Revolut Robo-Advisor Reviewed - Does AI Investing Work?

Today, I'm excited to dive into Revolut's newest feature: the robo-advisor. Supposedly, it simplifies your investment journey significantly. For some context, I've been an avid Revolut user for many years, having lived in different countries where the app’s features, like free currency exchange, were lifesavers. I’m also on the Revolut Ultra plan and use the app for daily banking needs. Although I initially started investing with Revolut, as I became more educated in finance, I found better options and now don’t recommend Revolut for investments. However, their new robo-advisor feature has garnered a lot of interest, and today, I’ll provide my unbiased review. Remember, this isn’t investment advice, just my perspective.

Getting Started with Revolut's Robo-Advisor

To begin, download the Revolut app and sign up. After logging in, you'll see an "Invest" option at the bottom. Navigate to it, and you'll notice the revamped Revolut 10 interface, which prominently features their investment services.

Previously, one of the downsides of investing with Revolut was their monthly portfolio fee, which they’ve since removed. However, they still don’t allow users to transfer portfolios to other brokers, a significant downside if you want flexibility. Additionally, Revolut's trading fees vary by plan. For instance, the Ultra plan at €45/month offers 10 free trades, but any additional trades incur fees.

The Robo-Advisor Process

Now, let’s delve into the robo-advisor feature. This section will take you step-by-step through the setup and how it tailors the investment portfolio to your preferences.

Initial Steps:

Goal Selection: Choose your investment goal (e.g., building wealth, retirement).
Investment Horizon: Decide how long you plan to invest (e.g., 2-5 years, over 10 years).
Experience Level: Answer questions about your experience and the total amount you've invested in the past 12 months.
**Risk Assessment:** Determine how you’d respond to a 20% decline in investments, and rate your overall risk tolerance.

Portfolio Recommendation: Based on your answers, the app recommends a portfolio type:

Core: Balanced bundle with medium risk.
Slow and steady: Focused on low risk and returns.
Defensive: Very low-risk investments.
Bold stack: High-risk, high-reward strategy.

The app outlines allocations (e.g., 50% stocks, 48% bonds, 2% cash) and provides simulated past performance, although keep in mind that past performance isn’t a guarantee for future returns.

Fees and Alternatives

Revolut charges 0.75% per year for managing your portfolio. While this may seem minimal, in the long run, it significantly cuts into your returns. For example, paying 0.075% versus Vanguard’s 0.07% results in a substantial fee difference over 20 years.

Alternatives:

Trading 212: Offers a similar "Pi" feature where you can manage your investments with no annual fees.
ChatGPT: You can also use AI tools like ChatGPT to create a tailored investment strategy, often providing smarter and better responses at no cost.

Why Revolut May Not Be for You:

High fees for basic ETF investments.
Inability to transfer portfolios to other brokers.
Limited asset options (e.g., no crypto investments).

In conclusion, while Revolut’s robo-advisor might suit absolute beginners, its fees and restrictions make it less attractive for more seasoned investors.

Keywords

Revolut
Robo-advisor
Investment
Trading fees
Portfolio transfer
ETFs
Trading 212
AI tools
ChatGPT

FAQ

Q: What is Revolut's robo-advisor feature? A: It's an automated investment service designed to simplify investing by managing a portfolio tailored to your goals and risk tolerance.

Q: How much does Revolut charge for its robo-advisor service? A: Revolut charges a 0.75% annual fee to manage your investment portfolio.

Q: Can I transfer my Revolut investment portfolio to another broker? A: No, Revolut doesn’t allow portfolio transfers to other brokers, which can be a significant limitation.

Q: What does the portfolio allocation typically include? A: Depending on your risk tolerance, it is usually a mix of stocks, bonds, and a small percentage of cash.

Q: Are there better alternatives to Revolut’s robo-advisor? A: Yes, options like Trading 212 offer similar automated investment features without the annual fee, and AI tools like ChatGPT can help create a personalized investment strategy.