How to Evaluate a Robo-Adviser When You Still Want Someone to Blame

A robo-adviser is a regulated online investment service — Nutmeg, Moneyfarm, Wealthify and InvestEngine are the familiar UK names — that assigns you a risk profile from a questionnaire, invests your money into a portfolio of low-cost funds, and manages it from there for a fraction of a traditional firm’s fee. This article is for a particular reader: the professional or couple aged 50 to 68 with £300,000 or more spread across pensions, ISAs and property, standing somewhere in the ten-year run-in to retirement. For that reader, evaluating a robo-adviser is not an app review. It is a decision about where accountability sits in your financial life, and what you are willing to pay for someone to carry it.

The short answer

A robo-adviser will run a sound, low-cost portfolio. It will not take responsibility for the decisions around the portfolio, and at your stage of life those decisions — when to retire, how to fund the years before State Pension age, which wrapper to draw from first, who inherits the pension — are where the money is actually made or lost. On £300,000, a robo-adviser costs roughly £1,350 to £2,850 a year all-in; a human advisory firm costs roughly £2,550 to £5,250. That gap, about £1,800 a year at the midpoints, is the going price for a named, FCA-regulated person who must document why a recommendation suits you and answer for it if it does not.

So the honest evaluation is not “robo or human”. It is: which parts of your plan genuinely need a human to be answerable, and which parts are portfolio management you would be overpaying for under a human label. For most households I work with, the answer is a hybrid. The rest of this article is how to test that for yourself.

What a robo-adviser actually does — and what it quietly doesn’t

The mechanics are simple and, in the main, good. You answer 15 to 30 questions about your goals, timeline and capacity for loss. The service assigns you one of its model portfolios — typically low-cost tracker funds — and manages it from there: rules-based rebalancing, dividend handling, an annual prompt to review. All-in costs run from about 0.45% to 0.95% a year including fund fees. For the job of holding a sensibly spread portfolio, that is a fair price, and at the lower end a very good one.

What the questionnaire cannot see is everything that matters at your stage. It will not ask about your defined benefit pension, your spouse’s wrappers, your intended retirement date, your parents’ care situation, or what you want your children to inherit. It cannot tell you that spending the ISA before the pension might save several thousand pounds in tax across the bridge years, or that your pension’s death benefits deserve attention before April 2027. A questionnaire prices your attitude to risk. It does not price your life.

One distinction to pin down first: advice versus guidance. Some robo services give regulated personal recommendations — advice, with the documentation and recourse that implies. Others offer guidance plus discretionary management, where the firm runs the portfolio but never recommends a course of action to you personally. Ask in writing which you are getting, then verify the permissions yourself on the FCA’s Financial Services Register. Two minutes there shows exactly what a firm is authorised to do — and, more tellingly, what it is not.

What “someone to blame” is actually worth

Let me defend the instinct first, because it is more rational than it sounds. “Someone to blame” is shorthand for recourse. A named person, regulated by the FCA, bound by the Consumer Duty that has applied to retail financial services since July 2023, required to produce a suitability report explaining in writing why a recommendation fits your circumstances. If the recommendation was wrong, you complain to the Financial Ombudsman Service, which can award up to £445,000 for complaints about events from 1 April 2025. If the firm fails, the FSCS protects up to £85,000 per person per authorised firm. A robo-adviser that gives regulated advice sits inside the same architecture minus the human relationship — which is precisely what you must price.

Now the uncomfortable truths, in both directions. First: no adviser, human or otherwise, is accountable for markets falling. A 20% fall needs a 25% gain just to draw level, and no complaint route exists for a bad market. What a human is accountable for is the plan around the market: the withdrawal rate set before the fall, the cash buffer that meant you were not selling equities to pay the bills, the phone call in month four that talked you out of turning a paper loss into a real one. Vanguard’s long-running Advisor’s Alpha research put the average value of advice at about 3% a year and attributed most of it to that behavioural work, not fund selection.

Second, equally uncomfortable: the wish for accountability is also how people end up paying 1.5% a year for what is functionally a model portfolio with an annual review letter. If the human’s real work — sequencing, tax planning, the family conversations — is thin, you have bought comfort, not accountability. The instinct is sound. The price deserves scrutiny.

The maths on £300,000

Numbers first, adjectives after. What the two models typically cost on a £300,000 portfolio:

Annual cost on £300,000	Typical robo-adviser	Typical human advisory firm
Platform / management fee	0.35%–0.75% (£1,050–£2,250)	0.20%–0.45% (£600–£1,350)
Advice fee	Included above	0.50%–1.00% (£1,500–£3,000)
Fund costs	0.10%–0.20% (£300–£600)	0.15%–0.30% (£450–£900)
All-in	0.45%–0.95% (£1,350–£2,850)	0.85%–1.75% (£2,550–£5,250)

At the midpoints — £2,100 for the robo, £3,900 for the human — the gap is about £1,800 a year. Left invested rather than spent over a 25-year retirement, that compounds to roughly £85,000 at a 5% return. That is the budget you either keep or spend, and it is large enough that “spend it well” becomes the whole game.

What the extra fee has to buy is not performance. A human adviser holding index funds will not beat the same funds on a robo. The fee buys decisions: the order in which you draw from pension, ISA and general investment account — each taxed differently, and sequenced badly at real cost every single year; the size and location of the cash buffer; the withdrawal rate that flexes in bad years; the plan for the six or seven years between your retirement date and State Pension age, which is 66 now and rises to 67 between 2026 and 2028 for those born from April 1960. If you are not receiving that work, you are not receiving £1,800 of value, whatever the review letter says.

Five tests before you move a pound

1. Advice or guidance? Get the answer in writing before you fund an account, and verify the firm’s permissions on the Financial Services Register. If it is guidance, you keep the decisions and the responsibility. If it is advice, ask who signs the suitability report and what the complaints route looks like. A firm that hesitates at either question has answered it.
2. Can it run money out, not just in? Accumulation is the easy half. Ask specifically about flexible drawdown or uncrystallised funds pension lump sums (UFPLS), monthly withdrawals, whether two years of income can be parked in cash, and who watches your tax-year position. Vague answers mean the service was built for 35-year-olds — nothing wrong with that, but you are not 35.
3. Will it take your pension, and should it? Two dated points. Any transfer of safeguarded benefits worth £30,000 or more requires a personal recommendation from an adviser holding pension transfer permission; no mainstream robo service offers that sign-off, so if a defined benefit scheme forms part of your £300,000, part of your planning sits outside their reach by law. And the normal minimum pension age rises from 55 to 57 on 6 April 2028; if you were born on or after 6 April 1973, your earliest access date moves with it. Know your date before you commit a pension anywhere.
4. Who holds the death-benefit paperwork, and who talks about it? From 6 April 2027, unused pension funds and death benefits are due to be brought within your estate for inheritance tax, with scheme administrators reporting to HMRC. Your expression-of-wish form and any nominee arrangements quietly decide outcomes that used to sit outside the tax net. A robo platform will hold the form; it will not sit with your children and talk through care funding and gifting. Decide who has that conversation while it can still be a conversation rather than a formality.
5. What does leaving cost? Exit fees are mostly gone, but re-registering ISA or pension holdings typically takes two to six weeks, and moving a general investment account can crystalise capital gains — the annual exempt amount is £3,000, low enough that a careless transfer creates a tax bill that never needed to exist. Ask about both before you sign, not after.

The hybrid most couples settle on

In practice, most households I advise in your position unbundle the two jobs. The ISAs and general investment accounts sit on a low-cost service doing portfolio management at 0.45% to 0.9%. The pensions, the retirement-date decision, the bridge to State Pension age, the withdrawal sequencing, the 2027 inheritance tax review and the family conversations sit with a human adviser — often on a fixed fee of £2,000 to £4,000 a year rather than a percentage of everything. Done that way, the all-in cost lands near 0.7% to 1.0% across the estate, you keep most of the fee gap, and the person you might one day need to blame is the same person whose judgement you are actually paying for.

Two related reads if this is where you are: our guide to evaluating an adviser before you switch, and the piece on funding the bridge between early retirement and State Pension age.

What to do, and by when

Three dates for the diary, none a cause for alarm this week. First, if a move is on your mind, run the five tests and get fee schedules in writing before signing anything; the comparison is only honest on paper. Second, 6 April 2027: if the pension inheritance tax change lands as scheduled, the years before it are the cheapest planning window you will ever have — review the expression of wish and each spouse’s position before then, not after. Third, 6 April 2028: the pension access age steps up to 57, and anyone in your family born from April 1973 should check their own date now.

A robo-adviser is a good answer to a narrow question: who will hold my portfolio sensibly and cheaply? It is a poor answer to every other question you are about to face. Evaluate it on that basis, pay humans only for the work only humans can do, and the instinct to keep someone accountable will have done its job — quietly, and without costing you tens of thousands you could have kept.

Frequently asked questions

Is my money safe if a robo-adviser goes bust?

Your assets are held in custody, legally separate from the firm’s own, so a business failure does not put the holdings themselves at risk. What the FSCS covers is shortfall caused by failure or wrongdoing — up to £85,000 per person per authorised firm. Market falls are covered by no one, at any firm.

Can I take a robo-adviser to the Financial Ombudsman?

If the service gave you a regulated personal recommendation, yes, on the same terms as a human firm — awards of up to £445,000 for complaints about events from 1 April 2025. If it provided guidance rather than advice, your route narrows to how the service was run, not whether the outcome suited you. This is the single most important thing to establish before you fund an account.

What is the difference between guidance and advice?

Guidance explains your options without recommending one. Advice is a personal recommendation that must be suitable for you, documented, with recourse if it is not. For free guidance on defined contribution pensions at 50 and above, Pension Wise is the state service worth using first.

Should I move my pension to a robo-adviser before retiring?

Usually not as a first move. Your pension is the wrapper carrying the 2027 inheritance tax change, the 2028 access-age step-up, tax-free cash planning and drawdown sequencing — precisely the questions a questionnaire cannot handle. If the pension is your largest asset, start with the planning conversation, then decide which platform the money should sit on.

Can a robo-adviser help with inheritance tax or care costs?

No. Those are legal and family conversations — wills, lasting powers of attorney, gifting, care funding — that the service neither leads nor joins. But the paperwork a robo holds, particularly the expression-of-wish form, will decide a share of the outcome anyway. Read it yourself, whatever else you delegate.