Investing Apps: Which Ones Are Best for Beginners?

Investing in the stock market has never been easier. With the rise of user-friendly apps and robo-advisors, you can grow your wealth without feeling overwhelmed. Recent comments by Rachel Reeves have sparked interest in getting more Britons to invest their savings in the stock market rather than relying solely on cash accounts. But with a myriad of options at your fingertips, how do you know where to start? In this article, we delve into some of the most popular investing apps to help you make an informed choice and start your investment journey today.

The Power of Robo-Advisors

For those who may lack the time or confidence to manage a portfolio, robo-advisors serve as an excellent solution. These digital platforms utilize technology to automate the investment process, providing ready-made portfolios that cater to different investor profiles.

How Do They Work?

Most robo-advisors require you to complete a brief questionnaire that assesses your investment goals, risk tolerance, and time horizon. This information helps them craft a tailored portfolio, often composed of exchange-traded funds (ETFs) that track indices like the UK or US stock markets, or even commodities such as gold.

Getting Started with Investing Apps

Let’s explore some of the top investing apps designed especially for new investors, offering various features and benefits.

Nutmeg

Overview

Nutmeg is one of the pioneers in the robo-advisory space, launching in 2012 and acquiring over 200,000 users by 2023. With a staggering £4.5 billion invested through the app, Nutmeg is a force to be reckoned with.

Minimum Investment

• £500 for ISAs and pensions.
• £100 for lifetime ISAs and junior ISAs.

Investment Choices

Nutmeg offers various tiers of service, allowing you to select your risk level from 1 to 10. Opt for fully managed portfolios, or choose the fixed allocation service, which adjusts once a year.

Fees

• Fully managed option: 0.98% of funds.
• Fixed allocation: 0.65%.

What We Like

Nutmeg’s commitment to transparency is commendable. Users can review performance metrics, like the 43.4% return of its 6/10 risk portfolio over ten years.

Moneybox

Overview

Since its launch in 2016, Moneybox has garnered over 1.5 million customers and manages upwards of £10 billion in assets.

Minimum Investment

Open an account with as little as £1.

Investment Choices

Select from three core strategies: cautious, balanced, and adventurous. The cautious option preserves safety, while the adventurous one maximizes growth.

Fees

• £1 per month subscription.
• 0.45% platform fee plus 0.17% for core funds.

What We Like

Moneybox’s round-ups feature allows users to invest spare change automatically. Link your cards, and round your purchases up to the nearest pound for effortless saving.

Dodl

Overview

Launched in 2022, Dodl is the latest kid on the block and is owned by AJ Bell. Despite its newness, it provides a fresh take on investment management.

Minimum Investment

Start with £100, or set up a direct debit from £25 monthly.

Fees

• 0.15% annual fee with a minimum of £1 monthly.
• 0.31% for core investments.

Investment Choices

Dodl offers ready-made funds categorized by risk level and even allows you to choose individual stocks.

What We Like

Thematic investing options enable you to invest in trends, like their “robo revolution” fund focusing on robotics companies.

Wealthify

Overview

Founded in 2014 and now under the umbrella of Aviva, Wealthify simplifies the investment process with a focus on clarity.

Minimum Investment

• £1 for ISAs and £50 for pensions.

Investment Choices

With five risk levels ranging from cautious to adventurous, Wealthify diversifies your portfolio efficiently.

Fees

The platform charges 0.6%, with additional costs based on the type of portfolio.

What We Like

Wealthify’s outlook page provides users with insightful overviews of investment prospects, enabling smarter decision-making.

MoneyFarm

Overview

Originating in Italy, MoneyFarm has expanded its reach to the UK, boasting 160,000 active users and £5 billion in managed assets.

Minimum Investment

A starting point of £500 is required.

Investment Choices

Seven risk levels guide users through various investment strategies suited to their risk appetite.

Fees

• Active managed options: 0.75% management fee plus 0.3% for investment costs.

What We Like

MoneyFarm provides easy visibility into portfolio breakdowns, making it straightforward to understand where your money is going.

Need to Know

Before you dive into the world of robo-advisors, consider these essential points:

• Check for Regulation: Ensure the platform is regulated by the UK’s Financial Conduct Authority (FCA).
• Compensation Scheme: Look for membership in the Financial Services Compensation Scheme (FSCS) to protect your investments.
• ISAs are Key: Stocks and shares ISAs can help you save on taxes, allowing up to £20,000 annually.
• Understand Fees: Be aware of all potential fees to prevent surprises down the line.

Final Thoughts

With so many options available, it’s crucial to do your research. The rise of investing apps makes it more accessible than ever to grow your wealth. Whether you choose Nutmeg, Moneybox, Dodl, Wealthify, or MoneyFarm, you’re stepping into a world where your money can work harder for you. Start small, stay informed, and watch your investments flourish!