Which is the best robo-adviser for me, and what is it?

The use of "robo-advisers" offers a compromise between paying for financial advice and doing it yourself

This is what's accessible.

Traditionally, there are two primary ways to invest: working with a financial advisor or doing it yourself. However, digital wealth managers, also known as robo-advisers, have gained popularity.

Digital wealth managers offer an alternative to the do-it-yourself method or paying for and entrusting your money to a financial advisor.

Instead of selecting your own investments and monitoring your portfolio, a robo-adviser is an automated online investment platform that customizes a portfolio to match your objectives and risk tolerance.

To find out how you feel about risk, most will ask you to answer a quick online survey.

Along with your investment goal and timeline, you might also be asked how much you are willing to invest.

One of several portfolios with varying risk and return potential will then be assigned to you by the platform.

Each portfolio is chosen by its algorithms, which also keep an eye on and modify them in response to shifting market conditions.

A yearly platform fee and underlying fund charges are then normally paid by users.

The majority use exchange-traded funds (ETFs) to construct their portfolios, though some choose to include individual securities.

Depending on which platform you choose and the investments you make, using a robo-platform may also be less expensive than hiring a financial adviser or using some do-it-yourself platforms because ETFs help keep investing costs down.

But keep in mind that even though robo-advisers have extremely intelligent algorithms, they are not perfect, and just like any other investment, there is no guarantee of returns.

Optimal robo-advisors.

The nutmeg.

Having been established in 2011, Nutmeg is among the oldest robo-advisers in the United Kingdom and has received numerous accolades throughout the years. Your choice of investing style will determine its fees.

For its socially conscious, smart alpha, and fully managed products, the fee is 0 percent up to 100,000, then 0 percent after that. For its fixed allocation product, the fee is 0 percent up to 100,000, then 0 percent after that.

This is prior to fund costs, which for its fully managed and fixed allocation portfolios range from 0% to 20%.

Nutmeg describes its five smart alpha or fixed allocation portfolios as "globally diversified portfolios of ETFs designed to align with your risk preference and goals." It also has ten portfolios in each of the fully managed and socially responsible categories.

For its pension, general investment, and ISA products, the minimum investment is 500; for its Junior ISA and Lifetime ISA, it is only 100.

Moneyfarm.

Moneyfarm was established in 2012 with the goal of simplifying investing.

Investors can select from 14 globally diversified risk-rated portfolios, including seven fully managed classic portfolios and seven fully managed sustainable portfolios. A £500 minimum investment is needed to access Moneyfarm, which is actively managed. You pay lower fees the more you invest because of its tiered fee model structure. The fees that Moneyfarm charges range from 0 percent to 75% for accounts with capital up to 10,000 to 0 percent to 35% for accounts with capital over 500,000. There is a less expensive fixed allocation option in which your portfolio is rebalanced annually rather than being actively managed. Additionally, the pricing is tier-based, ranging from 0 percent to 45% for 500 to 100,000 to 0 percent to 25% for over 500,000. Its typical fund fee is between 0% and 20%.

InvestEngine.

InvestEngine offers three primary investing options based on your tolerance for risk. For a fee ranging from 0% to 25%, novice investors can select a managed portfolio, in which InvestEngine handles daily strategy decisions. Investors who decide to construct their own portfolios are not charged a fee. As a result, InvestEngine is among the most affordable robo-advisors available.

To build a portfolio, InvestEngine requires a minimum investment of £100. Additionally, users have the option to DIY or purchase pre-made LifePlans, which are portfolios with pre-made equity exposure levels of 20%, 40%, 60%, 80%, or 100%.

A chip.

The asset management behemoth BlackRock oversees Chip's investment portfolios, which are renowned for their exceptional savings rates. It allows you to select between three funds: Balanced, Adventurous, and Cautious.

Its "Chip X" plan, which offers access to the entire range of investments (and is required if you wish to open a stocks and shares ISA), costs 5.99 per month or 65.05 per year. Its basic account offers an annual fee of 0.25 percent on invested money (you can also hold cash). This indicates that although there are no platform fees, fund fees are still applicable. There must be a minimum deposit of one.

Make money.

Wealthify offers three primary investment plans: Wealthify Junior Stocks and Shares ISA, Wealthify Stocks and Shares Investment ISA, Wealthify Pension, and a general investment account. If you decide to invest ethically, all of the options are also offered as ethical plans.

Whether you invest £1,000 or £100,000, Wealthify charges a flat fee of 0.6 percent plus approximately 0.6 percent in investment fees. Because Wealthify has a minimum investment requirement of one, it is a good choice if you have a smaller sum to invest.

The advantages of robo-advisers.

Cheap: This is one of the main arguments in favor of using a robo-adviser rather than a conventional discretionary wealth manager. ETFs are typically less expensive than active funds, which financial advisors may choose.

According to the Financial Conduct Authority, advisors typically charge 2 percent for initial advice and 0.8 percent for continuing monitoring and support.

Especially in the long run, that can save you money on a sizable investment portfolio every year. On a £100,000 portfolio, for instance, the annual fee would be 800 based on average advice figures, but it would be nearly halved to 450 if a robo-adviser was used to pay 045 percent. Additionally, according to the FCA, the average advised customer has over 150,000 assets under advice, but on a robo platform, you can start with as little as 1.

More variety: Because robo-advisers typically invest in exchange-traded funds (ETFs) that cover a wide range of asset classes, such as stocks and bonds, the precise allocation of these funds is determined by your risk tolerance. This makes their offerings more varied. On a do-it-yourself platform, you might be able to invest in ETFs, but the selection might be smaller.

The dangers of robo-advisers.

Lack of individualization: Even though potential clients complete a survey to determine their investment preferences, they may still be grouped together into a very general category.

Not suitable for trading or short-term investments: Robo-advisers work best for longer-term investments. Although robo-adviser-run portfolios are typically thought of as being fairly diversified, they are more appropriate for investors with longer investment time horizons and are not impervious to the typical fluctuations that can happen in any portfolio.

No continuing assistance: A financial advisor can create a plan that takes into account your entire lifestyle and other costs, and they can monitor your progress toward your goal by analyzing all of your earnings and outlays. Only the performance of your portfolio on the robo-adviser's platform may be shown, and it can be challenging to understand how this fits into your larger strategy. Furthermore, if you are concerned about the markets and how they may affect your portfolio, you cannot call a robot; instead, an adviser can reassure you and prevent you from withdrawing or even adding excessive amounts of money.