It feels like the investing market in the UK is exploding. Numerous brokerages and wealth management services are popping up, all aimed at creating a cohesive, elegant experience that lets UK residents of all levels participate in the stock market, ETFs, and pre-made portfolios. For some investment providers, that's making a sleek app that appeals to the younger crowd. For others, that involves creating managed portfolios that require minimal investing knowledge to get started. As we'll see in this InvestEngine review, though, few accomplish the goal of making investing as accessible as this company.
Are you interested in investing your money? If so, here's what you need to know about InvestEngine (including why signing up for an account is likely a good idea!).
InvestEngine Review: What Is a Digital Wealth Manager?
InvestEngine is a relatively new online wealth/investment manager that aims to make investing far more accessible and affordable than it usually is. Founded in 2016, this company has made a significant impact in a short amount of time. They have one of the most accessible platforms for people to begin investing with, and they're one of the rare investment providers that offer both business and personal accounts (we'll get more to that later).
The investment field is getting crowded in the UK, though. There are brokerages, investment companies with managed portfolios, and others all vying for your business. Indeed, with companies like Nutmeg, Wealthify, and Moneyfarm, InvestEngine is facing some stiff competition!
InvestEngine First Impressions
From the moment you navigate to the InvestEngine site, you know that you're going to have a premium experience. The site is well-designed and very clean. They show off their dashboard and their app in the first part of the page, both of which are stylish and user-friendly.
Scrolling down the page, it becomes evident that InvestEngine targets both the moderately-experienced investor and the total newcomer. You can pick from do-it-yourself portfolios or choose ones managed professionally by experts at InvestEngine.
After that, you see the three types of accounts they offer – ISA, personal, and business – along with some ratings and reviews. Then, you'll see the fees – 0.25% for professionally-managed portfolios and 0% for do-it-yourself ones.
First impressions matter when trying to promote trust and a desire in people to open an investment account. InvestEngine's design pulls people in and gives them all the information they need right away. They know the account types offered. Additionally, experienced people know that they can use InvestEngine to construct a do-it-yourself portfolio for a 0% fee, while newcomers can choose the managed option for 0.25%.
The app is similarly sleek and sophisticated. The colour palette this company uses is inviting, and it certainly didn't look awkward and clumsy like some of the trading apps even ten years ago!
What Are Some of the Reasons to Choose InvestEngine?
There are five primary reasons why investors may wish to choose InvestEngine over some of their competitors.
Managed Portfolios Make Investing Easy
One of the most admirable aspects of InvestEngine is how simple it is to begin investing. InvestEngine offers managed portfolios where experts pick a balanced set of ETFs. These ETFs may invest in equities, bonds, metals, and more. As such, if the thought of picking out stocks or ETFs seems daunting, managed portfolios are for you!
InvestEngine's system works by asking what type of managed portfolio you want: growth or income. Growth portfolios rely on equity-based ETFs more to attempt to achieve capital gains. Conversely, income portfolios work by providing “estimated variable income of 1.5%, 2.7%, or 4% a year” that they pay monthly into your bank account. So, as a hypothetical example, if you have a £10,000 account with the 4% a year option, you could be looking at about £33 per month as income.
Few investment places make investing so easy. Offering two options – growth or income – helps guide those new to investing in figuring out what type of goals they're looking to achieve.
Of course, as with all investments, your capital is at risk, and past performance is no guarantee of future returns. But that's true of the expertly-managed portfolios or the do-it-yourself versions. The managed portfolios make the entire investing process that much more straightforward.
The UI for the Web and App Are Sleek
As we will see throughout this InvestEngine review, a common thread is that the entire product feels cohesive and well-thought-out. For example, the managed portfolios are intuitive and straightforward, as are the web and app UIs. Both are streamlined, modern, and work with multiple browsers and on all phone platforms.
Many trading apps feature complicated order entry forms or interfaces that assume that people generally know about trading. InvestEngine makes getting started trading about as intuitive as possible. If you have a managed portfolio, it's quite literally as simple as selecting how much you want to buy and tapping a button!
InvestEngine Offers All Account Types
For personal accounts, InvestEngine offers two types: a general investment account and an ISA. The ISA lets prospective investors put in as much as £20,000 per year.
However, uniquely, InvestEngine also offers a business account. If you have a business with surplus cash that's earning little in a savings account, you can open up a business investment account at this brokerage. With that account, you can invest in ETFs and potentially have the opportunity to earn better returns. Of course, as with personal investment accounts, returns are never guaranteed.
These three account types make InvestEngine special because entrepreneurs can use the same investment site to manage their ISA, general investments, and business investments. For self-employed people, InvestEngine is likely the best way to go!
Unlike some investment companies, InvestEngine has negligible fees. For do-it-yourself portfolios, the fee amount is 0%. If you pick your ETFs, you won't have to worry about annual fees. Even if you use one of the expert portfolios, the cost is only 0.25% annually. That number is much lower than others. Wealthify, one of InvestEngine's competitors, charges 0.60%. Nutmeg, another popular digital wealth manager, charges anywhere between 0.45% and 0.75% annually for the first £100,000 invested.
These fees add up. On a £10,000 managed portfolio, you'd pay £25 a year to InvestEngine. That same product would cost £45 and £60 on Nutmeg and Wealthify, respectively. That might not sound like a huge difference, but let's say you're saving £10,000 a year. In the first year, you'd save between £20 and £35. In the second, your balance would be £20,000, so you'd be saving between £40 and £70. This number would keep growing. Over 10-20 years, you could potentially save thousands of pounds choosing InvestEngine!
InvestEngine Accounts Have FSCS Protection Up to £85,000
InvestEngine takes many steps to secure its customer's funds. They adhere strictly to UK law and have equally strict finance mechanisms in place to keep your data and money safe. One of those protection mechanisms is FSCS protection up to £85,000. In other words, if InvestEngine fails and can’t pay claims against it, you can get up to £85,000 back from the Financial Services Compensation Scheme.
The registration with the FSCS shows that they take their duty to clients seriously!
What Are Some Areas of Improvement?
As with any business, there are a couple of areas where InvestEngine could probably use some improvement.
SIPP Account Type Missing
While this investment company ticks a unique box offering a business account, it also doesn't provide one of the more common personal accounts: SIPP (Self-Invested Personal Pension). SIPP accounts can be valuable because investors can claim tax relief on up to £40,000 annually. If you're already maxing out your ISA every year, a SIPP is a fantastic way to sock even more money away for retirement!
Hopefully, InvestEngine considers adding this account in the future!
Income Portfolios Are Mostly Bonds
This complaint is relatively minor. However, it is worth noting because it helps prospective clients understand what they're getting. If the income portfolios mentioned earlier sounded interesting, you should know that they use ETFs that consist primarily of bonds and not dividend stocks. This distinction is important in a bull-market run like what we're experiencing now. If you invest in the income fund, you'll miss out on the potential capital appreciation because bonds aren't a part of that. Hopefully, in the future, InvestEngine will do another portfolio option that gives people the opportunity to have an expertly managed portfolio that provides dividends and potential capital appreciation!
InvestEngine Review: Should UK Residents Open an Account?
All in all, InvestEngine is one of the strongest digital wealth managers in the UK right now. The ease with which people can begin investing through the managed portfolios, combined with the low investment requirements and low fees, make it a fantastic option for individuals and businesses. If you live in the UK and want to begin investing, you should consider opening an account!
InvestEngine Review: Final Thoughts
There's a lot to love about InvestEngine. The fee structure is about as low as you can go in the United Kingdom. That alone makes InvestEngine one of the top investment managers in the UK. They added on a sleek interface and intuitive investing options, making this a no-brainer to recommend overall.
Unless you need a SIPP account, there's pretty much no reason not to use InvestEngine over many other online investing services in the UK. It's lovely not having to pay many fees or deal with a complicated, challenging app!
InvestEngine (UK) Limited is authorised and regulated by the Financial Conduct Authority FRN: 801128.