InvestEngine Review 2024: Pros & Cons

InvestEngine, founded in 2019 by the CEOs of Gumtree and Ramsey Crookall, emerges as a comprehensive investment platform designed to accommodate a diverse spectrum of investors.

Boasting a user-friendly interface, it caters to both hands-on and hands-off investment approaches, allowing users to manage their portfolios independently or opt for expert guidance. Notably, InvestEngine stands out for its cost-effectiveness, charging no fees for self-managed investments and a nominal 0.25% fee for expert-managed options.

Specializing in exchange-traded funds (ETFs), the platform provides flexibility with pre-constructed portfolios and a DIY investment approach. With regulatory oversight from the UK Financial Conduct Authority (FCA), InvestEngine has swiftly positioned itself as a competitive player in the retail stock trading space since its inception.

InvestEngine Features

InvestEngine offers a range of distinctive features, making it a versatile investment platform suitable for various preferences:

• Account Variety: Investors can enjoy tax-free investing through Stocks and Shares ISA and a general investment account, with a Self-Invested Personal Pension (SIPP) option coming soon. Exclusive early access to SIPP registration is currently available.
• Business Accounts: InvestEngine uniquely caters to business owners, allowing them to invest their company's cash within the platform.
• User-Friendly App: The platform provides a convenient app accessible on both Apple App Store and Google Play Store.
• Managed Portfolios: InvestEngine boasts 10 managed growth portfolios, with a minimal 0.25% platform fee.
• Free DIY Investing: Investors engaging in self-directed investing benefit from a fee-free experience, devoid of dealing fees, platform charges, or set-up costs.
• Fractional Investing: Investors can engage in fractional investing, putting in as little as £1, providing access to even high-priced ETFs.
• Savings Plan: The platform offers an auto-investment feature, allowing users to invest a chosen amount into their portfolio weekly, fortnightly, or monthly, with a minimum investment of £10 per week.
• Extensive ETF Access: InvestEngine provides access to a broad selection of over 590 ETFs, including offerings from reputable providers like Vanguard and iShares.

Account Options

• General Investment Account (GIA): The standard investing account where taxes may apply based on profits, such as Capital Gains Tax, Income Tax, and Dividend Tax. Investors can have multiple GIAs across different platforms.
• Stocks and Shares ISA: A tax-free account allowing savings up to £20,000 per tax year.
• Business Account: Available for limited companies, enabling investment of company funds with no self-management fees and a low-fee managed option.
• Limitations: InvestEngine currently lacks support for Junior ISAs, Lifetime ISAs, and personal pensions. Investors seeking these options can explore alternatives like PensionBee or AJ Bell.

InvestEngine Fees

InvestEngine distinguishes itself with a transparent and cost-effective fee structure:

• DIY Portfolios: £0 platform fee for investors managing their own portfolios.
• Managed Portfolios: A modest 0.25% platform fee based on the size of the ETF portfolio for those opting for managed portfolios.
• UK Shares, US Stocks, International Shares: Not applicable (N/A), indicating no specific fees for these assets.
• Funds/ETFs: £0 platform fee, with ongoing ETF fees determined by the respective funds. InvestEngine has no control over these fees.
• Foreign Exchange (FX) Fee: £0, demonstrating no additional charges for currency conversion.
• Regular Investing: Supported through Savings Plans, offering a convenient option for scheduled investments.
• Withdrawal/Deposit Fee: £0, providing flexibility for managing funds without incurring additional charges.
• Inactivity Fee: £0, ensuring no penalties for dormant accounts.

Cost Effectiveness

InvestEngine stands out for its exceptional value proposition, particularly in terms of fees. DIY portfolios incur zero platform fees, a noteworthy feature that distinguishes InvestEngine in the market.

While managed portfolios carry a 0.25% platform fee, the absence of additional charges for a stocks and shares ISA makes InvestEngine an attractive platform for tax-efficient ETF holdings. The platform prioritizes transparency, emphasizing that ongoing fees charged by funds are beyond its control.

For those considering a transfer in the future, InvestEngine's policy of no exit fees adds to its customer-friendly approach.

Managed ISA Portfolio Costs:

• 0.25% per annum InvestEngine platform charge, which is competitive compared to rivals like Nutmeg and Moneyfarm.
• 0.15% - 0.25% ETF annual charge within the growth portfolio, with an estimated average ETF charge of 0.16% per annum.
• 0.07% Market spread on ETFs, contributing to the overall cost estimation of approximately 0.47% per annum for an InvestEngine growth portfolio.

InvestEngine Safety Assurance

InvestEngine prioritizes the safety and security of its users, implementing robust measures to safeguard their investments:

• Regulation by FCA: InvestEngine operates under the authorization and regulation of the Financial Conduct Authority (FCA) . This regulatory oversight ensures that the company adheres to stringent standards and practices that safeguard users' financial interests.
• Financial Services Compensation Scheme (FSCS): InvestEngine provides an additional layer of protection through the Financial Services Compensation Scheme (FSCS) . In the unlikely event of InvestEngine facing financial difficulties or insolvency, users are eligible to claim compensation up to £85,000. This scheme acts as a financial safety net for investors.
• Segregated Trust Account: Customer funds are held in a separate, protected trust account. This account is distinct from InvestEngine's business bank accounts, ensuring that user funds remain isolated and secure. In the event of InvestEngine ceasing operations, all funds held in this trust account would be returned to customers.
• SSL Encryption: InvestEngine employs advanced SSL 256-bit encryption for its website connections. This encryption technology safeguards users' personal information, ensuring the confidentiality and integrity of data. The use of SSL encryption provides continuous protection, bolstering the platform's security measures.
• Secure Server Facilities: All user data is housed on servers within a secure facility, enhancing the overall security infrastructure. This measure ensures that user information remains protected against unauthorized access or breaches.
• Client Cash Management: InvestEngine manages client cash through pooling, and the funds are held at NatWest Bank Plc. This approach aligns with industry best practices, contributing to the overall security and integrity of client assets.

InvestEngine's commitment to regulatory compliance, financial protection mechanisms, and advanced security technologies collectively establishes it as a safe and trustworthy investment platform for users.

InvestEngine Advantages

InvestEngine stands out as a compelling investment platform, offering a range of advantages to its users:

• Fee-Free Investing: InvestEngine provides a fee-free investing experience, particularly attractive to users seeking to minimize costs associated with managing their portfolios.
• Diverse Range of ETFs: Users benefit from a comprehensive selection of Exchange-Traded Funds (ETFs), allowing for diverse investment options across various markets, regions, and asset classes.
• User-Friendly Interface: The platform is praised for its user-friendly design, making it easy for both beginners and experienced investors to navigate the app and website seamlessly.
• Low-Cost Managed Option: InvestEngine offers a managed portfolio option with a competitive platform fee of only 0.25% per annum. This low-cost managed service provides users with professional advice and expert investment selections.
• Excellent Customer Support: InvestEngine is recognized for providing great customer support. The availability of responsive and knowledgeable support enhances the overall user experience.
• Low Minimum Investment: With a low minimum investment requirement of £100, InvestEngine makes investing accessible to a broad range of users, including those with smaller capital.
• Business Account Access: InvestEngine extends its services to business account holders, allowing business owners to invest surplus cash within their companies.
• Welcome Bonus: Users who invest at least £100 with InvestEngine may receive a welcome bonus of up to £50, providing an additional incentive for new investors.
• Savings Plan Feature: The platform offers a Savings Plan feature, enabling users to auto-invest regular amounts at their chosen intervals, fostering disciplined and systematic investing.
• Auto Rebalancing: Managed portfolios benefit from a one-click portfolio rebalancing feature, ensuring that the investment allocations align with the user's financial goals and risk tolerance.
• Wide Choice of Investment Accounts: InvestEngine caters to diverse investment goals by offering a range of accounts, including ISA accounts, general investment accounts, and business accounts.
• One-Click Portfolio Creation: Users have the flexibility to create portfolios without an obligation to invest immediately. This feature allows for strategic planning and portfolio customization.
• Expert-Backed Managed Portfolios: The managed portfolios come with professional advice and expert picks, providing users with curated investment strategies for a commission of only 0.25%.

InvestEngine Limitations

While InvestEngine offers a range of advantages, it also comes with certain limitations that potential users should consider:

• ETF-Exclusive Platform: InvestEngine focuses solely on Exchange-Traded Funds (ETFs), limiting the investment options for clients seeking long-term gains from individual company stock investments. Investors with a preference for direct stock ownership may find this constraint restrictive.
• Limited Account Support: Despite providing various account types, InvestEngine does not currently support Lifetime ISAs or Self-Invested Pension Pots (SIPPs). This limitation may impact users with specific tax-efficient savings goals.
• Absence of Tiered Services: InvestEngine lacks tiered services tailored for high-net-worth investors. Clients with substantial investment portfolios may find the absence of premium services or differentiated offerings a drawback.
• No Personal Pension Option: The platform does not currently offer a personal pension (Self-Invested Personal Pension - SIPP), limiting the choices for users looking to incorporate pension planning into their investment strategy.
• Ethical Managed Portfolios: InvestEngine does not provide ethical managed portfolios, potentially limiting choices for socially conscious investors who prioritize sustainable and ethical investment options.
• No Junior ISA or Lifetime ISA: As of now, InvestEngine does not offer Junior ISA accounts for saving on behalf of children or Lifetime ISAs for individuals saving for their first home with a government bonus. Users with specific savings goals in these categories may need to explore alternative platforms.
• Flat Fee Structure: InvestEngine employs a flat fee structure, meaning that fees do not reduce with larger investment amounts. While this may not be a significant concern for some investors, others may prefer platforms with tiered pricing that offers cost advantages for higher investment volumes.
• £100 Minimum Investment: While the £100 minimum investment aligns with other robo-advisors, some competitors in the market may have lower minimum investment requirements, providing more flexibility for users with limited initial capital.
• Limited Investment Options: Currently, InvestEngine does not support investment in investment trusts or unit trusts, although plans for inclusion are in place. The absence of these options may impact users seeking a broader range of investment vehicles

InvestEngine Customer Reviews Overview

InvestEngine enjoys a highly favorable reception from its user base, with a notably high TrustPilot score and positive feedback across various platforms.

• TrustPilot Rating: InvestEngine boasts an impressive TrustPilot rating of 4.5 out of 5, based on 900 reviews. This stands out in the financial services sector, where companies often face challenges in achieving high customer satisfaction. The positive reviews highlight InvestEngine's exceptional customer service and overall user experience.
• App Store Ratings: The InvestEngine app receives high ratings from users, with a score of 4.8 stars in the App Store and 4.5 stars in the Google Play store. These ratings underscore the platform's user-friendly interface and the perceived value it provides to investors.
• User Feedback on TrustPilot: TrustPilot reviewers have given InvestEngine a 4.5 out of 5 "excellent" rating, with specific praise directed towards the platform's user interface and the perceived value it offers. As of December 2023, investors express satisfaction with their overall experience on the platform.
• Finder User Reviews: InvestEngine maintains a solid score of 4.2 out of 5 in user reviews provided to Finder. This positive feedback is indicative of user satisfaction, particularly in relation to the platform's features and performance.

Overall, the consistently high ratings and positive comments from users emphasize InvestEngine's success in delivering a positive and satisfying experience for its clients. The commendations for customer service, user interface, and overall value contribute to the platform's favorable reputation among investors.

InvestEngine Verdict

InvestEngine emerges as a game-changer in the DIY investment landscape, offering a compelling combination of innovation, cost-effectiveness, and user-centric features. With a unique proposition of no platform fees on DIY portfolios and a minimal 0.25% fee on managed portfolios, InvestEngine stands out as the epitome of low-cost investing. The platform's extensive range of over 500 ETFs provides unparalleled choice to investors, complemented by a user-friendly mobile app and website.

Stellar customer service further enhances the overall investing experience. While limitations, such as the absence of certain ISA options and a personal pension feature, exist, InvestEngine's future plans and ongoing evolution position it as an exciting and competitive player in the market.

In conclusion, InvestEngine earns a resounding 5 stars, reflecting our strong endorsement and recognition of its outstanding value in the investment sphere.