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Moneyfarm Review

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In this Moneyfarm review you’ll find answers to many important questions you may have about the company.

We’ll look at Moneyfarm’s fees, products, minimum investment amount and also examine the past performance of their funds. 

Moneyfarm also currently have a cashback offer available for new investors who sign up via this link*! We’ll let you know the full details towards the end of the review.

Finally we’ll look at some UK alternatives to Moneyfarm, to see how they measure up.

Who Are Moneyfarm?

Moneyfarm are a digital wealth manager who started off life in Italy. After fast growth and demand for their service, they launched in the UK in 2011.

Robo-advisors like Moneyfarm* have become very popular in recent years, as they enable people to invest in the stock market in a truly hands-off way and with very low fees attached.

Once you have answered a few initial questions, Moneyfarm will invest your money into a variety of low-cost ETFs. By doing this, they can build a portfolio on your behalf which matches your own appetite for risk.

Moneyfarm’s service is great for those who have little experience investing.

Many experienced investors are also now investing with Moneyfarm too due to the low fees charged and the hassle-free approach. 

Moneyfarm Fees

One of the biggest things which attracts investors to sign up with Moneyfarm* are the low fees charged.

So, what are the fees and how do the company keep them so low?

Moneyfarm’s management fees have recently changed and they now gradually reduce as you invest higher amounts of money.

  • Invest anything up to £10,000 and their management fee is 0.75%.
  • When you invest between £10,000 and £50,000 it’s 0.6%.
  • For £50,000 to £100,000 it’s 0.5%.
  • For anything over £100,000 it’s 0.35%.

You will also need to factor in other costs associated with the underlying ETFs, which average around 0.3% per annum. This is low when compared to investing with a typical wealth manager.

Moneyfarm’s management fee includes all costs associated with the operation of your portfolio. This means that there are no extra trading fees and there are also no setup, withdrawal or exit fees.

Moneyfarm fee structure

How Much Can You Invest With Moneyfarm?

Moneyfarm have a minimum investment amount of £1500 with a £100 monthly investment. Or, you can invest with Moneyfarm with a one off lump sum investment of £5000 or more.

Moneyfarm do recommend that you invest more, however. This is so that they can build a truly balanced portfolio on your behalf.

If you choose to invest via their Stocks and Shares ISA, then remember that your ISA allowance limits will apply.

Moneyfarm Stocks and Shares ISA Review

As we’ve just discussed, Moneyfarm also offer a Stocks and Shares ISA.

The Moneyfarm Stocks and Shares ISA operates in much the same way as their general investment account. The difference is that you can invest up to £20,000 in each tax year without paying income or capital gains tax.

You can open an ISA with Moneyfarm* in less than 10 minutes. You can also transfer an existing ISA to Moneyfarm fees free.

For more on Moneyfarm’s Stocks and Shares ISA fees, scroll back up to the ‘fees’ section of this Moneyfarm Review.

Moneyfarm’s Past Performance

The good news for potential investors is that Moneyfarm are transparent when it comes to their performance. You can easily see how they’ve done on the ‘performance’ page of the Moneyfarm website. They typically show data from the start of 2016 and none of these funds have lost money since that date.

While this is great, it should be noted that the FTSE 100 did suffer a drop prior to this date. With this in mind a longer term look at performance may be beneficial. As a whole, though, it is good to see that Moneyfarm has performed well during some particularly turbulent political events.

Moneyfarm Past Performance

Please note: Past performance is not a reliable indicator of future performance. Investments can rise as well as fall, meaning your initial capital investment could be at risk.

Do Moneyfarm Offer a Pension Plan?

Moneyfarm also offer a pension product in the form of a fully managed Moneyfarm SIPP. 

The fee structure on the Moneyfarm SIPP* works the same as with other Moneyfarm products. You can again view this in in the ‘fees’ section of this review.  

One extra bonus of choosing Moneyfarm for your SIPP is that you will automatically receive your 20% tax relief on investments.

While this effective 25% boost to your investment is available elsewhere, with Moneyfarm you won’t have the problem of dealing with HMRC to claim it. Higher rate and additional rate tax payer will still need to claim via HMRC.

You can also transfer and combine your old pensions with Moneyfarm too.

moneyfarm pension info

Is Moneyfarm Safe?

The good news here is that Moneyfarm are regulated by the Financial Conduct Authority. This means that they are forced to keep client funds separate from their own. Investments are covered by the FSCS (Financial Services Compensation Scheme) for up to £85,000 for extra protection.

Moneyfarm make a point of highlighting that they go to special lengths to protect your personal data by encrypting it.

Moneyfarm Cashback Offer

As mentioned earlier in our review, Moneyfarm have recently launched a cashback offer for new investors who sign up using this link* before the 30th of April 2020. The cashback amounts available are tiered depending on how much you transfer (from an existing ISA) or deposit and these are as follows.

  • Deposit and invest £15,000 for a £75 cashback
  • Deposit and invest £20,000 for a £125 cashback 
  • Deposit and invest £50,000 for a £400 cashback 
  • Deposit and invest £100,000 for a £1,000 cashback

Terms and conditions apply so please be sure that you are happy with these before investing.

Moneyfarm Alternatives

Now that you know all you need to know about Moneyfarm, you might be wondering if there are any UK alternatives to Moneyfarm and also how they compare?

The UK robo-advisor market is growing fast but there are two companies whom you might have heard of already.

Wealthsimple vs Moneyfarm

The first thing to know about Wealthsimple is that they have no minimum investment amount, whereas Moneyfarm do.

Wealthsimple have a simple fee structure, charging a management fee of 0.7% annually on investments up to £100,000. This means that they are more expensive than Moneyfarm if you are investing between £10,000 and £100,000. Moneyfarm charge between 0.5% and 0.6% in this range.

If you invest more than £100,000, then this drops to 0.5%. This is again more expensive then Moneyfarm’s 0.35% on investments over £100,000.

Wealthsimple Currently offer Pension, ISA, JISA and Personal product options.

Nutmeg vs Moneyfarm

Nutmeg have a minimum investment amount of £100 when investing in a Lifetime or Junior ISA, or £500 for their Adult or Junior ISA.

For investments of less than £10,000 Nutmeg’s and Moneyfarm’s fees are the same at 0.75%.

Nutmeg’s fees are higher than Moneyfarm’s when investing between £10,000 and £100,000 at 0.75% for a fully managed portfolio. Moneyfarm charge between 0.5% and 0.6% in this range.

When investing over £100,000 Nutmeg’s fees are the same as Moneyfarm at 0.35%.

Nutmeg offer a Stocks and Shares ISA, Lifetime ISA and they also offer a pension. Nutmeg recently added a Junior ISA option too.

Is Moneyfarm Right For You?

Having read all of the above, you will hopefully have a good idea by now of whether Moneyfarm* is going to be the right investment option for you.

If you’re looking to find a killer share or stock which is going to make you filthy rich in a matter of a few years, then Moneyfarm probably isn’t for you and you may want to check out the Hargreaves Lansdown DIY Stocks and Shares ISA instead.

If, however, you are looking for a truly hands-off investment option with low-fees/charges and which should hopefully deliver steady and consistent growth for years to come, then Moneyfarm could well be a good option for you.

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