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How to Choose the Best Robo-Advisor Platform in the UK

Written by, Marija Petkova

Updated September, 5, 2022

Robo-advisors in the UK are becoming increasingly popular as more investors turn to them for low-cost, automated investment advice. But with so many platforms to choose from, how do you know which is the best one for you?

Here’s how to choose the best robo-advisor platform in the UK.

What Is a Robo Advisor Platform?

Robo-advisors are digital platforms that provide financial advice and planning services with little or no human assistance. 

These platforms use algorithms to evaluate risk levels and provide investors with a selection of pre-made investments based on their risk profile.

They also offer automatic investing that’s based on your preferences, robust goal planning and portfolio management, as well as security features, education, and customer service.

How to Choose the Best Robo-Advisor Platform in the UK

More people have been interested in investing because of user-friendly investment apps.

When looking for the best UK robo advisor, it’s important to consider a number of factors. 

Compare fees

Arguably, the most important factor is the cost. Many platforms charge an annual management fee, which can range from 0.25% to 1.00% of your account balance. 

Extra services

Not all robo-advisors offer the same features and some charge extra for premium tools. For example, there are robo-advisors that may automatically rebalance or harvest tax losses, which might be beneficial.

Investment options

Some platforms offer a wide range of investments, while others specialise in a particular type of investment

Customer service

Another important factor is customer service. If you have any questions or problems with your account, you’ll need a good customer service team that’s knowledgeable and quick to respond.

Terms and conditions

Finally, always read the terms and conditions of each platform before signing up. This will help you better understand fees and liabilities.

How to know if a robo-advisor is a good investment platform choice for you

You should consider moving to a robo-advisor platform if: 

  • You need help deciding how and where to invest your money. 
  • You want to automate your investments.
  • You are not into selecting individual investments. 
  • You’re looking for long-term investments.

How to Open a Robo-Advisor Investment Account

Opening an account on any robo-advisor platform doesn’t take more than 15 minutes. You’ll need to provide proof of identification, such as a passport or driver’s licence, complete a short survey, and set a monthly investment amount.

Once you’ve opened an account, you’ll get periodic portfolio reviews and an annual risk review to verify that your risk profile is still in line with the answers you’ve provided in the survey.

What fees will you have to pay?

Robo-advisor fees are generally low for all platforms. Although each robo-adviser platform charges different fees, they include:

  • A platform fee – a fee to use the platform’s service.
  • An average investment cost/fund fees – the cost of underlying funds in a managed portfolio.
  • Market spread -the difference between the sell and buy price.

For example, Moneyfarm charges a platform fee of 0.75%, an average investment fee of 0.20%, and a market spread fee of 0.09% for a total of 1.04% in fees.

What Are the Benefits of a Robo-Advisor Platform?

Some of the most significant benefits of a robo-advisor platform are:

  • Accessibility – You can get access to your robo-advisor platform as long as you have an Internet connection.
  • Safety – The portfolio recommendations are based on your risk profile.
  • Easy to use -Robo-advisors are suitable for beginners because most of them have a user-friendly interface with the goal of simplifying the process of investing.
  • Time-saving – You don’t have to be a professional financial analyst or spend a lot of hours researching and studying how to invest your money with robo-advisor platforms since they do all the heavy lifting for you.
  • Low cost: Robo-advisors provide useful services at the fraction of the cost of what you would have to pay for a financial advisor.

Bottom Line

Robo-advisors are digital platforms that are beginner-friendly and simple to use, even for people who have never done any investing before.  They offer a variety of tools and automate the investing process while saving your time and money. 

My name is Marija, and I'm a financial writer at DontDisappointMe. Although finance might not be everyone's cup of tea, my 10+ years of working in one of the biggest banks in my country, and my interest in extensive research on everything finance/investment-related, have made me somewhat of an expert in the field (if I do say so myself). No longer having the passion to work in a corporate setting, I decided that I couldn't let all of this knowledge go to waste so I started writing. And, here I am! Today I try to share my knowledge with my audience in the hopes of making this topic as simple and interesting as possible. In my leisure time, I like spending time with my family and travelling to new locations.