low as 0.25% while Wealthify’s lowest rate comes in at 0.6%
- Aviva is the company behind Wealthify so this adds to its credibility
- Meanwhile, Nutmeg is backed by Oxford Risk
- These two platforms allow you to use an automated investment system known as a robo adviser
- Getting started with Wealthify costs next to nothing. With Nutmeg, the minimum investment to open an account varied between £100 and £500
- As well as shares ISAs, Nutmeg and Wealthify both have personal pension schemes available
- Both Nutmeg and Wealthify seek to diversify your funds as much as is possible
- Both also the option to invest in responsible portfolios
- The ability to contribute to both by direct debit
So, there we have these two platforms at a glance. If you want to know more about how they work, and how they can help you build your general investment account or ISA, then the best thing to do would be to keep on reading.
Charges at a glance
|Up to £100,000||0.6%||0.75%|
|Extra fees (average)||0.16%||0.27%|
Are my funds safe with these platforms?
If you’re looking at a shares ISA, Junior ISA, or general investment account, a prime concern most potential investors have is how secure their funds are. We’re going to keep this section brief – you’re funds are safe and secure with both of these platforms. Both are protected by the Financial Services Compensation Scheme for any amounts up to £85,000. Should the unlikely happen and these companies go under, you have rights that protect you up to this amount.
Both of these providers are regulated by the Financial Conduct Authority (FCA).
A closer look at Nutmeg
Nutmeg is an online investment platform and it holds great appeal to those who are just starting out. There is plenty of guidance and an attempt to keep things simple so as not to put beginners off. That being said, there are also plenty of features that are aimed at experienced investors. That is what is great here – the platform appeals to a broad mix of investors and does a great job for all of them.
Nutmeg products include general investment accounts, shares ISAs, Junior ISAs, a Lifetime ISA and personal pensions that you can put your money into. Whichever you choose, you will find that Nutmeg aims to keep everything simple and affordable. Often, the extra fees that creep in here and there are baffling and soon mount up, quickly sending newbies running. Nutmeg is refreshingly different in terms of transparency and affordability.
The initial investment required may be a push for some people, but at £500 it is certainly set at a reasonable level. If £500 seems out of reach, there is the option to invest in an ISA instead where you’ll need a minimum of £100 to get started.
How exactly does Nutmeg work?
We have already said that Nutmeg is refreshingly simple and we think that you will agree. When you have decided how to invest, be that a general investment account, a shares ISA, or maybe a pension, you then get the assistance of a portfolio specialist. This specialist works on your behalf to get the best results from your money.
Even the signup process is simple at Nutmeg. There are a few basic questions and a simple slider which allows them to create a risk profile for you. From this profile, Nutmeg has a better understanding of your approach to investment, risk level, and exactly where you see your journey taking you. For beginner or first time investors, you can choose which index funds you want to invest in based on the different risk levels and their past performance.
For those who are experienced investors and already have their own investment style, there are fixed allocation plans. This sees investors having more control and generally applies to the pension plans that are available.
A closer look at Nutmeg’s charges
The management fees charged by Nutmeg are among some of the clearest that we’ve seen. As well as being transparent when it comes to what the fees are, they are also set at a competitive rate. If you have anything up to £100,000 invested in its socially responsible and fully managed portfolio, you will attract fees of 0.75%. For those with larger portfolios, invest over £100,000 and your fees will drop to 0.35%.
These investments also attract a fund account fee of around 0.2% and a market spread charge of 0.7%. If you opt for an ethical investment, the fund account fee rises to 0.32%.
There is a fixed option offered by Nutmeg too. Here, you will pay fees of 0.45% on your first £100,000. However, as soon as you invest above this level, these drop to 0.25%.
That, in a nutshell, is it. There are no hidden fees or additional costs to be worried about. The only other thing to be aware of is the £20 fee that’s charged if you decide to move stock over to someone else.
What products are available with Nutmeg?
The Nutmeg investment model is all about variation and diversifying. This is a great approach for those who are keen to explore just how many options are available. You will be able to invest in a general investment account, stocks and shares, a shares ISA, and junior ISAs. You can also allow Nutmeg to manage your pension and to make investments on your behalf.
Nutmeg is primarily about hands-off investing. For this reason, you need to have faith in the system and where your money will be invested. By allowing a portfolio specialist to manage your funds, you will see that they are spread and that there is a healthy mix of risk levels (although some of this depends upon your investor profile).
The main draw for Nutmeg is their Smart Alpha portfolios, something that was created when they were taken over by JP Morgan. These portfolios aim to give higher returns by combining Nutmeg’s core investment principles, ETF and fractional investment expertise.
How much control do I have over my investments with Nutmeg?
There are varying degrees of control depending upon what your preferences are. One of the main attractions of Nutmeg is that it offers an automated system that is hands-off and provides a passive approach for investors. However, if you’d rather have more control you need to investigate the various plans that are available that will give you this.
Although understandably, some investors will want to be more hands-on, the automated system offered by Nutmeg is a great approach for many. Especially for those who just want their money to work for them and not to worry about complicated financial decisions.
A closer look at Wealthify
When it comes to comparing Wealthify with Nutmeg, you will see one key difference straight away. While this platform still offers a hands-off approach, it does so through a robo-advisor. Alongside this new approach to investing you will find that you can also get started on your investment journey with just £1. Admittedly, riches are hardly likely to follow your £1 investment but this entry-level opens up the world of investing to everyone.
There are numerous gurus and experts who sing the praises of Wealthify. One of the big attractions here is that it is backed by the giant company, Aviva. This certainly brings a sense of confidence and is likely to see experienced investors experimenting with the platform as well as beginners.
Strong backing and low entry levels are a great start, but does that see the Wealthify platform better than Nutmeg? Let’s take a look.
So, how does Wealthify work?
What is offered by Wealthify is similar to that offered by nutmeg, in that the passive approach to investing looks to diversify your funds as much as possible. Whereas Nutmeg sees portfolio specialists, Wealthify is even more hands-off. Yes, there are experts behind the scenes, but everything is automated and dealt with by robo-advisors.
This approach may be great for some people, but for others, it leaves them feeling a little wary. When it comes to investing larger sums of money, the human touch is always beneficial and helps to add reassurance.
When it comes to signing up, you will find that the process is pretty similar to Nutmeg. You will face a series of questions and your answers will help to build your profile and discover your risk appetite. Whether you’re exploring general investment accounts or ISAs, your answers will help Wealthify know the best place to put your money. One great feature here is that Wealthify will actually stop your investment if it believes that there is no long term gain for you.
Examining Wealthify’s fees
Like Nutmeg, Wealthify has also adopted a simple fee approach. No matter how much you invest, you’ll be charged a management fee of 0.60%.
On top of this, you will need to pay for an investment cost on top, which averages out at around 0.16%. If you choose an ethical portfolio, this cost rises from 0.16% to 0.7%.
The Wealthify products
With Wealthify, you can choose to explore options that take care of your pension, as well as general investment accounts, shares ISAs, and Junior ISAs. Whatever product type you choose, the Wealthify system is all about spreading your funds and diving them into smaller pots. There is as much diversification as possible.
How much control do I have with Wealthify?
If you choose to invest with Wealthify, the reality is that you have very little control over your funds. You need to place your trust in the hands of the Robo advisors and allow them to do their thing. While this approach is great for beginners, more experienced investors may find this a turn off.
Nutmeg vs Wealthify – Pros and cons
- Fees as low as 0.25%
- Backed by Oxford Risk
- 24-hour access to your portfolio
- Great range of investment packages
- Simple sign up process
- A diverse approach to investing
- Minimum investments start at £100 or £500 depending on the product
- Low entry levels mean you can get started with £1
- A flat fee across the board
- Backed by Aviva
- A great option for beginners with a completely hands-off approach
- There is no human touch or financial advice
- As this is fully automated, you have no degree of control at all
Nutmeg vs Wealthify – which is best?
When it comes to these investment platforms, there is clearly a great deal going for both of them. They both provide an ideal environment for beginners to enter the world of investing without being overly complex. While this simplicity can be a great pull it can, however, put more seasoned investors off. Certainly with Wealthify, while the automated process is attractive, experienced investors may find this frustrating.
The Nutmeg account just pips Wealthify at the post. While the two platforms are extremely close, what does it for me are three things:
- The lower fees available at Nutmeg for bigger investments
- The human touch
- The choice to be more hands-on
Perhaps the biggest point here is that human touch, which is completely lacking at Wealthify. The good news is, that whichever platform you choose to explore, both offer a decent way to build up your investment portfolio.
If you decide to invest with Wealthify, then use the button below for a bonus £50. To qualify, you must
- Be a new customer.
- Invest a minimum of £250.
- Keep your investment for at least three months.
Please remember that when it comes to the stock market, the value of your portfolio can go down as well as up. Because of market volatility, these portfolio options shouldn’t be used for the short term and they’re not a good way to make a quick profit. Take a look at some of the best investment apps if you want to make quick trades.
If you’re unsure if investing is for you, then speak to a financial adviser for further information.
If you’re interested in further investment platform comparisons: