UPDATE: The Wealthify cashback deal (see below) ran out early on Thursday September 7 so if you click through, you'll see a sign explaining they’ve already gone. However, do check back soon as we will be updating this page when we have more on offer.
Robo-funds are being heavily advertised. They're far simpler than normal investing but you're locked in to invest in a 'portfolio' of funds. We think this is somewhat restrictive. However, right now one of these robo-funds is offering cashback via a special link when you invest, which'll get you a huge head start on other funds.
Without the cashback, they're fighting against other standard investments, and we'd always tell you to look for lower fees and a bigger choice. But as some of this cashback has been equivalent to up to a 10% head start, other products would need to do very well to beat them.
MoneySavingExpert.com's speciality is not what to invest in – we only look at these as deals, as we can't tell you what is going to be a good or bad investment. So the most important thing to understand is:
We're not saying to go for these funds, we're just saying that if you're going to go for these anyway, then make sure you get the cashback.
Here are five things you need to know:
- With robo-investment firms you can't pick your own selection of funds. Instead, your money will be invested in a basket of funds selected by the robo-provider and based on your risk profile (the firm will ask you a number of questions when you sign up to assess the level of risk you're willing to take).
- Always keep an eye on fees. Because even small fees year after year can eat into your investment.
- The bigger the investment, the less cashback will matter. If you invest more than the minimum needed to receive the cashback, do remember that you'll be more reliant on market movements to boost your returns in relation to the cashback.
- ALWAYS remember the warning. As with any investments, the value of your funds can go down as well as up, and while it's unlikely, you could lose all your money.
- These deals are for both stocks & shares fund ISAs and ordinary investment plans. Remember, everyone in the UK over 18 has a £20,000 ISA allowance for 2017/18. For more options, see our Stocks & Shares ISAs guide. You can only open and contribute to one stocks & shares ISA each tax year.
If this is the first time you've considered any type of investing, it'll be worth reading our beginners' guide to investing to get a broader idea of what's involved.
Get £40 cashback if you invest £400 for six months
UPDATE. This deal is now sold out but we are keeping its details here to show the type of offer that comes along and whether it may be suitable for you.
Wealthify is offering £40 cashback to the first 500 new customers who open and fund a stocks & shares ISA or ordinary investment plan via this Wealthify* link.
The £40 cashback will be paid after six months if you either make a minimum initial investment of £300 and then five subsequent top-ups of £20 or more at any point within this period, or you could deposit the £400 upfront in one go. Either way, you need to keep the cash invested for at least six months or you'll lose the £40.
As part of the deal, Wealthify also won't charge any management fees for 12 months after you open the account.
So for anyone investing less than £15k, the total charges in the first year will be about 0.19% (no Wealthify management fee, a 0.19% fund manager charge), meaning if you were to invest the minimum £400 your annual fee – assuming the sum invested stays the same – will be less than a quid.
You'll be investing in a fully managed portfolio based on the level of risk you're willing to take (Wealthify will ask you a few questions to assess your risk profile.)
- Annual fees (after 12 months): £1-£15k at 0.7%, £15k-£50k at 0.6%, £50k+ at 0.5%
- Min deposit: Normally £1 but £300 + 5 payments of £20 to get the cashback. Alternatively, you could put in the full £400 from day one
- Exit fee: None. If funds are withdrawn before 6 months, no cashback is paid out.
- Fund manager charges (estimated): 0.19%