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Diary of a digital investor: on a journey with four robos

Diary of a digital investor: on a journey with four robos

Don’t knock it ’til you’ve tried it.
There are a number of online wealth managers which are trying to acquire clients and boasting about how different their services are. We decided to test them out and see what all the fuss is about.

In this new series I will be investing money with four online wealth managers and recording my experiences. Where I can, I will try to compare and contrast the similarities and differences from charges to performance. Here is what happened when I got started.

Registering for a general investment account

I picked four online wealth managers, Moola, Nutmeg, Wealthify and Wealth Builder. The common denominator is that they either do not offer advice, or you have the option of not using the advice service.

I started with Moola first. The firm was launched by former Brooks Macdonald head of investment strategy and adviser to Arnold Schwarzenegger Gemma Godfrey and only started accepting clients recently.

It is important to note that the website has a warning saying it is only a beta version, so there may be issues.

Moola had to confirm my identity, but ran into a bit of trouble. They sent me an email, which was good because for me one purpose of using an online service is to avoid talking to people.

I was contacted within a few hours to ask for more details. After providing a copy of my passport and the addresses I have lived at for the past five years, everything was approved.

The same happened with Wealthify, who sent a message immediately after my registration to ask for a copy of my passport.

I assumed providing these companies with my address, national insurance number and passport number would be enough, but it was not. However, it was a quick exchange and my account was set up within the day. Not sure how long it will actually take for them to invest my money though.

With Nutmeg, this step was actually quite easy. I was registered in a matter of minutes, my identity confirmed with no need for additional documents and all that was left to do was wait for my money to leave my account and go into my Nutmeg pot. They did say that when the money arrives it will be invested in the next ‘twice-weekly cycle’.

Wealth Builder, which launched a year ago, claimed at the time that it enables investors to create a customised investment portfolio in 15 minutes. While the initial questionnaire did take me about 15 minutes to complete, and I received an investment proposal, my application is still being processed, a day later.

Determining risk level and capacity for loss

With all four firms it was quite easy to get through the initial steps to verify my risk level.
Moola asked three initial questions:

  • Do you have a rainy day fund equivalent
    of three months’ salary?
  • Are you free from high interest debt?
  • Are you comfortable with investing and
    managing your investments on the internet or on your phone?

If you answer ‘no’ to any of these questions, the system warns you that investing might not be the right decision. The other three, Nutmeg, Wealthify and Wealth Builder had similar warnings.

There were then around 10 questions to determine attitude to risk, which was followed by a dice game to find out my attitude to loss, which was a nice touch.

At the end of this whole process, Moola decided I am a ‘cautious’ investor. This was a surprise, since the other three services determined my risk level was more in the middle.

Wealth Builder, for example, asked a series of questions – seven about ‘risk capacity’ and nine on risk tolerance – at the end of which determined that while my tolerance was a grade six, my capacity was grade four. Therefore, it recommended I select a risk grade of four.

Nutmeg and Wealthify determined that I was right in the middle, with a confident style and it recommended grade six accordingly.

From Nutmeg, Moola and Wealth Builder I received reports explaining my decisions, what my ‘investment personality’ is and providing a general summary of my answers.

For Nutmeg this comes in the form of a suitability report. Wealth Builder sends an ‘investment proposal’, which is very extensive and breaks down projected returns, potential investments and the risk profile selected. Moola sends an ‘investing personality report’.

Aside from Nutmeg, all the companies provided a breakdown of what my investment will look like. To find out what my portfolio looks like with Nutmeg, I have to wait until they receive the money.

All in all, the initial steps to determine my risk level went by quickly and the questions were easy to answer for all four services. I am more sceptical about the conclusions, however.

Especially because I did not end up in the same bucket in all four services.

It is really good that all of the sites warn the customer they should not invest unless they have three months’ living expenses in the bank.
I had expected the registration process to be faster though and to get my money invested immediately. This, it seems, will take much longer
than I thought.

If I had to pick, out of the group, the overall experience was much better with Nutmeg. But it is important to keep in mind that it has been around a lot longer than any of the others.
In the next instalment, I will look at the breakdown of the portfolios, compare how the money was invested and how long it took.


  Moola Nutmeg Wealthify Wealth Builder
Fee 0.75% Fully managed portfolio £1-£15k invested: 0.7% 0.25% initial charge.
    0.75% on the first £100k, 0.35% thereafter Over £15k invested: 0.6%  
    Fixed allocation portfolio Over £50k invested: 0.5%  
    0.45% on the first £100k, 0.25% thereafter    
Includes All administrative costs, including processing payments, executing instructions, information on the portfolio. Winterflood's fee + VAT. VAT. Trading fees Personal investment plan built, market monitoring, Winterflood Business Services charge. VAT. Execution of purchases, portfolio establishment, portfolio recommendation advice.
Additional Each ETF charge, taken directly by the provider, between 0.2%-0.25%. Fully Managed Portfolio: investment fund cost at 0.19% avg. Fund charge, 0.17% avg. Chance to reduce charges by adding people to Wealthify Circle. Ongoing adviser charge of 0.4%. Ongoing administration and custody charge of 0.3%. Fund manager charge of 0.2%. If paper valuations are chosen there is a £5 charge.
    Fixed Allocation Portfolio: investment fund cost at 0.17%    

How much I invested


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