In for A Pound: Wealthsimple Review

Wealthsimple review | How to invest with little money

Madam, may I ask what is the secret of your success? A journalist asked a successful businesswoman. “Two words,” she said

“What are those words?” The journalist asked. “Right decisions,” she said.

“Certainly. But could you tell me how you make right decisions?” The journalist asked. “One word,” she said

“What is the one word?” The journalist asked. “Experience,” she responded.

“And how do you get the experience?” The journalist asked. “Two words,” she said.

“Which are….?” The journalist asked. “Took action.”

The same goes for investing. Without taking action to invest

  • Nothing happens,
  • Your money just sleeps and never has the chance to grow and
  • You will never gain first-hand experience to hone your ability to invest and experience financial success.

With bills to pay and food prices rising, investing might be at the bottom of your financial to-do list. Besides, it’s just bankers and city slickers with Rolexes who invest, right? Wrong. Times have changed and investing safely couldn’t be simpler.

Investing can feel like a daunting task, especially when you don’t have a lot of money to invest – but it doesn’t have to be. Thanks to the boom in online investment tools, making money from money is becoming ever more accessible to the average bod on the street.

You don’t have to be an investment whizz or have a pile of cash to start. In fact, you can start growing that money tree with as little as £1.

Why Should I Invest?

Investing is a great way to make your money work for you and the sooner you start the sooner you can sit back and let the magic of compounding take care of you.

Unlike traditional saving methods, investing offers more potential for high returns, as well as helping you build your net worth while beating inflation.

Investing can also help you feather the nest for a comfier retirement. Better than a money-stuffed mattress any day! Check out our post on the ‘8 Reasons to Start Investing’ for a quick remainder why it is super important to start investing.

We like to keep our finger on the pulse of the latest apps and websites which can help you make the most from your money.

To help you get started thinking about investing, we tested the increasingly popular Wealthsimple to see what they can do with a small amount of your money.

Why Should I Invest | Wealthsimple review uk

What is Wealthsimple? is a goal-oriented digital investing platform with a human touch. With as little as £1, Weathsimple helps you invest towards your financial goals, such as a deposit on a house, retirement, saving for your children’s education or simply building wealth.

The company was founded in September 2014 in Toronto, Canada and has expanded to the US and UK with over £1.5 billion in combined assets under management.

As the name suggests, Wealthsimple’s mission is to simplify the world of investments and open it up to everyone, regardless of age and net worth.

How Does Wealthsimple Work?

Wealthsimple puts you in the driving seat. You decide on your financial goals, the amount of risk you want to take and how long you want to invest for.

They then construct a diversified portfolio in line with your needs to maximise your investment, which, we’ll say it again, can be as little as £1!

The company invests your money across the entire stock market, using funds that track the global economy. This lowers your risk by taking advantage of market diversification. Meaning that you have financial fingers in lots of pies, rather than just one.

How to start investing with Wealthsimple in 5 Steps:

It took us around 20 minutes to sign up. Here’s how you get started:

  1. Sign up to
  2. Determine your investment style
  3. Select and set an investment account
  4. Create your personalised portfolio
  5. Fund your account to get your money working for you

Let’s look in a bit more detail….

Step 1: Create Your Wealthsimple Account

Signing up for an account was hassle-free. You fill in your details, verify your account and you’re good to go.

Why Should I Invest - Wealthsimple review uk 2

Step 2: Determine your Personal Investment Style

Once you’ve completed the sign-up process, you’ll be asked a few questions to determine your financial situation, your financial goals and the level of risk you are comfortable with. This helps Wealthsimple to determine the right investment strategy for you.

Your ‘investment personality’ is determined by your age, income, investment experience and goals, so make sure you are honest about what you want to get the best from the platform and your investment. Here’s how this stage looks:

Why Should I Invest - Wealthsimple review uk

Why Should I Invest - Wealthsimple review uk

Why Should I Invest - Wealthsimple review uk

Why Should I Invest - Wealthsimple review uk

Step 3: Set up Your Investment Account

Ok deep breath, this is where you start investing. Once you have determined your financial goals, investment strategy and style, you can open a new account (more on this later) or you can transfer an existing ISA, JISA or pension from another institution. 

Why Should I Invest - Wealthsimple review uk

What Types of Account Can I open?

You can open an Individual Savings Accounts (ISA), Junior ISA (JISA), a personal investing account and a pension account with Wealthsimple, it’s your choice. As you can see, the types of account are clearly summarised at this stage…

If you are unsure about the account you wish to open, you can contact Wealthsimple’s qualified Investment Advisors, who will walk you through the process or sign you up over the phone.

If this your first investment, we suggest you invest in one of the tax wrappers, such as an ISA or a pension. These will help you grow your money and take advantage of tax-free investing. Remember, you can invest up to £20,000 of your annual allowance in your ISA, tax free, during this tax year.

Why Should I Invest - Wealthsimple review uk

Step 4: Build Your Personalised Portfolio

Once your account is set up, Wealthsimple builds your personalised portfolio based on the goals and needs questionnaire you completed. There are three portfolio styles: conservative, balanced or growth.

Let’s drill down into the three options:

Option 1: Conservative

The conservative option has a lesser allocation to shares and a greater allocation to bonds than the balanced option. It’s designed for investors seeking level stability between risk and return, but who are willing to accept short-term market fluctuations.

Why Should I Invest - Wealthsimple review uk

Option 2: Balanced

This option invests in a wide range of assets, with an even allocation to shares and bonds. It is designed for investors seeking medium to long-term growth who are willing to accept low to medium fluctuations in returns.

Why Should I Invest - Wealthsimple review uk

Option 3: Growth

This option invests mainly in UK and US shares, with smaller allocations to bonds and emerging markets. It’s designed for investors seeking strong, long-term returns who are willing to accept medium to high fluctuations in returns.

Why Should I Invest - Wealthsimple review uk

Step 5: Fund Your Investment Account

To start investing, simply add funds to your new investment account and Wealthsimple will put your money to work by purchasing a diversified mix of passive funds (low cost funds, such as index trackers, which help you build wealth slowly and without much input).

What are index trackers? Index tracker fund is simply where your money is invested in a basket of all major companies listed in specific market and are left to grow overtime. These funds usually track the performance of well-known index such as the FTSE 100 in the UK and the S&P 500 in the US.

This type of investing means that instead of trying to outdo the market, you follow the market, gaining returns along the way.

Why Should I Invest - Wealthsimple review uk

Why Should I Invest - Wealthsimple review uk

A Word About Risk

If you’re an investing novice, taking risks with your hard-earned money can be scary. Remember, all investments carry some degree of risk and the higher the risk, the higher the potential return.

Wealthsimple invests your money in diversified funds, lowering your risk by spreading your savings across a variety of assets and investments. Choose the best investment option or portfolio styles for you and start small to give yourself time to get used to how investing works.

Related: The Enemies of Your Investments (And How Turn Them to Friends).

How Much Does It Cost to Invest With Wealthsimple?

As we all know, investing cost money, which shouldn’t cost you an arm and a leg. The good news is that compared to the average 2.50% charge for active fund management in UK, Wealthsimple’s fees are relatively low:

  • 0.5% fee for accounts up to £100,000
  • 0.4% fee for accounts above £100,000

In addition, there is an extra 0.2% management fee for the underlying or passive funds in the portfolio and there is no fee for opening, closing, trading or transferring accounts.

As the value of your investment grows the cost of managing your investments decreases. The percentage difference between 2.50% and 0.7% may seem small but as your investment grows, small fees can add up to and eat into your return.

In simple terms, if you invest £500 it will cost you £3.50 per year to invest your money. That’s less than a fancy coffee. If you invest £2,000 a year, you will pay approximately £14 and if you invest over £100,000 each year, you will pay less to invest.

And the good news is that Money Nuggets readers get their first £5,000 managed for free in the first year.

Why Should I Invest - Wealthsimple review uk

Is Wealthsimple Safe?

Wealthsimple is authorised and regulated by the by the Financial Conduct Authority (FCA). They have licences that are regulated in the same way as high-street banks. They are also covered by the Financial Services Compensation Scheme (FSCS), up to £85,000 should the they go bust.

Investments are managed by experienced fund managers and held securely by a custodian (SEI Investments (Europe) Ltd).

Also, your financial information is encrypted with the state-of-the-art security measures and there is a double verification process to ensure your account is safe and secure.

What We Love About Wealthsimple?

  1. It’s easy to sign up. It took about 20 minutes to set up an account and transfer money. 
  1. No minimum amount or investing experience is required. This means anyone can open an account with £0 balance and start investing with as little as £1. 
  1. Rewards. Invite your friends to Wealthsimple and you get £5,000 managed free for 12 months for each friend who funds their account. 
  1. Regular reviews. Wealthsimple not only manages your investments, they also review your investment regularly to make sure it is serving your goals and interests. 
  1. The personal touch. You can contact an Investment Advisor at any time to help you with sign up, chat about your options and if you change your investment goals. 
  1. Effortless investment. Wealthsimple manages your investment for you, freeing up your time for the other, more enjoyable things life has to offer. 
  1. Socially responsible investment options. ‘Ethical investing’ allows you to invest in companies that align with your values and bring positive outcomes for people and society. 
  1. Reinvests your dividend. As your money earns interest, both the interest and appreciation are automatically added to your original investment, for as long as your money invested. 
  1. Account tracking. You can see how your investments are doing via the Wealthsimple app. Their website is also clear and user-friendly, perfect for novice investors.

What We Don’t Like About Wealthsimple?

  1. No Joint Account. There is no option to open a joint investment account. Couples who have similar financial goals and want to build wealth together will have to look elsewhere. 
  1. No Trust Account. If you want to set up a trust fund for your kids, you won’t be able to do it here – there’s no option to open a trust account. 
  1. No Proven Track Record. Although Wealthsimple is growing rapidly, it is still a new platform in the UK. Therefore, it has no long-term proven performance track record. 
  1. High Investment Fees for investments over £100k: Wealthsimple charges 0.5% in fees per annum for investments greater than £100k, which is higher than some of its competitors, such as Nutmeg and Vanguard.

What Do We Think About Wealthsimple?

Wealthsimple is a good starting point for new investors and it’s a great platform for experienced investors.

It’s great if you are new to investing and want to start small, slow and with less risk. The platform is user-friendly, jargon-free and we like the fact that they take an ethical approach to investing.

Who Else Is Out There?

Here are some good alternatives to Wealthsimple you definitely want to check out.

  • Nutmeg: Great for beginners but requires a £500 minimum deposit and a regular investment of £100 per month. Helps you to build wealth faster.
  • Wealthify: The best alternative to Wealthsimple. Good for new investors and those with very little to invest.
  • Vanguard: For low cost investing and those interested in long-term funds, Vanguard is one of the biggest platforms out there, so there is something for everyone.

Now that you’ve read to this point, there is really one question…… What are you waiting for? Click here to get started with Wealthsimple and get your first £5,000 managed free in the first year.

However you start investing, don’t put it off. In a world of poor returns on savings, investing even a small amount is the first step to growing your money and building wealth for your future.

Over to You

Have you started investing? What’s your experience of Wealthsimple or any other digital investing platforms? Share with us here!

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Money Nuggets product reviews are unbiased and may contain affiliate links, which means we may get paid a small percentage of the fee, at no additional cost to you. Click here for our full disclosure policy. Regardless, we only recommend products or services we use personally and/or believe will add value to our readers.

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