The online broker InvestEngine offers ETF investing in DIY or robo-advice [1] flavours. It’s beginner-friendly and suitable for veterans with large portfolios.
Moreover it’s a market-beater on costs.
Aside from the exceptionally low fees, InvestEngine feels like it’s been designed to make important investment decisions straightforward. The trade-off is some choice constraints, compared to other brokers.
[2]Strengths
- Low costs: InvestEngine’s zero commission / zero platform fee combo is awesome for DIY investors. The robo-advice / managed service is cheaper than its rivals, too.
- Easy to use: the platform is very thoughtfully designed, and gives the impression InvestEngine is on your side.
- Pro passive investing [3]: the restricted choice of ETFs is good enough. The calm user environment should promote sensible investing behaviour. As opposed to exploiting your monkey brain.
Weaknesses
- Choice constraints: it’s ETF investing only. There are few bells and whistles. For some this will be a positive. Choice overload bedevils investors, after all.
- Limited account options: there’s no SIPP, Lifetime ISA, or Junior ISA.
- Robo-advice complexity: the ready-made portfolios betray the over-elaboration that’s commonplace in the discretionary management industry.
InvestEngine fees
| Platform | Annual fee | Fee notes | Dealing: Funds | Dealing: ETFs | Regular investing | FX charge | Entry/exit fee | Good for |
|---|---|---|---|---|---|---|---|---|
| InvestEngine | £0 DIY investing | 0.25% for managed portfolios | n/a | £0 for fixed times daily | n/a | n/a | £0 | Very low fees |
| Shares ISA | £0 | 0.25% | n/a | £0 | n/a | n/a | £0 | - |
| Trading | £0 | 0.25% | n/a | £0 | n/a | n/a | £0 | - |
| SIPP | No SIPPs | |||||||
Note that a dash sign in the table means ‘as above’.
Minimums:
- Investment amount: £1
- Account balance: £100
- Account top-up: £1
Pros and cons
InvestEngine is the Double Decker [4] of investment platforms. Two contrasting approaches are combined in one tasty product:
- DIY investing that’s near-free.
- A managed portfolio service that suggests and implements investments for you. (Also known as a robo advisor.)
The DIY investment side of InvestEngine is a serious contender – if you’re happy to work within its limitations.
You can only invest in a restricted palette of ETFs. No shares, no funds, no investment trusts. There’s talk of adding more investment types later. But for now it’s just a select range of ETFs.
Personally I don’t see that as a problem at InvestEngine’s prices.
Granted, there are fewer ETFs available than at brokers who charge more.
But I could easily build a diversified portfolio from the InvestEngine range.
Most of the big ETF names are present and correct: Vanguard, iShares, HSBC, SPDR, and so on.
I found low-cost options available in every important asset class. (Admittedly a few of my usual go-tos were missing.)
Trades are executed automatically. InvestEngine buys and sells ETFs between 2.30pm to 4.30pm every day.
You put in your orders in advance. But you can’t trade at will as with most platforms. And there’s no fancy trading options like stop-loss or limit orders.
Prices are only updated on the platform twice a day. No worries! Just Google the price of your chosen ETF instead.
You can’t invest in a SIPP, Junior ISA, or Lifetime ISA for now. But a stocks and shares ISA [5] and general investment account come as standard.
If any of the above is a dealbreaker for you then forget about InvestEngine.
Certainly day traders hooked on CFDs and candlestick graphs would enjoy it about as much as swingers at evensong.
But otherwise, such restrictions are the quid pro quo for the platform’s passive investing strengths.
The main USP
InvestEngine’s standout feature is the pinch-me-I-must-be-dreaming lack of fees for its DIY service.
You’ll only pay the usual ETF management fees and dealing spreads.
There’s no platform fee or dealing commissions. Such charges typically make ETF investing expensive for small and new investors.
You won’t get gouged by other costs either. Don’t fret about inactivity fees, cash withdrawal charges, or FX conversion costs every time you deposit some money.
Entry and exit fees are also absent. So you can try InvestEngine without feeling locked in.
How does it do it? Probably by reducing overheads by reining in the vast lightshow of options you get with most brokers.
That doesn’t mean InvestEngine has reduced customer support to a chatbot streaming expletives though. On the contrary, it typically seems responsive and helpful, judging by our sweep of the online feedback.
User experience
InvestEngine [6] has not cut corners on the online interface or app. Both are a pleasure to use.
Design is minimalist, thoughtfully uncluttered, and very clean.
There’s no creeping gamification. You don’t sense that the information architecture is designed to manipulate you.
The interface feels intuitive, easy to navigate, and attractive without being overwhelming.
Sure, the portfolio analytics are slight. If you expect lots of flashy tools and investment ‘research’ then look elsewhere.
But what you do get is a very clever fund portfolio order facility:
- Tell InvestEngine what ETFs you want in your portfolio.
- Select your asset allocation percentages.
- InvestEngine then executes the necessary trades to deliver on your asset allocation. You don’t have to micro-manage them.
Once you’re up-and-running, you can use this feature to automatically rebalance your entire portfolio to its target allocation with a click.
That’s a passive investor’s dream.
Do robo-advisors dream of electric money?
InvestEngine presumably hopes to make bank through its managed portfolio and robo-advisor service.
The fee is 0.25% per year, plus an estimated 0.07% in trading spreads. That’s considerably cheaper than established rivals such as Moneyfarm, Nutmeg, or Wealthify. (Albeit we’ll have to see if it lasts.)
This ready-made service works much as you’d expect.
You answer an automated risk tolerance [7] questionnaire. Doing so supplies your attitude to risk, financial objectives, resources, goals, and time horizon. InvestEngine takes you down its decision tree and then serves up one of its ready-made portfolios for your approval.
Accumulators can choose the growth portfolio options. Meanwhile anyone in the decumulation [8] zone might opt for an income portfolio.
If you don’t like InvestEngine’s initial suggestion you can play around the edges a little, retake the questionnaire, and see what else is on offer.
But beyond that you hand over your portfolio’s management to InvestEngine [6].
It will rebalance for you. The ETF mix you hold will occasionally be tweaked in line with changes to your investment strategy, risk tolerance, or the product range.
Computer says why not
In my view, InvestEngine’s robo-advice approach suffers from the industry-standard flaw of over-complication.
It offered me a growth portfolio that included 14 ETFs. Asset allocation weights were as low as 1%. There was also a dollop of investment overlap.
Meanwhile, the income portfolio was 99% bond ETFs studded with some eye-brow raising junk bond and emerging market sovereign debt [9] choices.
To be fair though you might run into these issues with any managed portfolio provider. They’re the price of outsourcing control.
If you want a robo-advice service then InvestEngine is worth a look [6]. It delivers competitive fees, product transparency, and ease of use.
Note it’s not regulated to offer financial advice however. (See InvestEngine’s FAQs.)
Some other robo-advisors do provide that – for a fee.
InvestEngine review summary
All-in-all, InvestEngine impressed me. Its market niche is truly pro passive investing and keyed towards getting the big investing decisions right.
Low to non-existent fees mean it’s definitely worth trying – assuming you don’t mind the platform’s pared down choices. Note, transfers in are cash only, not in specie.
Trustpilot review score [10]: 4.6
InvestEngine regulation
InvestEngine is authorised and regulated by the Financial Conduct Authority – Firm Reference Number 801128 [11].
- Cash is held in a pooled client money account at Natwest.
- Investments are held in a pooled nominee account [12] lodged with Euroclear (CREST). They are segregated from InvestEngine’s company assets.
This is industry standard.
Alternatives
- Vanguard for small investors
- Freetrade or Lloyds Bank Share Dealing for ISAs
- AJ Bell Youinvest for SIPPs
Don’t forget the bonus cash offer if you sign-up to InvestEngine via our link [6]. (Capital at risk. T&Cs apply).
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