For individuals who prefer professional management over picking their own shares or funds, digital wealth management platforms, often called 'robo-advisers', have emerged as a cost-effective solution. These online platforms and apps aim to bridge the gap between self-directed investing and traditional financial advice, which typically requires substantial investable assets and higher fees.
These platforms utilise technology to assist investors in identifying their risk profile and the appropriate portfolio for them. While the technology guides portfolio selection, the actual investments within these portfolios are chosen by human experts. Portfolios are often constructed from low-cost funds or ready-made investments, accessible through various account types including general accounts, stocks and shares ISAs, or self-invested personal pensions.
The annual all-in fees for digital wealth managers, encompassing fund management charges, generally fall between approximately 0.5% and 1.25%. This cost structure is typically more expensive than the cheapest DIY investing options but tends to be less costly than comprehensive independent financial advice. Some platforms, such as Vanguard Managed and IG Smart Portfolio, have estimated annual costs of 0.52% and 0.72% respectively, while JP Morgan Personal Investing's strategies range from 0.63% to 1.13% annually.