Wealthify vs Nutmeg vs MoneyFarm vs Wealthsimple - Best Passive Investing In The UK
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- เผยแพร่เมื่อ 25 ส.ค. 2024
- I get asked this question all the time so I thought it was time to give it a proper answer. Which is the best passive investment company out there? There are 4 popular ones that everyone talks about - Wealthify, Nutmeg, Moneyfarm and Wealthsimple.
My answer is simple: None of them.
First off, I am really not a big fan of how these companies market themselves and explain their proposition to customers.
There is very little transparency - the customers actually know very little about what specifically their money is invested in and you usually get a small number (less than 10) of funds to choose from based on a risk level metric.
They claim to use Artificial Intelligence (which as a mathematician I would say is simply not true), teams of analysts managing your portfolio 365 days a year and even Nobel prize winning methodology.
I kid you not - they actually say that.
Then come the fees. All of these platforms will charge you 0.7% of your fund per year in management costs. As the size of your portfolio increases, so does the fee. Why? Because earning more money out of your clients for no reason rocks!
On top of the 0.7% you also have to pay about 0.2% on average for the fund fees for a total cost of around 0.9%.
And in exchange for paying all of these fees you get to earn anything from 5% to 9.9% per year if you invest in the highest risk option with each of the providers based on performance from past years.
In the same time frame, a basic investment in the S&P 500 index would yield you considerably more for a 0.07% fund fee.
Research and data from academia, Nasdaq, Standard and Poor's themselves and literally anywhere else you look will show you that actively managed funds underperform basic indices like the S&P 500 as much as 95% of the time.
Yet you can go and invest in the S&P 500 by opening a free account with Interactive Brokers, Lightyear, Trading 212 or another app. Some of them even give you a free share to get you started (see below).
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INTERACTIVE BROKERS (Global - Main investing app I use)
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Shortest comparison video in history followed by a load of waffle.
This is a fantastic summary and I'm very glad I watched this before opening anything with one of them. I will open instead with one of your suggestions. Thank you for pulling all this information together, gladly subscribed!
I'd also just like to say THANK YOU Sasha for not holding back with regards to your opinion.
Thanks Tom!
Thank you Sasha to make it so clear, what I like about your videos you're not a bullshit teller.
Thank you so much! 🙏
Considering the US has been the best performing developed market over the past few years, this is not a fair comparison. A global index would be more appropriate given these platforms offer global exposure. If you compare them to the Nasdaq 100, the return discrepancies will be even larger but this would say nothing about how they relatively performed.
When I decided to start investing, after a quick research, I realised these platforms have little transparency and as you pointed in the least knowledgeable and laziest conditions any decent ETF would have a much better return. Thanks for the great video.
Thanks Arash! I know I go massively against the grain with these videos as every other TH-camr waxes lyrical about any platform that offers affiliate gigs, but hey - maybe this is actually helpful!
Thanks for this! Why are you comparing only to S&P 500? Shouldn’t it be vs global?
Nutmeg have been good for me. I opened an account with them last April as they offered me zero account fee for 12months. Over the past year I've learnt a lot so I will be switching to Vanguard for my world fund and using T212 for fun. Nutmeg have given a simple return of 13% (time weighted of 35%). Can't complain.
To be honest April to now (after the crash earlier in 2020) has been one of the best bull markets ever. My investments grew something like 35-40% in the same period :)
Was pretty hard not to make money!
@@SashaYanshin I opened a Vanguard account this afternoon. I'm taking the next step in my journey Sasha thanks to your advice. Your content has been so useful, honest and informative to me. You touch on many different subjects of personal finance which others do not and you never appear to follow the crowd just to gain free shares. Please keep it up and never sell out and push the sponsored recommendations like others.
@@tom7676 Thanks Tom! The truth is - I do talk a bit about products where I have affiliate deals and I have now put out 3 sponsored videos too but I only accept these deals from companies I actually like and use myself or know a lot about.
Need to make something from the channel but there is definitely a fine line to tread - I’ve turned down a lot of affiliate gigs and sponsorships already because they weren’t things I would actually recommend.
I normally don't trust people who have a world map but this is a interesting video thanks
I started with Wealthify and it didnt really get me antywhere. After watching your vids I took the money out and put it into freetrade and I am already doing just as good as these "professionals" where doing for me
I just love the freedom of being in control - everything is completely your choice and you can adjust as you see fit.
Which one would you said is the best for beginners
I was tinking about Money farm although fees and the minimum investment is high(require alot saving) as it is actively managed and even outperformed Vanguard and Nutmeg... now feel the need to reconsider!
Thanks, this was quite eye opening
Glad you found it useful! 👍
But some of these other trading platforms does not offer tax free wrappers, this would actually make them worst off then the options.
Although buying them funds on etoro will be a cfd trade so you won't own the underlying asset.
I want to buy into a fund I’m in the uk and use Hargreaves’s lands down is that plant form ok? And when fund do you suggest
Thanks sasha great video vanguard pretty good
:)
I am just trying to get to this passive investment thing, I am completely new here. but I have checked SP500 and FTSE100, it doesn't seem they performed that well for the past 1 year and 5 years. do you still think people just to invest in big INDEX companies? not trying to protect Nutmeg or similar companies, just trying to understand what should i invest)) haha
Hi Sasha - did you say UVSD? - I cant locate that on either freetrade or 212 - unless i heard wrong. I already have VUSA so wanted to check out the other one you suggested
It was probably VUSD but I am only doing VUSA now as there is no practical difference and VUSD will incur FX fees on every platform now.
What’s the best Life time isa (Lisa) stocks and shares platform. Would you use a Lisa if you where under 25 and don’t own a house?
There aren't any good pure investing Stocks & Shares LISA options - some big players like Hargreaves Lansdown and AJ Bell offer them but the fees & management fees are really high for something that you can only put £4k per year into in my opinion.
A LISA is still great if you are young and definitely want to buy a first home at some point in the near future because that extra government top up is already a huge boost before any investing gains so if that's the objective it can definitely be a great option.
You provide really great content. Thanks 👍
Thanks Antonio!
Great video
First go and comb
Used wealithify for year and a half and they lossed me around 5% from my total £400. (£20 loss).. I would've gained near 25% in the s&p 500 if I did it without them..
Brutal. :)
That's how I do it. :)
Hey Sasha, I want to buy these etf ZWC,ZWK,ZWS,ZWE, can you recomand me please something from where can I buy them? I'm sorry for my English, I'm still learning 😅
I doubt you'll be able to buy those in the UK because of the differences in reporting requirements which mean these are typically not available.
For large US ETFs like VOO, there are UK equivalents like VUAG/VUSA/VUSD etc but I don't know about these whether there's anything similar.
So I'm looking for a stocks and shares isa with a minimal lump sum of £100 at most and low monthly deposits of around £50p/m just whilst I dip my toes into investing. Which platform would you recommend?
Check out the recent video I made about the best Stocks and Shares ISA accounts!
@@SashaYanshin Okay thank you!
Hang on - how do 1% fees suddenly become 10%? See 2:30.
I would add that commentators are now talking about the SP 500 having developed into a massive bubble which may well crash.
Why? Because so many financial advisors and their dogs have recommended it as a sure fire investment.
Managed funds do have some advantages over index funds.
1% fees as a proportion of average long term stock market returns is about 10%
is lisa (life time isa) a good investment for retirement if you dont have a pension? is it better to invest in stocks & shares lisa (with companies like aj bell / nutmeg) or just as cash lisa ( to get the govt bonus) or just normal stocks & shares isa - kindly advice...
That's a pretty difficult question to answer. As it is, the upfront bonus is awesome but the investing options for the long term are severely restricted with the current providers so it's a difficult call. I personally don't think it's a great retirement investing option because the 20 years of investing are more important to me than the huge upfront 25% bonus but it's definitely a difficult choice. If the LISA providers improve over time and begin offering better options, it might be a really great product.
@@SashaYanshin - thank you very much for the explanation , I just opened a LISA (cash) with a £1 to keep the option open but still not sold on the idea of not being able to touch my money till 60 :( i think if i learn more it will be better off to have a normal stock & share ISA
Hi how about moneybox? Do you recommend it?
Exactly the same as the others. Very limited choice and platform fees for the privilege of earning less than you could otherwise do.
I was with Nutmeg and wealthsimple for about 1 yr each. For me it felt like 2 yrs wasted, which could of been better spent in individual shares or other types of investments.
Sounds like there's some people out there who agree with me!
Alex it's a long game, leave it for 5-10 years, don't invest everything you got, speak to proper financial advisor.
Great video, just watched conversation of money review, such a bad video he talks about 10% return on Moneyfarm, then does a section on comparing S&P vs MoneyFarm and only 1.3 on S&P 500, not even the same time in the market, so misleading. 👍👍👍
The big difference is that I didn’t get paid to do my video. I was approached to do paid content for Moneyfarm and I chose to not do it. I was approached at the same sort of time that some other TH-camrs started doing theirs - of course I don’t know what their commercial relationship is, but you can draw your own conclusions.
@@SashaYanshin Yeah TH-cam needs to change their rules, so viewers can see easily if it is a sponsored video and who it is sponsored by, therefore making it easy to judge the video. Also if MoneyFarm did an advert saying we did 10% in ten months and VG did 1.3% but failed to say the time frame, the ASA would be all over them. Come on TH-cam do something about this. Great video, I had both Netmug and Wealthify in the past, now just with VG.
He even made a reaction video about one of your videos. His content is not a patch on yours, keep up the good work.
@@nickstone652 Thanks Nick - again I have no idea what commercial arrangement others have if any. I am just stating that I was approached at the same time as others started making the content. And TH-cam already has a thing - you have to tick a box if any element of your video was explicitly paid for to mark it as "sponsored". Not everyone chooses to do that.
comparing diversified products with the S&P over this window and claiming this reflects badly on those products is very misleading.
I think relying on diversified portfolios to somehow be "better" just because they are diversified is also misleading.
@@SashaYanshin Hmm: Rule #1 of investing: Be diversified. There is no way mathematically that any diversified portfolio overall can beat the performance of its best component. If you want to bet the farm on the S&P 500 then that's your call. But don't come crying to us when it tumbles for an extended period.
Great video 👍
Thanks Rayyaan!
Don't sell yourself short Sasha, your not that hard to keep up with.
:) Thanks
Thank you - I wish I knew this at the beginning of this year when I signed up with Nutmeg. I did it because I wont be actively investing and I just wanted to put my money somewhere. I will be moving to Vanguard at the beginning of the Tax Year although I am scared of rebalancing my portfolio myself - is there any alternative to that? Thank you for all your very informative videos :)
I don't know the specifics with those providers but mostly you'll have to do it yourself - the funds they have available are proprietary so I am pretty sure the only way is to cash out and buy in yourself again. Check out some of the videos I have about investing apps. There's a lot of good options out there alongside Vanguard.
@@SashaYanshin thank you for your reply - I will :)
what a cool guy, very informative video mate.
How come you are in such a good shape in lockdown and not gaining any weight Sasha??
I edit it out in post.
What about junior isa accounts would you recommend any of these companies
On my list of videos - will probably be coming out next week :)
Thanks will be waiting till watch that. Will the video also include other companies that you would recommend to a create a junior Isa account as I am interested in creating an account with my parent’s
@@ace_phoenix1018 The one in plan is a Best Junior ISA comparison type video 👍
✅
Point is though, we're in a historically anomalous bull market right now. Active management may struggle to outperform during such times but in a market downturn, actively managed portfolios generally do better and can protect you from downside.
Would money Box be in that list as well?
Pretty much the same thing from an investing perspective.
Thank you! So many good points there.
What is your opinion on Lifetime ISA and if positive what company you would choose?
I love the principle of it because it basically gives you free cash with an immediate 25% boost and if I was buying a house soon and within the parameters that LISAs set, I'd take that. The downside is that the providers that do it tend to do pretty poor products with very limited choice and a relatively high cost. So I'd mainly do it for that one off load of money and if it then earns anything on top that's extra!
Good stuff thanks
You're way behind Kevin. Keep up!
@@SashaYanshin yeah i noticed you been a busy boy
Is the SP500 still going to grow or did it reach the point of a long term plateau (similar to Europe / Japan). I heard this from another video about a week ago and I just started looking into these topics so I hope my question makes sense. Thanks
Everyone has their own opinions and of course nobody knows. My view is that there is a lot further to go based on how I see the developments in tech and where those developments are coming from.
vusa getting leathered
So is everything else...