In this fintech enabled financial world, it feels like a new app or product launches every day.
But when they all appear to do the same thing on the face of it, how can we choose between them?
In response to demand for more guidance on how to choose between different products, Good With Money has introduced ‘need to know’ product and provider reviews.
The first is about Wombat – a new investment app aimed at younger, newbie investors that lets you choose a portfolio based on your personality and the brands you love.
The deal
Wombat Invest is a new app that aims to make investing accessible to the masses. Investing is often seen as complicated and costly, which puts many people off – but Wombat aims to change that. You can download the app in a few minutes and get investing from just £10.
Wombat allows investors to trade for free, and as easily as possible, in companies that match their lifestyles, interests and beliefs. There are two account options including an Isa or a general investment account and investors have 15 themes to choose from, with each one being made up of a single exchange-traded fund.
Since launching in Summer 2019 the app has acquired over 5,000 investors. The London-based startup, which is on the NatWest Accelerator Fintech Programme, has just launched its second equity crowdfunding campaign to raise £200,000. This follows an initial crowdfund in 2018 that raised £210,000 from around 490 investors.
Wombat plans to use the funds to make product improvements, launch and market new funds and build its customer financial education programme.
User-friendliness
The whole idea of Wombat is to make investing as simple as possible. With this in mind, it has grouped investing packages into snappy-sounding themes to match your lifestyle. Investors can choose from 16 themed funds including ‘The Social Media Guru’, ‘The Foodie’, ‘The Goodies’ and ‘The Green Machine’.
There is also the option to auto-invest a certain amount each month. A nice addition to the app is the ‘round-up’ function, which links to your bank account. This automatically rounds up all your purchases to the nearest pound and pays the accumulated money into your Wombat account every two weeks.
Sustainable investing option
Wombat’s themed fund ‘The Goodies’ enables you to invest in businesses that score highly on ESG (environmental, social, and governance) metrics. These evaluate a company’s ethical impact on its workers and the world around it. However, among the brands listed under this theme are global giants Starbucks, Nestle and Barclays, which would not be considered as sustainable choices for many.
Unique selling points
Wombat makes investing simple enough for the novice or younger investor. The chance to try out investing for free (until your pot reaches £1,000) is also a big draw for those just starting out.
The app even has a Learning Hub where you can find helpful ‘how-to’ articles and tips to improve your investing knowledge.
Its developers are also working on a Wombat Junior App, which will allow those under 18 to invest, and Wombat Gift, which will make it possible to offer an investment as a gift.
Another great feature (which is quite rare for investing apps) is the chance to do ‘Fractional Investing’. This means that instead of having to wait until you have enough money for one fund, you can invest in a fraction of it – enabling you to invest no matter how little money you have.
The plus points
The biggest plus of Wombat, which cannot be underestimated, is that it makes investing simple, convenient and cost-free for beginners. It cuts out all the usual jargon that acts as a barrier to investing for so many. There is also no cost for giving it a go and – unlike many of its competitors – you don’t have to pay for additional features.
Any drawbacks?
Wombat does not currently offer investments in individual stocks (although this is in the pipeline). Also the fee once you reach £1,000 is a little on the high side and might put people with bigger pots off. Having said this, the fee includes the use of an ISA, which other apps often ask you to pay extra for.
Wombat’s option for sustainably-minded investors “The Goodies” contains big brands like Barclays, which is currently under pressure from the UK’s biggest pension fund Nest on its continued financing of fossil fuels, and Nestle which is under scrutiny in a new Channel 4 documentary over the use of child labour by one of its offshoots Nespresso.
Cost of use
The app is free to use until an investor’s account value reaches £1,000. After that, you’ll be charged £1 per month plus a 0.45 per cent of the value of their investments.
Other options
Similar apps worth considering are:
Are there any providers you desperately want us to go deeper on? Let us know here.
