Moneyfarm Review – The right investment for 2018?

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

We will look at Moneyfarm’s fees, minimum investment amount, Stocks and Shares ISA and pension offering. We’ll also review the past performance of their funds. 

Finally we’ll see how Moneyfarm* compare to some of the other top UK robo-advisors on the market.

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. They were one of the early players in the phenomenon of robo-advice.

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 then 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 but they do hold appeal elsewhere too. Many experienced investors are also now investing with Moneyfarm due to the low fees charged and the hassle-free approach. 

Moneyfarm Fees

One of the biggest things which attracts investors to a platform like Moneyfarm are the low fees charged. So, what are the fees exactly 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. So, if you invest anything up to £20,000 then their management fee is 0.7%. When you invest between £20,000 and £100,000 it’s 0.6%. For £100,000 to £500,000 it’s 0.5% and for anything over £500,000 it’s 0.4%.

You will also need to factor in the costs associated with the underlying ETFs, which average around 0.3% per annum. This is very 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. You can find even more details about what’s included on the FAQ section of the Moneyfarm website*.

Moneyfarm New Fees

How Much Can You Invest With Moneyfarm?

Moneyfarm have no minimum investment amount, meaning you can invest from just £1. 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 apart from the fact you can invest up to £20,000 in each tax year without paying income or capital gains tax. You can start an ISA with Moneyfarm in less than 10 minutes. You can also transfer an existing ISA to Moneyfarm fees free. The Moneyfarm ISA is also attractive as there are no minimum initial or monthly investment amounts.

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

Review of 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 their 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.

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?

Until recently, Moneyfarm did not offer a pension product. This has now changed, however, and you can now set up a Moneyfarm pension via their website*.

If you are looking for other robo-advisors who also offer a personal pension, then you may want to check out Nutmeg*

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 £50,000 for extra protection.

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

Moneyfarm 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. These are Nutmeg and Wealthsimple.

Wealthsimple vs Moneyfarm

One major robo-advisor who are now offering their services to UK investors are Wealthsimple*.

Like Moneyfarm, Wealthsimple don’t have a minimum investment amount. They have a simple fee structure, charging a management fee of just 0.7% annually on any investments up to £100,000. If you invest more than £100,000, then this drops to 0.5%.

We’ve also secured a special new investor offer for Money Bulldog readers who sign up with Wealthsimple. Sign up using a Wealthsimple link on our site and get your first £5,000 of investments managed free* for a year!

For more on Wealthsimple see our Wealthsimple Review.

Nutmeg vs Moneyfarm

The first point of note is that Nutmeg* have a minimum investment amount of £500 to start investing with them. As we’ve already discussed, Moneyfarm have no minimum investment amount. Nutmeg’s fees are higher when investing between £20,000 and £100,000 at 0.75% for a fully managed portfolio. They are, however, lower than Moneyfarm when investing over this amount at 0.35%.

Nutmeg offer a Stocks and Shares ISA, a Lifetime ISA and they also offer a pension.

For more on Nutmeg read our Nutmeg Review.

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 DIY Stocks and Shares ISA from Hargreaves Lansdown* 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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