MARIANNA HUNT MILLENNIAL INVESTOR

When I started to invest just over a year ago I had a choice to make: would I do things myself or hand my money over to an adviser or a robot to manage it for me?

I went for the DIY approach. I’d prefer to understand how things work rather than blindly trusting someone – or something – else.

Maybe I’m an anomaly in that respect. More than a million people now save via apps where a robot decides how to invest for you. These services claim to charge lower fees than traditional human advisers and allow you to start investing even if you don’t have thousands of pounds.

Most offer “ready-made” portfolios with different percentages of stocks and bonds. You simply pick the one that suits you best. Some also tweak these percentages throughout the year, while others offer fully fledged “robo-advice”. They ask you a few questions about your goals and then let the cyborgs work their magic.

Now I’m all for new technology that gets young people investing, but, without robots, I’ve gone from not knowing what an equity is to picking seven funds for my portfolio. If I had put £1,000 in each in Jan 2019, my Isa would have been worth £8,890 by the end of the year, adding an extra £1,890 (or 27pc) to my savings. That’s after all the fees I’d have paid to my fund managers and Isa provider and the costs of buying those funds. Not bad for a first-timer, eh?

It’s also much better than most of the ready-made portfolios on these apps. One of them, Nutmeg, offers five fixed portfolios. My investing strategy probably falls somewhere between its “growth” and “adventurous” options. These returned around 18pc and 21pc respectively over 2019. Another, Wealthify, returned just 17pc with its “adventurous” portfolio. The figures also take all fees into account.

Some providers charge a flat fee while others charge a percentage, which makes comparing difficult. Moneybox and Plum charge £1 a month – although the first three months are free with Moneybox and first one free with Plum. But if you can afford to invest only a small amount, these charges quickly stack up. This doesn’t sit right with me, as these apps sell themselves on making investing accessible to those without much to save. Investing £1,000 with Moneybox at the start of 2019 then £50 a month after that would have made you a gain of 20pc by the end of the year. Doing the same with Plum you’d have made 19.6pc, taking all fees into account. But if you weren’t lucky enough to have that initial lump sum and were investing £50 a month, the

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telegraph.co.uk/ investornewsletter charges would make a much bigger dent in your returns. With Moneybox you would pay £9 a year, or £11 with Plum. That’s the equivalent of being charged 1.5pc or 1.8pc for your Isa and comes on top of the platform fees and fund fees (a total of around 0.65pc with Moneybox or 0.53pc with Plum).

My approach has not been too complicated: all it took was a bit of research and I’ve gained a lot besides profit. I’m more conscious of what I’m doing with my money and have a better understanding of economics.

This is important. Most robots and apps can’t help you set financial goals or reassure you that you should keep investing regularly even when stock markets crash – two things that I’ve picked up along the way. Human instinct would tell you that when markets are tumbling you want to pull your money out. But read even

Young people are flocking to apps that claim to make investing more accessible. But does this mean they sacrifice returns? 27pc Average return of Marianna’s seven funds in 2019 after all fees

Without using a robot, I’ve gone from not knowing what an equity is to picking seven funds

the most basic investing guides and you will know that that is the time to find some of the best bargains.

Bots can tell you where to invest, but most cannot tell you not to invest at all. OpenMoney, a hybrid app that combines portfolios with human advice, has to tell around 80pc of the people who want to start investing with it not to, because they are not in a financial position to do so – usually because they are paying off debts or don’t have any rainy day savings.

You should try to get at least a basic understanding of investing before you get stuck in and not just put your trust in machines and formulas.

So will you find yourself asking “Alexa, what stocks should I buy today?” in the not-so-distant future?

Maybe. But maybe not.

Marianna’s picks have beaten the bots