Moneyfarm Review 2023 | Money Bulldog


LINKS MARKED * ARE AFFILIATE LINKS.

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

We’ll look at Moneyfarm’s fees, products, minimum investment amount and also examine the past performance of their funds. All of this information will help you to decide whether Moneyfarm are the right choice for you in 2023!

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 2016.

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 are experienced investors keen to delegate.

Many experienced investors choose Moneyfarm because of the low fees and hassle-free approach which also includes access to a consultant. 

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 new 7 tier fee structure is simple and easy to understand. Basically the more you invest with Moneyfarm the lower your fee will be. The fees Moneyfarm charge also significantly decrease once you invest over £100,000.

Here are the fees charged by Moneyfarm according to investment amount by tier…

  1. £500+ – 0.75%
  2. £10k+ – 0.7%
  3. £20k+ – 0.65%
  4. £50k+ – 0.6%
  5. £100k+ – 0.45%
  6. £250k+ – 0.4%
  7. £500k+ – 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.

We will try to keep the fees listed in this Moneyfarm Review up to date but they may change from time to time.

Fixed Allocation Portfolio Fees

It is now also possible to invest with Moneyfarm from as little as 0.25% with their fixed allocation portfolio. These portfolios are not actively managed but they are rebalanced once a year to ensure the portfolio is still heading in the right direction. Fixed allocation customers will also still have access to the Moneyfarm App, a dedicated consultant and portfolios can still be constructed in a socially responsible way if this is high on your list of priorities.

The fees on fixed allocation portfolios again decrease as you invest more. Here are the fees charged on certain investment levels…

  • £500-£100k = 0.45%
  • £100k to £250k = 0.35%
  • £250k to £500k = 0.30%
  • above £500k = 0.25%

Moneyfarm Stocks and Shares ISA

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 Junior ISA

With a Moneyfarm Junior ISA you are able to invest up to £9000 per tax year. You can do this until their 18th birthday and it’s also possible for other family members or even friends to contribute if they want to help grow a child’s fund.

It’s possible to invest on a recurring basis or you can add a lump sum at any time. Fees start at just 0.25% and the option exists to invest in socially responsible portfolios.

Moneyfarm Pension or SIPP

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.

How Much Can You Invest With Moneyfarm?

Moneyfarm have a minimum investment amount of £500.

Moneyfarm do recommend that you invest more, however. This is so that they can build a truly balanced portfolio on your behalf. They suggest at least £2500 as a good starting figure.

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

I can’t see any reference to a maximum amount that you can invest with Moneyfarm on their website.

Moneyfarm Past Performance

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.

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.

Is Moneyfarm Safe?

One important question you might ask from a Moneyfarm Review is how safe your money is with the company?

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.

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

InvestEngine vs Moneyfarm

If you feel after reading this Moneyfarm review that they’re not the right choice, then you might wonder if there are any alternatives to Moneyfarm in the UK?

InvestEngine* are a low-cost robo advisor who have recently launched in the UK. The platform was created by one of the co-founders of Gumtree with the aim of bringing down the cost of robo advice and ‘do it yourself’ ETF investing.

Read our full InvestEngine Review here.

InvestEngine have a minimum investment amount of £100 vs Moneyfarm’s £500.

The price of a managed portfolio with InvestEngine is 0.25% vs 0.35%-0.75% with Moneyfarm (depending on how much you are investing).

There are no fees with InvestEngine when investing on a DIY basis.

InvestEngine currently only offer an ISA, a personal account or a business account. Though there are plans to introduce a pension product in the future.

Is Moneyfarm Right For You?

We hope that you have found this Moneyfarm Review useful.

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 a 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.

*Capital at risk

*Tax treatment is dependent on your individual circumstances + *Subject to HMRC requirements

*Past results do not guarantee future results

As mentioned at the start of this post, some of the links included in this Moneyfarm review are affiliate links. This means I may receive a small commission if you decide to open an account. If you would rather I didn’t then here is a direct Moneyfarm link.



Source link