INVESTENGINE REVIEW

Investengine Review

In the forever changing finance world, new platforms are continuously starting up which challenge traditional investment methods. One of these platforms is InvestEngine, which has been generating a lot of recent conversations. 

This comprehensive review aims to shed light on the platform, helping you to understand its mechanics, benefits, and potential disadvantages. After this article, you will be aware of the platform’s background, its main features, its comparison to other providers, and user experiences. 

This will assist you when making informed decisions about whether InvestEngine aligns with what you need in your investments.

InvestEngine is regulated by the Financial Conduct Authority and covered by the Financial Services Compensation Scheme, offering both managed portfolios and DIY portfolio services. 

With a wide range of investment options, low fees, and a minimum investment threshold, this investment site has become an attractive option for investors from all backgrounds.

Table of Contents

Background to InvestEngine

InvestEngine was founded in 2018 by Simon Crookall, who previously founded Gumtree. The platform aims to make investing accessible to anyone, irrespective of investment experience. 

To do this, they offer both managed portfolios and the opportunity to build your own DIY portfolios. As of 2023, InvestEngine manages over £800 million in assets and has over 25,000 clients.

InvestEngine’s approach is rooted in the principles of diversification of investments and low costs, therefore minimising risk and maximising potential returns. It primarily uses exchange-traded funds (ETFs) in portfolios, permitting a wide spread of asset classes. 

It is necessary to recognise that InvestEngine places a high priority on the safety and security of its customers’ investments. 

The platform is regulated by the Financial Conduct Authority, providing a certain level of assurance for their investors. In case of their insolvency, investments are safeguarded up to £85,000 by this scheme.

InvestEngine offers a broad scope of account types, catering to many versatile investment needs. This includes a general investment account, a stocks and shares ISA, business account and personal pensions.

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InvestEngine Fees

InvestEngine offers two main services, which are managed and DIY portfolios. The managed portfolio service provides choices between growth or income portfolios. 

Whilst the growth portfolio aims for capital growth, the income portfolio aims to generate a regular income through dividends. 

For investors with more experience, a DIY portfolio service is available. This involves creating your own portfolio by selecting individual stocks and ETFs. The DIY service is free of account fees, meaning that investors only pay costs associated with the chosen ETFs.

Here is a summary of InvestEngine fees for UK investors:

  • £0 account fee for Investor Account
  • £100 annual account fee for ISA account
  • £1.50 trading fee per UK share trade
  • £0.99 trading fee per ETF/fund trade
  • No trading fees for regular monthly investments
  • £12.50 annual inactivity fee if account is inactive for 18+ months
  • 0.15% currency conversion fee when you buy and sell in a foreign currency. 
  • £5 withdrawal cash fee
  • 0.30% annual management fee for managed portfolios
  • No account fee for DIY portfolio service

If you invest in funds on this platform, these will come with their own ongoing fees  which are charged by the fund manager. 

In comparison to some other UK platforms, InvestEngine offers low trading fees. However, investors need to factor in the other charges involved.

Furthermore, InvestEngine also offers the unique feature of fractional investing. This allows investors to buy a fraction of an ETF unit, therefore further diversifying their portfolio with a smaller investment. 

This type of investing, along with the low minimum investment of £100, makes InvestEngine an attractive option for those starting out on their investment journey.

Features and Benefits of InvestEngine

To provide convenient access, InvestEngine offers a mobile app alongside its web platform. Its accounts can be set up as Joint Accounts, allowing two people to manage investments together.

InvestEngine’s most prominent feature is its combination of managed portfolios and DIY portfolios. This is a flexible offer which allows investors to choose a hands-off approach, or seek independence on their investments. 

Moreover, the platform uses advanced technology to manage portfolios. This means that it continuously monitors and balances portfolios to ensure they stay aligned with the investor’s risk tolerance and investment priorities. 

This makes the focus of investments on long-term prospects, and reduces stress of managing them yourself. 

InvestEngine also offers a wide range of investment options. This includes more than 500 ETFs, covering various asset classes, geographies, and sectors. This wide choice allows investors to build up diverse investments which are tailored to their individual preferences.

Background to InvestEngine

Comparing InvestEngine to Other Platforms

In comparison to other platforms, InvestEngine stands out for budget-friendly fees and flexibility. For instance, many other platforms charge higher management fees and additional transactional costs. 

In contrast, InvestEngine’s fee structure is simply understood, making it an attractive option for those cost-conscious when investing.

The option of choosing between a managed and a DIY portfolio also sets InvestEngine apart from different providers. 

This range of options allows investors to take control of their investments or alternatively, opt for a more managed approach. Therefore, this will depend on their confidence and experience.

However, unlike some more established platforms, InvestEngine does not currently offer specific account types like the Lifetime ISA or Junior ISA. Instead, investors looking for these specific account types may need to look to other platforms.

"InvestEngine offers a broad scope of account types, catering to many versatile investment needs. This includes a general investment account, a stocks and shares ISA, business account and personal pensions."

User Experience with InvestEngine

InvestEngine customer reviews praise its interface for being user-friendly, and offering a wide range of investment options. For example, the option to choose between a managed portfolio and a DIY portfolio has been especially well-received in reviews. 

The company also receives positive feedback for their customer service and support team, in which they respond promptly and in a professional manner. 

This responsiveness enhances the overall user experience with the company, with positive reviews highlighting InvestEngines commitment to providing a quality service to its customers.

However, some users have reported that there could be more educational resources on offer. This would help new investors to understand investing better. Additionally, some users would like to see even more account types, like a Lifetime ISA or Junior ISA.

Despite this discourse surrounding the company, it’s essential to consider your individual circumstances and investment goals before making a decision. 

This should be applied to investing with any platform. Make sure you conduct your own research into different investment options before launching into a decision.

DIY Portfolio

InvestEngine is unique as it allows its users to build their own investments. This feature, commonly known as the DIY investment portfolio, is great for more experienced investors who prefer to have more control over their investments. 

This is because it allows them to select individual stocks and EFTs. Consequently, this customisation offers an opportunity for investors to make their investment decisions based on personal circumstances and market fluctuations.

Investments held within an InvestEngine ISA can potentially grow tax-free, avoiding capital gains tax. However, it’s crucial to note that tax treatment depends on individual financial situations and may change in the future.

InvestEngine’s platform makes it simple to add funds, sell assets, or view investment projections for your portfolios. 

This can help you to analyse your portfolios and make informed decisions for future investments. However, one must bear in mind that past performance is not reliable in indicating future results.

Understanding InvestEngine Fees

InvestEngine is known for being one of the cheapest investment platforms, offering low cost options in its different account types. This makes it attractive for DIY investors, and the fee structure is transparent, with no hidden costs or set-up fees.

For the managed portfolios, InvestEngine charges a 0.25% annual fee. Alternatively, the DIY portfolio service has none. Instead, investors only need to cover costs associated with the ETFs chosen. 

This fee structure makes InvestEngine appealing for investors looking for cost-effective investment solutions to build their diversified portfolio.

However, while InvestEngine’s fees are low, investing always comes with a certain level of risk. The value of your investments can go down as well as up along with the market, and you may get back less than you put in. 

Therefore, it’s a good idea to seek professional investment advice if you’re unsure about any aspect of your investments.

Investing for Businesses

InvestEngine does not only cater to individual investors, but also to businesses due to its inclusion of a business account. This allows investments of business’ surplus cash provision which sets InvestEngine apart, as not many platforms offer this service.

The InvestEngine business account operates similarly to individual accounts, choosing between managed portfolios and a self-managed portfolio. This flexibility allows businesses to invest based on their own risk tolerance and financial goals and circumstances. 

Additionally, businesses can easily add funds to their account whenever they have surplus cash which they want to invest. 

Although InvestEngine provides the platform, it does not offer personalised investment advice to businesses. Therefore, it is recommended to speak with an independent financial adviser. 

The value of investments can fall as well as rise, and businesses may get back less than they invested, just as with individual accounts.

InvestEngine Stocks and ISA

InvestEngine provides ranging investment options, including individual stocks and or a exchange traded fund. These options are available to all accounts, allowing the creation of diverse portfolios based on your own risk preferences or how much they want to invest.

InvestEngine also offers a Stocks and Shares ISA. This account type can receive investments of up to £20,000 per year without tax. These may also potentially grow tax-free, although tax treatment depends on personal circumstances.

For investors seeking tax-efficiency, InvestEngine’s stocks shares ISA is a popular choice. However, like any investment account, there is always a level of risk. 

This is because the value of your investments can go up and down with the performance of your stocks, and you may get back less than you originally invested. 

Because of this, it’s important to understand the risk InvestEngine and other investment platforms pose before you start investing.

User Experience with InvestEngine

Case Study 

To bring this InvestEngine review to life, let’s look at a real world case study. 

This example should resonate with those considering an investment platform for the first time, investors weighing up the advantages and disadvantages of self-managed portfolios, or even business owners considering investing their extra cash.

Our case study involves Jane, a small business owner in the UK. Jane has been successful in her business, and she has some surplus cash which she wants to invest. 

After researching various platforms, she finds InvestEngine suits her needs, due to its low cost platform fees. Therefore, she decides to open an InvestEngine account.

Jane appreciates the flexibility of this cheapest investment platform. She has some investing experience, so she opts for a self-managed portfolio. This allows the choice between individual stocks and ETFs, providing control over her investments.

Jane also opens an ISA with the platform. This allows her to invest up to £20,000 per year, with any returns coming tax-free. This tax-free investing is attractive to Jane, as she is always looking for ways to maximise her returns.

Jane also appreciates the safety that comes with InvestEngine, being covered by FSCS. Consequently, this provides her with peace of mind.

After a year, Jane’s investments have performed very well. She received dividends from some of her investments, as well as  qualifying for an investment bonus. 

However, she is aware that there is some tax on her dividends. This differs from her capital growth, which is tax-free within her ISA.

This example shows how an individual can use InvestEngine to manage investments effectively. Whether you’re investing individually or in a business like Jane, you will hopefully have gained an understanding of the platform. 

However, always remember that investing has risk involved, and it’s important to consider your personal circumstances and risk tolerance before making any decisions with your money.

Key Takeaways

To wrap up this review, here are some important aspects setting InvestEngine apart as an investment platform. These points provide a concise summary and help potential investors to decide if InvestEngine aligns with their specific needs.

  • InvestEngine offers you portfolios that are either managed portfolios or a DIY service that you can take control of yourself. This will depend on your confidence and experience.
  • The platform allows easy tax-free investing through its ISA. Therefore, you do not have to pay tax on any capital growth, dividend income, or interest earned within this account.
  • InvestEngine charges a dividend tax on any dividends received not part of an ISA, which is important to consider when planning your investment strategy.
  • The platform primarily uses exchange-traded funds (ETFs) in its portfolios. This provides a wide variety across different asset classes to choose from,consequently promoting diverse investments
  • InvestEngine provides a user-friendly platform where investors can easily manage their portfolios, view investment projections, and make informed investment decisions all online.
  • The platform is considered safe by its customers, as it is regulated by the Financial Conduct Authority and covered by the Financial Services Compensation Scheme.
  • InvestEngine offers a personal pension, providing tax-efficiency when saving for retirement.
  • Investing always involves risks. This is because the performance of your investments can go up and down, and you may get back less than you originally put in. If you’re unsure about any aspect of investing, always consider seeking advice from a professional financial adviser.
  • InvestEngine has a simple set-up process with no hidden or set-up fees, which can appeal to fee-conscious investors.
Investing for Businesses

FAQ

1. How does a self-managed portfolio work on InvestEngine?

A self-managed portfolio on InvestEngine offers investors the freedom to select their own individual stocks and ETFs. This gives experienced investors complete control over their investments, allowing them to make decisions based on investment knowledge and market understanding. 

Therefore, a self-managed portfolio is a great way to tailor your investment strategy to align with your financial goals.

However, managing your own portfolio requires excellent understanding and experience of working with the stock exchange and investment services. Also, while a self-managed portfolio doesn’t incur account fees from InvestEngine itself, there are costs associated with the ETFs you choose. 

This makes it a good idea to factor in these costs when calculating potential returns and overall gains.

2. Is tax-free investing possible with InvestEngine?

Yes, tax-free investing is possible with InvestEngine through their Individual Savings Account (ISA). This means that you don’t have to pay any tax on capital growth, dividend income, or interest earned within this account. Rather, all the money you earn from your investments in an ISA is yours to keep.

However, bear in mind that the tax treatment depends on individual circumstances and may change in the future. To understand the implications for your account fully, you should consult a financial advisor or tax specialist.

3. Is InvestEngine safe for customers?

InvestEngine is regulated by the Financial Conduct Authority and is covered by the Financial Services Compensation Scheme (FSCS). 

Consequently, this offers some degree of assurance and security to its users. In the event of the company’s insolvency, investments are protected up to £85,000 by the FSCS.

However, like all investments, InvestEngine portfolios come with risk,  due to the fluctuating market. It’s important to know this before making any big investment decisions.

4. Are there any set up fees with InvestEngine?

InvestEngine customers praise the platform for its transparency and affordability, coming with no hidden costs or set-up fees. Therefore, this can make it very attractive for investors.

For the managed portfolios, InvestEngine charges a 0.25% annual management fee. Contrastingly, the DIY portfolio service incurs no account fees, and investors only pay the costs associated with the ETFs they have chosen. 

Consequently, this easy to understand and competitive fee structure is a significant advantage of the platform.

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