This InvestEngine review is here to take a look at this new trading platform and to see what it has to offer. With platforms such as Trading 212 and FreeTrade already available, we wanted to take a look and see what InvestEngine has to offer. The InvestEngine platform exists to open up investing to us all. Rather than being a reserve of the already wealthy, InvestEngine allows everyday people to trade in ETFs ( Exchange Traded Funds) and build long-term wealth through their investments.
The InvestEngine website makes clear what its purpose is. It states that the platform’s intention is to allow people to build “Smart investment portfolios that cost you less and give you more,”. It also states that it wants to help us all to build long-term wealth. With InvestEngine only coming into existence in 2019, and with the much anticipated DIY portfolio builder being released in 2021, we wanted to take a look at just how it works and what it is capable of delivering. By the end of this InvestEngine review, you’ll be fully informed and be able to decide if this is the investment platform for you and whether you will want to take advantage of the current £50 welcome bonus.
So, what does InvestEngine do?
InvestEngine is a platform that aims to allow you to put your money to work. Interest rates are still at an historic low and so there is little return when you place money into a traditional savings account. InvestEngine makes investing accessible to all. A simple to use smartphone app allows anyone to create an investment portfolio and to monitor their returns.
When signing up with InvestEngine, the platform needs to know a little about you. If you opt for a managed portfolio (which we’ll come onto shortly), you will be asked questions about the amount that you want to invest (the minimum amount you can start with is £100) and around your attitude to risk. Based on this information, a diverse portfolio will be created. The aim is to create long-term wealth for its users. When it comes to creating your portfolio, there are two options: DIY or managed:
If you opt to use InvestEngine to build your own portfolio, you’ll benefit from zero commissions. This means that you can trade and maximise your return by avoiding what would usually be the biggest expense. With the DIY option, you are fully in control and are able to choose from the available ETFs (currently 150+).
InvestEngine allows you to handpick the ETFs and then build your investment strategy by setting portfolio weights for your ETFs. The platform allows you to maintain your strategy by allowing automatic top-ups for rebalancing. This removes the work that would usually be required when it comes to working out the percentages involved. The major benefits of the DIY option are :
- Zero account fees
- Zero handling fees
- Simplicity when it comes to managing your portfolio
If you opt for an InvestEngine managed portfolio, you will face a 0.25% charge for the privilege. As fees go, this is certainly on the low side when you consider that a traditional fund manager would charge anywhere from 1% upwards. With the managed option, InvestEngine will build your portfolio based on the preferences that you have previously stated.
InvestEngine work to maximise your return. They do this by investing in ETFs, but only at a level of risk that suits you. The benefit of a managed portfolio is that all of the work is done for you. Knowing your long-term aims. InvestEngine will monitor your portfolio and ensure that any necessary tweaks are made. This means in terms of rebalancing your portfolio and ensuring that it is on target to achieve its returns. Of course, no investment is guaranteed and values can go down as well as up.
InvestEngine Account Types
InvestEngine offers three different account types that you are able to invest in. By taking a look at what these offer, you should be able to decide which one works best for you. The options are ISA (individual savings account), personal account, or business account. Here’s an overview of what each type has to offer:
Most people have heard of ISAs and are aware that they are a way of saving, tax-free. They allow you to invest up to £20,000 each year and the returns are not subjected to income tax or capital gains tax. The stocks and shares ISAs offered by InvestEngine offer the potential for better returns when compared to cash ISAs. Opening an ISA with InvestEngine requires a £100 minimum deposit. Regular top-ups can be made with the minimum being £1. If you want to add to your ISA via direct debit, the minimum amount is £50.
It could be that you have already used your annual ISA allowance. If that is the case then the InvestEngine personal account could be beneficial. These allow you to seek either long-term growth or regular income. Being opened with a minimum deposit of £100, you are able to access your money easily. Although a personal account doesn’t provide tax-free returns like an ISA, it is possible that you could benefit from dividends allowance or capital gains allowance. This will depend upon your personal circumstances and you would need to seek professional advice.
If you run a business and that business has surplus cash then you may benefit from the InvestEngine business account. Many businesses find that their business accounts pay little to no interest. A business account with InvestEngine will be based upon your attitude to risk, but it has the potential to be much more rewarding than a business savings account.
How can the InvestEngine benefit you?
When it comes to your portfolio with InvestEngine, there are two aims that you can pursue. These can see you seeking growth or regular income. Your decision will have an impact on the ETFs that are invested in and how your portfolio needs to be managed. Let’s take a look at each option in turn:
Using your InvestEngine portfolio to grow your long-term wealth sees it consisting of low-cost ETFs. Based on current market conditions ,you could expect 5% of your funds to be placed into gold and silver with the remainder being split between stocks and bonds. Your attitude to risk will be a consideration here and InvestEngine grade this from Growth 1 (least risk) to Growth 10 (highest risk with highest potential return).
If your long-term wealth is already taken care of then an income portfolio may be more suitable. This can see you receiving a monthly income that is paid directly into your bank account. There are three risk levers here: Cautious, Higher, and Enhanced. Your level of risk will impact the mix between stocks and bonds in your portfolio.
Who is InvestEngine suitable for?
InvestEngine attempts to make investing accessible to everyone, and we think that they succeed. The offering on their platform appeals to two types of investors: those that are hands-off and those seeking low-cost investing.
The managed portfolio has what are probably the lowest fees that you can find. At 0.25%, plus the low-cost EFTs, InvestEngine provides a cost-effective way to build a portfolio without getting involved yourself. The platform is able to build your portfolio, taking into consideration your attitude to risk, and with only £100 needed to get started, it is accessible to almost everyone.
For those that want to be more hands-on and involves, the InvestEngine DIY option is ideal. This allows them to maintain control and comes with zero commission and zero trading fees.
Is it easy to open an InvestEngine account?
Opening an account with InvestEngine is incredibly straightforward. As you’d expect, the platform is going to need you to provide them with your personal details and you’ll need to set up a password for your account. You can access your account either via the website or via the app which is available for both Android and iOS.
Part of creating your account will see you being asked questions if you opt for a managed portfolio. These will cover:
- Your current financial situation
- What your goals are
- The time-frames you want to invest for
- Your attitude to risk
With this information, the platform can go ahead and start to create a portfolio that suits your needs. Opening an account now can see you being rewarded with a £50 bonus that helps you to kickstart your investment journey.
Is InvestEngine safe?
The first thing to say here is that InvestEngine sees your funds being invested. No investment ever has any guarantees and no one can promise you a set return. The chances are that you will see the value of your portfolio go up and down. Generally speaking, the longer money is invested for the more likely you are to see a return. But what about InvestEngine specifically?
InvestEngine is authorised and regulated by the Financial Conduct Authority. This means that your funds are kept separate from funds that belong to the company. InvestEngine is also a member of the Financial Services Compensation Scheme. This means that if InvestEngine fails and can’t pay claims against it, you could be entitled to compensation up to the value of £85,000.
InvestEngine provides a terrific platform that makes trading accessible to all. What makes this platform attractive is that there is the DIY option which is free of fees and a managed option where the fees are more than just a little attractive. Fees of 0.25% can not, to our knowledge, be beaten elsewhere.
The current welcome bonus of £50 is a great incentive to go ahead and give this platform a try. We believe InvestEngine provide a safe environment where you can invest with confidence. If the platform meets your needs, why not give it a try for yourself by signing up today?
InvestEngine (UK) Limited is authorised and regulated by the Financial Conduct Authority FRN: 801128.