[AD - this blog post is sponsored by Wealthify]

💸 Do you feel paralysed when it comes to getting started with investing? Are you afraid of taking the plunge? Have you wondered whether it’s worth investing in the current economic climate?

To help us answer these questions, Emilie Bellet sat down with Michelle Pearce-Burke, Co-Founder and Chief Strategy Officer at Wealthify, an investment platform with a simple mission: to make investing accessible to anyone. Michelle began her career as a stockbroker for a boutique firm in Guernsey, but she believed that investing should be available to everyone (and not just the wealthy). This led to her launching Wealthify in 2014, at the age of just 25.

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what is wealthify?

• Wealthify is very much the opposite to DIY investing. It's all about, ‘come to us, tell us how much you want to invest (which can be as little or as much money as you want*) and we'll invest that in the markets for you.’ Wealthify makes all those difficult decisions about when to buy investments, when to sell them, and how long to hold them for — all while making sure you pay a very low price, too.

• Wealthify doesn’t provide financial advice, so they can’t tell you how much risk to take or how much money you should be putting in when investing. Instead, it is very much about managing your portfolio for you, which is often the most difficult and complex part. Even if someone knows what they want to invest in right now, this might not necessarily be the right decision in a month's, a year's or even five years’ time. This is why Wealthify keeps an eye on the news and markets and makes changes to your Plan as and when needed.

• The way Wealthify manages their customers’ money is by investing it into a portfolio of funds. Funds are pools of investments, and they choose low cost ones where possible. Wealthify will then combine and manage them to ensure you are invested in a diverse range of countries and sectors to help spread your risk by not just relying on just one of these to perform well.

• As an example, if Wealthify sees events in a particular country (such as the US, where the markets are really undervalued, so they’d want to invest there) then Wealthify may increase the holding of US investments.

• Wealthify has a team of experts who manage investments all day every day and have years of experience. If you don't work in the sector, then it might be tricky to have the mental capacity to digest the information needed to make the best investing decisions.

  *You can open a Wealthify Stocks and Shares ISA, Junior ISA or General Investment Account with £1. The minimum investment for their Personal Pension (SIPP) is £50.

Onboarding and risk

• The first way to solve the issue with barriers to investing is to have services that break these down in the first place. The way Wealthify does this is by offering affordable fees that work for many people, letting people get started with small amounts of money, and actively removing the jargon when talking about investing to their customers — which is a huge barrier in itself.

• Explaining things very clearly and simply to people in a language that's accessible to them is important. Then, the other barrier that we find people often have in their minds that stops them from investing is this idea of risk and being worried about taking on too much of one. The challenge with that one is that with investing, there is always the risk of losing money — you're never going to be able to totally eliminate it as it’s completely normal for financial markets to go up and down. And this is where education comes in.

• At Wealthify, it’s completely up to the customer how much and how often they invest. When opening an account, you will be asked some questions to give them a sense of how much risk you want to take. Then, Wealthify will do a quick suitability check to make sure that the decisions you've made are sensible for you. Assuming that they are, you will then go through the account opening process online (there’s no need to drop into a branch!), which should take a couple of minutes.

• Like anything in life, you take risks and sometimes good things happen, sometimes they don't. With investing, market performance goes up and down, and if you withdraw your investment during a dip, you’re only cementing your losses and won’t be giving them an opportunity to potentially recover. Plus, there's risk sitting on cash as well. For example, because of inflation, and your money could be losing value over time because you can't buy the same things now that you could with the same amount of money last year.

• The industry, as it stands, often alienates women because it's very much focused on that dialogue around risk. Plus, the amount of jargon that's used makes it very inaccessible. If you're really trying to get a good understanding of investing before you do it, it can be quite off-putting. However, Wealthify has found that more women than men have Ethical Investment Plans with them, showing they want their money to also do good while giving it the potential to grow.

MARKET VOLATILITY and the future of investing

• Meme stocks are far from perfect, but at least they have opened up the conversation around investing. The industry is already extremely regulated with so many layers of disclaimers, creating additional barriers. We need to make it more accessible rather than add more regulation. It would be great if more could be done at a platform level.

• It’s practically impossible to time the market, so just get started if you can afford to — it doesn't matter where you are in the cycle. If you've got a lump sum of money and you're nervous about investing it, you could just spread it out and invest little and often (this is a technique called “drip feed”).

• Or, you could set up a direct debit and contribute on a monthly basis which will average out some of the bumps you might see in the road. Last year was a very tough year for pretty much all markets, and you can’t predict what will happen in the future, so If you’re ready to get started, you might want to consider it.

• The future of investing could be set to get a lot more personalised and focused on ESG (environmental, social, and governance). There hopefully will be a lot more choice when it comes to what to invest in, and more providers are coming out offering different types of services, which means costs could go down - which means we will see more people moving into the investment world.

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Resources

You can follow and connect with Michelle at:

• Wealthify

• Follow Michelle on LinkedIn

*We are not certified financial advisers. The information made available on this podcast is for educational purposes only and does not constitute financial or investment advice. Please remember, stock markets can fall as well as rise and you may get back less than you invested. If you don’t feel confident about making your own financial decisions, please seek independent financial advice.*