Wealthify is a recent entrant to the market having just successfully raised £1m on crowdfunding platform Seedrs; the pitch that convinced 726 investors to get involved was 'Wealthify is democratising investing by making it effortless and affordable – so that everyone can access the higher returns that are possible by investing’.
Wealthify is a robo-investor, it makes no claim to offer financial advice, but delivers a really simple investment process and access to five basic investment portfolios that are monitored and rebalanced by real-life investment managers - 'what our target audience is really looking for is a very simple ISA and the majority don’t need advice'.
The company has set out its stall ‘targeting the mass market with a mission to persuade a million UK savers to become investors’
Wealthify delivers a compelling and innovative proposition - its 'Circles' introduce-a-friend concept is novel, allowing introducers to reduce the fees they pay, and with a minimum investment of just £1 and maximum management fee of 0.7%, it is well pitched at those new to savings and investment.
Wealthify aims to democratise investing by reaching out to those that may not have considered themselves potential investors in the past.
Its site is simple, engaging and intuitive; it sets about dispelling some of the key fears that prevent people from becoming investors and clearly targets a younger audience.
Wealthify does not deliver financial advice and makes a virtue of that fact; it is a robo-investor assigning an individual to one of five investment portfolios based upon their financial objectives and appetite for risk.
Using a combination of ETFs and low cost tracker funds Wealthify serves up diversified portfolios of investments that are constantly monitored in the context of prevailing market conditions.
Wealthify has set itself a target of converting one million savers into investors - 'don't settle for poor savings rates, expect more from your money. Let Wealthify invest it for you' - and that seems a legitimate ambition given that there is estimated to be £700 billion currently languishing in UK savings accounts.
However, reaching out to such a large number of people is not an inexpensive undertaking and so Wealthify has created an introduce-a-friend mechanism called Circles which allows introducers to benefit from reduced management fees of their investments - the more they introduce, the more they save.
Wealthify's site is clear and intuitive and information is clear and well presented on all devices; its proposition is presented as being simple and transparent and users are encouraged to 'try it out'.
Once a user has had a stab at setting their objectives and perceived appetite for risk a series of questions sanity check that the proposed portfolio really is in line with the individual's objectives and circumstances.
Investors can create separate Personal Investment pots for each of their financial goals - tuition fees, retirement etc; each can be assigned a different risk profile; as many pots as required can be created with fees applied according to the total value of the assets a client has.
Throughout its onboarding process Wealthify confirms and reconfirms that it does not deliver financial advice.
The first phase of its sign up allows the client to choose a lump sum and regular amount to invest, decide what type of investor they are in terms of their appetite for risk - ranging from cautious to adventurous - and the platform then delivers an indication of what their Personal Investment Plan could deliver.
It is simple to alter each of these parameters to see what effect that has on the performance of the plan.
Should the applicant decide to progress on the basis of this indicative portfolio, they are then asked a series of questions to ensure that the risk profile they have chosen, and therefore the make up of their investment portfolio, ties in with the way they say they would respond in a range of circumstances - essentially a reduction in the value of their investments.
If the portfolio is considered to be out of kilter with your risk profile according to its algorithms, a warning is returned inviting the applicant to go back and reconsider their objectives, or stated risk profile, and if they decide to carry on regardless it is made clear that they do so at their own risk.
Based upon your risk profile, and assuming you are considered suitable to receive automated investment guidance, you are allocated one of five portfolios of exchange traded funds (ETFs) and passive tracker funds.
The mixture and weighting of different investments and asset classes within your portfolio are adjusted according to changing market conditions.
Multiple investment pots can be created according to individual financial goals, and each can have a different risk profile.
Step 1 - Decide what account type you want - General Investment or ISA
Step 2 - Create your plan by selecting a lump sum, regular investments, time horizon and risk profile
Step 2 (detail) - Choose the risk profile most appropriate to you
Step 3 - Receive an indication of what your plan could achieve
Step 4 - See the range of investments included in your Personal Investment Plan
Step 5 - A series of questions now sanity check the risk profile you selected based upon you reaction to range of scenarios relating to a decline in the value of your investments
Step 6 - If the answers you give suggest that you may not really have the appetite for risk you claim, you are invited to 'hold your horses'!
Step 7 - Either explain the discrepancy between what you said and what the platform assessed or progress to add your personal information and payment options at your own risk
With some of the automated investing platforms it is difficult to see where guidance ends and advice begins; the margins are blurred and in the absence of definitions set in stone by the regulator, each offers a subtly different take on things.
However, with Wealthify, there's no such ambiguity - it is a robo-investment platform, and to prove as much it serves up a disclaimer every time it believes it could be construed as delivering advice.
It makes it very clear that those with savings are missing out on the benefits of investing and makes it as simple as possible for those savers, or those thinking of investing for the first time, to clamber aboard - 'you choose, we invest, we optimise' defies simplifying as a mission statement.
Wealthify contends that there is not an 'advice gap' in the UK, rather there is a confidence gap - people feel that investing is not for them because it’s too complicated, and they don’t trust professional advisers; they are much more likely to heed family and friends.
Wealthify delivers access to five basic investment portfolios of ETFs and low-cost trackers that are monitored and rebalanced by real-life investment managers - 'what our target audience is really looking for is a very simple ISA and the majority don’t need advice'.
Once a client has selected an amount to invest - lump sum or regular investment - and an account type - general investment account or ISA - an indicative portfolio is returned along with projections of the returns it might achieve. When choosing to progress the application, there is a suitability questionnaire to ensure that the proposed portfolio, or indeed robo-investing, really is for you.
Those going through its process could come to the conclusion that they should have a crack at investing - its site quotes the 8.89% p.a. average income in global stockmarkets over the last five years and leaves you to do the mental arithmetic to see how that compares with your Post Office account.
Although imagery on the site alludes to the lifestyle that investors could aspire to, you are never far from a reminder that investing is not a frivolous pursuit and that some of the stalwarts of the global financial scene sit behind its technical wizardry.
Wealthify is an engaging, simple product that can be used by anyone to invest for their future, and it is prepared for the challenge of getting people to invest for the first time. With a maximum fee of 0.7% per year, a minimum investment of £1 and regular investments from just £20 per month, barriers to entry are low to those with small sums to invest.
A unique feature is its 'Circles' introduce-a-friend incentive; whilst some commentators have applauded it as a way of adding an element of social media and peer group interaction, Muckler suspects that it is a prudent, and pretty natty way to address one of the thorny problems that each of the robo-advisers face - the potentially ruinous cost of customer acquisition.
To achieve its ambition of converting one million savers into investors would cost a pretty penny and the discounted fees it offers clients to introduce family and friends comes at a fraction of the cost of traditional marketing; what could be better than a personal recommendation from a satisfied friend or relative?
Maybe Wealthify should go the whole hog and ensure that an application form for a Wealthify Tuition Fee Buster account goes home along with the Pampers and other baby-based sundries from every maternity ward, or the Wealthify Wedding Planner account form gets tucked into Junior's lunchbox.
When robo-advice first entered the public's lexicon, much was made of its potential to reach out to tech-savvy millennials and dramatically grow the universe of investors in the UK.
Whilst some have reassessed this ambition in the light of the high cost of customer acquisition and are using financial advisers as a decidedly non-cyber route to market, Wealthify has steadfastly declared its intention to engage with the next generation of investors and has delivered a simple and engaging proposition in that pursuit.
Wealthify does not try to be something it is not - it does not offer advice, it does not deliver anything fancy in terms of bespoke risk management and portfolio construction; what it delivers is five risk-adjusted portfolios and an ISA wrapper that allow those new to investing to build long term wealth in as simple a fashion as we have seen.
Its sign up process encourages users to try out some permutations of investment amounts and time horizons, before challenging the client's knowledge and emotional response to loss at the business end of the application.
Circles is a good innovation even if it is born out of necessity, and delivers the potential to engage users in debate around savings and investment in the future.
Wealthify's pricing is keen, with an average fund charge of 0.17%.
There is plenty of content on the Wealthify site and it is clear from its tone that it aspires to reach far beyond the pool of existing investors and perhaps even make investing engaging and, whisper it, maybe even fun; that is a big tick in the box for the Muckler. There's lovely.
Muckler thinks Wealthify is good for: