It’s not something serious traders wanting to game the market will be interested in, but for those who simply want to get their money working hard without taking an active role it’s a great solution.
Moneyfarm is an investing app that does all the hard work for you. You just fill in a questionnaire and it will assign you a fully managed portfolio. Its website and app are modern and easy to use, but we were especially impressed by the customer service and the offer of an intro call with an investment consultant. It’s low cost too (coming in cheaper than Nutmeg for example) and the past performance of its funds has been decent.
The recently added “themes’ feature lets you take a bit more control over your account – but if you think you will want to actively manage your pile as your experience grows this platform isn’t for you. If you want to just sit back while your money works hard, it’s definitely worth a look.
🧑🎓 Awesome for newbies and those wanting to be hands-off.
📞 Intro call from an advisor.
☎️ Great customer service.
👵 SIPPs and ISAs available.
🌎 Sustainable investing options.
🔒 Fully regulated.
👛 Low fees.
🚪 No exit fees.
💷 £500 minimum first deposit.
😐 7 portfolio options might feel limiting over time.
Moneyfarm, founded in March 2011 by Paolo Galvani and Giovanni Daprà, is a prominent player in digital wealth management. Originating in Italy, the company has expanded its operations across Europe, primarily serving clients in the United Kingdom and Italy, and extending its services to residents in Germany as well. It now boasts more than 125,000 active investors and manages more than £3.5 billion on its platform.
Moneyfarm’s aim is to take the hassle out of investing using its smart technology and a world-class investment team. Rather than picking individual stocks through the platform, you will answer a questionnaire to determine your interests and risk appetite. Moneyfarm then handles the tricky business of investing for you.
Note: Moneyfarm has recently introduced early access to its share investing product. Rather than taking a managed portfolio, you can invest in stocks and funds directly. As it’s still in launch phase we haven’t reviewed this yet.
[.custom-color]Moneyfarm has 4 account options.[.custom-color]
General Investment Account: This standard account allows for unlimited contributions. Investments made through this account may be subject to Capital Gains Tax.
Stocks & Shares ISA: This account enables tax-free investing of up to £20,000 per year. Moneyfarm also offers a free transfer service for those wanting to move their existing ISAs to Moneyfarm. This ISA is flexible, allowing for withdrawals and re-contributions within the same tax year without affecting the ISA allowance.
Junior ISA: Designed for saving for children, this account allows savings of up to £9,000 per year per child. The account is set up in the child’s name, and they can access the funds when they turn 18. Like an adult ISA, returns are protected from both capital gains and income tax.
Private Pension (SIPP): The Self-Invested Personal Pension (SIPP) offers serious tax benefits. Basic rate tax-payers get an extra 25% added to their contributions by the government. So for every 80p you put in, the government will round it up to a pound – and all this is handled automatically through the platform. Higher and additional rate taxpayers can claim back more through self-assessment.
We tried out the platform – let’s walk you through it.
Opening An Account: This was a straightforward process. You just download the app and put in some basic info. You can select the type of account you want to open from the homepage.
Create Your Investor Profile:
Initially, you’ll answer a series of questions on the Moneyfarm. This helps it understand what’s right for you, enabling it to create an investor profile that reflects your specific needs and preferences. The questions break down into a few sections:
Get Matched with a Portfolio:
You will then be given your investor profile – i.e. the portfolio you have been matched with. These range from 1 (least risky) to 7 (most risky) and will be given a name such as “conservative” or “adventurous”.
There is then the option to get a callback from an investment consultant – and we were told this could happen immediately. We love this from Moneyfarm. Too many modern digital investment services are hiding behind email-only customer services when customers are dealing with important future financial planning.
Next, you get to choose how to manage the portfolio. There are three options:
Actively Managed: In these portfolios, Moneyfarm’s experts actively make decisions to adjust your investments based on market changes. They aim to take advantage of market opportunities and manage risks.
Fixed Allocation: These are simpler, low-cost portfolios that don’t change much over time. They are rebalanced once a year and don’t respond quickly to market changes. The benefit is that they have lower costs but you might miss out on investment opportunities.
Liquidity+: This is a low-risk investment option for short-term goals (2 years or less). It mainly invests in safer things like bonds and offers easy access to your money. It aims to provide stable returns, but these can change with the Bank of England’s rates.
Next, you can choose if you want a standard investment focus or to bias your portfolio towards socially responsible investments.
Lastly, if you haven’t been bucketed into a low-risk investor profile, Moneyfarm has a new feature where you can invest up to £10,000 of your portfolio into selected themes. We were allowed to pick from sustainability, technology, society or a mix of trends.
Funding & Managing Your Portfolio: Once you fund your account, Moneyfarm’s technology and investment team begin managing your investments. The investment process is overseen by their Chief Investment Officer and an investment committee, who make strategic adjustments to your portfolio.
Ongoing Support and Consultation: Throughout your investment journey with Moneyfarm, you have access to a dedicated investment consultant. This expert is available to support you, answer questions, and help you adjust your investment plan as needed.
[.custom-color]Moneyfarm’s fee structure is simple to understand.[.custom-color]
It charges you based on how much money you have in your portfolio. As you go over certain thresholds the whole of your money starts to be charged at a lower rate.
However, there are other fees you can incur. The funds that Moneyfarm invests in, also known as Exchange-Traded Funds (ETFs), have their own fees – averaging 0.2%. There is also a market “spread” cost – essentially a transaction fee incurred when Moneyfarm buys and sells assets and this averages 0.09%. So if you invested £25k the full cost would be 0.94% (0.65% + 0.2% + 0.09%), which works out at £19.58 a month.
Included in Moneyfarm’s fees are services like regular rebalancing, constant market analysis, strategic adjustments, and access to an investment consultant for discussions and financial planning.
This is competitive with Nutmeg which charges 0.75% up to £100k, plus 0.22% in fund fees and 0.04% in spread fees. So for the £25,000 example above it would work out at £21.04 a month.
As these are managed much less intensively and are only rebalanced once a year, the fees are lower.
This has a straightforward fee of 0.3% for all portfolios.
[.custom-color]Generally past performance has been reasonable.[.custom-color]
Most of Moneyfarm’s funds were steady up to the pandemic, had a difficult initial post-covid period and are now showing some green shoots. This is in line with lots of other funds that have followed a similar trajectory. Below we have compared Moneyfarm vs Nutmeg’s performance for their least, middle and most risky portfolios.
Always do your own research before deciding which fund is for you!
[.custom-color]The platform is fine if you’re after the basics.[.custom-color]
You can log in and view the performance of your accounts at any time. You get a nice graphical representation of how it’s going, but it’s hard to dig into the specifics of exactly where your money is being invested beyond broad asset classes and sectors. If you’re after granular detail you will be disappointed.
[.custom-color]Customer service is excellent.[.custom-color]
You can reach out via phone or live chat for assistance between 9 am and 6 pm Monday to Friday.
We tested out live chat and a representative responded to us immediately but was not able to answer our question right away (they were super polite). We then decided to call and it took 1 minute 6 seconds for a representative to answer the phone. He was friendly, knowledgeable and able to answer our query right away.
[.custom-color]Moneyfarm is well-suited for beginners.[.custom-color]
The platform is designed to simplify personal investing, making it more accessible to newbies who just want to have their finances managed for them and don’t want to delve into the intricate details of investment strategies. It walks you through every step of the way and takes the time to explain concepts in simple language.
A standout feature for beginners is the option of an initial call with an adviser. It’s rare to get such personal attention without shelling out cash.
[.custom-color]Moneyfarm is generally considered safe for investors.[.custom-color]
It’s regulated by the UK’s Financial Conduct Authority (FCA), ensuring adherence to strict financial and ethical standards. Additionally, Moneyfarm’s clients’ funds are protected under the Financial Services Compensation Scheme (FSCS), offering coverage up to £85,000. This level of regulation and protection offers a significant degree of security, making it a trustworthy option for those looking to invest.
It is also backed by some of the biggest names in finance including M&G, Allianz Global Investors and United Ventures.
However, as with any investment, there’s always some level of risk involved, and it’s important for investors to be aware of this.
Yes, Moneyfarm is very good at what it does. It’s not something serious traders wanting to game the market will be interested in, but for those who simply want to get their money working hard without taking an active role it’s a great solution.