Last Updated on February 10, 2023 by Melissa S.
Over the past few years, investing has become more accessible than ever before. With the onset of DIY investing apps, anyone is able to pick up their phone and begin investing, without going through a costly and lengthy procedure with a middleman.
While this is undoubtedly good news, there can be some pitfalls to the DIY investing approach, with some consumers being rightly wary about the security of their money, and whether the investment platform they choose has any hidden fees.
In this article, I look at the InvestEngine platform, comparing its features, cost and options with that of other investment platforms.
Please note that this article is for information purposes only, and does not constitute financial advice.
InvestEngine, launched in 2019, is an ETF (Exchange Traded Funds) investment platform offering a range of options for DIY investors.
Unlike apps such as Freetrade, you cannot invest in single stocks, but instead in a portfolio of shares, known as Exchange Traded Funds (ETFs).
What sets it apart from similar apps is the option for users to pick their own portfolio, rather than simply the option of a managed portfolio. This means that you can choose the stocks to invest in within your portfolio, completely free of charge.
If you prefer a managed portfolio where the stocks have been chosen by a funds manager, then this is still an option. Managed portfolios are charged at 0.25% per year, which is cheaper than such as Nutmeg and Wealthify.
When choosing a portfolio, you will be given the option of which type of account you would like. There are 3 options:
Individual Savings Account (ISA) – This allows you to invest up to £20,000 per tax year tax free. Please note that you are only allowed to open one ISA per tax year. You also have the option to transfer over funds from other ISAs.
Personal Account – This has an unlimited cap on investment, but only the first £2000 on dividends will be tax free. Up to £12,300 tax free allowance is included on capital gains.
Business Account – A business account is obviously only suitable for those with a business. You can invest an unlimited amount of money with a business account, but the amount of tax you will pay on dividends and capital gains depends on your business circumstances.
What makes InvestEngine unique is the ability to build your own portfolio completely free of charge.
When selecting this option, you will be taken to an options page where you can choose from over 510 Exchange Traded Funds. You can add these to your portfolio, and choose the weighting of your investment into each fund.
You can adjust these weightings as your investment strategy changes, so the process is completely flexible.
InvestEngine’s automation tool then automatically calculates and conducts trades on your behalf based on the weightings you have set. This is a great feature and gives intermediate investors guidance while still allowing the flexibility of a DIY portfolio, free of charge.
If you prefer a managed portfolio, which is the option I would recommend for beginners, you will be asked to choose between a Growth or Income portfolio.
The main difference is that a Growth portfolio is designed with long term investment in mind, whereas an Income portfolio is designed to give you a regular return of up to 1.6%, 3% or 3.8% a year (estimated and variable).
Once you have answered a series of questions based on your investment goals, such as timeframe and a target , InvestEngine will tailor a managed portfolio to suit your needs. You are able to view the breakdown of all the ETFs this includes.
If you are creating a DIY portfolio, InvestEngine is completely free. There are no set up, trading or withdrawal fees. If you are using a Managed portfolio, the fee is 0.25% per annum, which is significantly cheaper than similar investing services. The table below shares a breakdown of costs in comparison to similar robo investors.
Please note, the minimum startup investment for either portfolio is £100.
How InvestEngine compares to similar platforms (managed funds)
|Platform||Provider fee||Average Total Fund Costs||Total||£20,000 annual cost|
InvestEngine has excellent customer reviews, with 4.4 out of 5 on TrustPilot based on approximately 400 reviews.
Yes, InvestEngine is completely safe. It is regulated by the FCA (Financial Conduct Authority). Its regulatory permissions can be found on the FCA Register.
Additionally, when you invest with InvestEngine, your money is protected by the Financial Services Compensation Scheme (FSCS) up to £85,000. This means you may be able to get up to £85,000 of your investment back should InvestEngine cease trading.
However, this covers your initial investments and does not reflect any potential growth on your investment.
Client cash is held at NatWest bank.
Yes, InvestEngine is regulated by the FCA and you can read its regulatory permissions on the FCA website.
Yes. When you open an accountand invest £100, you will receive a £25 bonus. T&Cs apply.
Yes, if you are an existing customer who refers a friend, you will receive a £25 bonus when your friend opens an account and invests a minimum of £100. T&Cs apply. This offer expires on December 12th 2022.
Visit the InvestEngine website to get started.
InvestEngine is a great choice for beginners and intermediates alike to manage their own investment portfolio. With its zero fees and low managed portfolio fees, it’s the cheapest and easiest way to .
About the Author
Melissa is a working parent who left behind a senior management salary for a better work/life balance. Following her own money saving and money making strategies she was able to clear debt and live a life she loves. Blogging, selling digital products on Etsy and selling preloved items on eBay are her favourite side hustles. Read her story here.