MoneyFarm is one of the many relatively new robo advisor investing platforms on the market and as we discuss in our Moneyfarm review, they are excellent at allowing casual non-investors to try their hand at potentially increasing their savings for the future and on into retirement.
The originally Italian based company branched out into the UK in early 2016 and is authorised and regulated by the Financial Conduct Authority. They’re also backed by the Financial Services Compensation Scheme meaning that anything you invest with them up to £85,000 is protected.
Moneyfarm currently offer Stocks and Shares ISAs, SIPPs and General Investment Accounts. Their investment approach is to present clients with 7 different portfolios, varying in risk, that are invested across a range of financial instruments (although their asset allocation is mainly in ETFs).
Their portfolios have all performed generally well over the last 4 years they’ve been operating here in the UK and give investors solid annual returns. Moneyfarm fees and annual charges are competitive for the kind of service they are offering (more of a ‘done for you’ product) and they have a great customer service team and wealth managers on hand to help you with any questions you may have prior to signing up.
Let’s take a look at their range of products
MoneyFarm Product Range
Moneyfarm offers their investors three primary investment services made up of a Stocks and Shares ISA, a SIPP and a General Investment Account and you have the option to invest your money in a choice of 7 portfolios. Each portfolio as a number associated with it; 1 being the lowest risk and 7 the highest.
Your funds will be spread across the following investment options:
- Cash & Short Term Government Bonds
- Developed Markets Government Bonds
- Inflation-Linked Bonds
- Investment Grade Credit
- High Yield Credit & Emerging Markets Government Bonds
- Developed Markets Equities
- Emerging Markets Equities
- Commodities and Real Estate
As part of their product summary, Moneyfarm is also transparent about the different countries where your funds will be invested. Obviously, this varies depending on your appetite for risk. For example, those with a low-risk portfolio (1), will have 66% of their funds invested in the UK markets with nothing being invested in emerging countries and commodities. However, if you have the highest risk portfolio (7), just 11% of your funds will be in UK markets and 13% will be invested in emerging countries; 50% will also be invested in the US stock market when choosing the high-risk portfolio.
Research Services & Tools
Moneyfarm is effectively a ‘done for you’ kind of service, where you don’t have the flexibility to create your own bespoke portfolio. This means that you won’t see the usual research and analysis tools you may come across with other investment services providers. Nevertheless, they still provide a wealth of information for their clients on their website.
Their ‘Insights’ section features a regularly updated blog where you can easily filter by topic; Financial markets, Investment products, Behavioural economics, Financial planning and, for all you newbs to investing out there, Investing 101 where they fill you in on everything from the basics of compound interest to inflation, equity and even GDP.
We particularly like their eBooks section which currently features 7, in-depth guides to interesting finance-based topics such as retiring early, FinTech and investing in the buy-to-let industry.
Finally, they also have a useful pension calculator tool to help you work out exactly how much you need to save for retirement. Unsurprisingly, studies have found that young people, especially millennials currently don’t know how much they need to save for a fruitful retirement and those who gauge a guess usually come in with numbers far lower than what they’re actually going to need.
The tool is set out very simply, you put in your current age, desired retirement age, current pension pot value and your desired annual income at retirement and it’ll calculate how much you need to be putting in there each month – you also have the option of whether to include your state pension as part of the calculations or not.
Like many other self-directed platforms, Moneyfarm investments operates a sliding scale fee structure which you can check out here to calculate the exact pound amount you’d be paying based on your annual investment.
Their management fees are essentially broken up into two parts; the costs and charges associated with providing their service (the Moneyfarm Management Fee) and the costs and charges relating to the financial instruments they invest in (Underlying Fund Fee and Market Spread).
Moneyfarm Investments Management Fee
Essentially this is Moneyfarm’s platform fee. This annual fee starts at 0.75% on investments up to £10,000, drops to 0.60% on balances between £10,000 and £50,000, is 0.50% on balances between £50,0000 and £100,000 and at its lowest, drops to 0.35% for all balances over £100,000.
Although this is a much higher fee structure than that of more bespoke self-directed services like Hargreaves Lansdown, Charles Stanley and AJ Bell, this is due to the fact that it’s a done for you service. If we compare it to a similar product, like that of Moneybox, for example, you can see that the fees are more aligned and that they’re actually pretty competitive, especially when you get to the £100,000 mark. Having said that, by this point in your investing journey, you may want to consider developing a personalised portfolio with one of the old school providers.
Underlying Fund Fee
Moneyfarm primarily invests in ETF’s and this is the fund fee associated with those particular instruments. With Moneyfarm, this is a flat fee of 0.20%.
Otherwise known as the cost of the transaction and can vary depending on where and when Moneyfarm makes your investment. The cost can be anything up to 0.09%.
Trading and Other Fees
The great thing about the done for you service and this transparent pricing structure is that there are no additional subscription fees to use the service and no trading fees, which with other providers can cost up to £13.95 per trade (and sometimes even more).
Moneyfarm’s pension fee structure is the same as that for their ISA account and GIA which we discussed above. They also base their fees on your total funds across all accounts, not just one. Another great thing is they don’t charge you any kind of admin fee for drawdowns on your pension account either, which, depending on the value of the pot, could see you saving hundreds per year compared to some other mainstream providers.
Opening an Account with Moneyfarm
Joining Moneyfarm can be done quickly and easily online. It took us less than 10 minutes to register for a get set up; though we did have to wait a day for extra ID verification – we imagine that this can be hit and miss and some users could be accepted right away.
You’re initially prompted with a questionnaire to determine the level of risk you’re comfortable taking at which point they will pick a fund for you. Then, all you need is your National Insurance Number, photo ID such as a passport or driving license and proof of address (a phone or utility bill will do). Overall, it’s pretty stress-free.
Transferring Your Investments to Moneyfarm
Transferring your investments to Moneyfarm works just the same as it does with other mainstream financial services providers. Once you have an account with them, you just need to access the transfer in form which can be found via your account page.
Transfers into your Moneyfarm ISA won’t count towards your £20,000 annual allowance but it’s worth noting that if you’re transferring from a cash ISA your money won’t be put into a cash ISA with Moneyfarm as they don’t offer this facility currently. Additionally, if you’re moving from an investing platform with personalised portfolios, your money won’t be invested in the same companies or funds (unless by chance you have picked the same ETFs as the team at Moneyfarm).
In terms of processing times for transfers, Moneyfarm is on par with the mainstream competitors and they take around 15 to 30 days to complete depending on your previous provider.
Moneyfarm ISA Review
Starting a stocks and shares ISA with Moneyfarm is a great way for you to dip your toes in when it comes to the world of investments. However, they do require that you make an initial deposit or transfer in of at least £1,500. Unlike other major players like HL, AJ Bell and Fidelity, where you can start with as little as £25 and set up a monthly direct debit contribution. Their ISA product, however, is flexible and you can withdraw funds and replace them in the same year without eating away at your allowance.
In terms of performance, however, generally, their customers are happy with their ROI which has shown steady long term gains since the company established their UK branch in 2016. As with any investing account, there comes an associated risk but they’ve rarely seen poor figures. Their ultra-cautious portfolio doesn’t make you that much more than what some high-rate savings accounts would bring in (though they are usually limited to a low amount) and over the last 12 months they’ve made particularly solid returns of 3.38%.
On the opposite side of the spectrum, their riskiest portfolio has made gains of 16.72% in the last 12 months and averaged an annualised return of 12.4% since 2016 which is pretty impressive considering the slump that most people faced in 2018.
Moneyfarm SIPP Review
Moneyfarm’s SIPP product is invested in the same funds as their ISA portfolios so the numbers and expected returns we discussed in the ISA review apply here too.
SIPPs are a great tax-efficient way to save for your retirement while getting a boost of 25% from the government too – and who doesn’t like free money. The great thing about the Moneyfarm Pension is that they also allow your employer to contribute to your pension pot too.
The fact that Moneyfarm mainly invests in ETFs means that they can keep the fund fees relatively low which is good for those who have lower pension pots and being a Robo-advisor service comes with some pros too. Although there are some great financial advisors out there, we can all make mistakes, and worse yet some advisors are known to not really look out for their client’s interests, but their own pockets instead resulting in poor gains for customers.
Overall their SIPP product is ideal for someone who’s just thinking about starting out a pension fund of their own.
Moneyfarm Customer Service
The customer service team at Moneyfarm have been pretty quick and helpful at responding to our queries when we reached out. They have an almost live-chat system which is kind of like intercom but a little bit better as they don’t take hours to respond; we actually saw responses in less than 5 minutes which is almost as good as regular live chat.
Their advisors are available to answer questions Monday to Thursday 9am – 7pm and Friday 9am – 6pm. You can also reach out to them via email, twitter, Facebook messenger and phone. If you’re tight on time you can even book a phone call. They also have a huge FAQ section which is sure to help you answer all your general questions.
Moneyfarm Review Summary
As you can see from this Moneyfarm review , Moneyfarm is an ideal product for those new to the world of savings and investments who have a small lump sum (minimum of £1,500) that they want to put to one side for their future and top up on a monthly basis. As a robo advisor It’s a great passive investment that will require very little management on your side and just the occasional monitoring on their website or app.
It suits people with no investment experience as just a few questions will gauge your risk appetite and will put you in a portfolio that will suit your needs the best and, if it doesn’t work out, you can swap and change between portfolios as you please.
It’s a great product for those who want to have minimal input towards their investments but still want to see a better return than what they get in the banks from standard savings products. The fees charged by Moneyfarm are competitive and in line with other Robo-advisor services.
Who owns Moneyfarm?
Moneyfarm was co-founded by Paolo Galvani and Giovanni Dapra and has received investments from capital investing firms United Ventures and Cabot Square Capital as well as Allianz (one of the worlds largest insurance companies) and Poste Italiane the Italian postal service.
Is Moneyfarm safe?
Moneyfarm is safe for UK investors as they are regulated and supervised by the Financial Conduct Authority in the UK.
How do I close my account at Moneyfarm?
First step is disinvest your investments and then email email@example.com to close your account.
How do I withdraw money from Moneyfarm?
First step is to disinvest and turn your investment into cash, from here you can then withdraw the cash to your personal bank account.
How to contact Moneyfarm?
Free phone in the UK: 0800 433 4574 or From abroad you can call: +44 (0)20 3745 6990 or alternatively you can email firstname.lastname@example.org
Peter Field is a financial analyst and has written for InvestingReviews.co.uk covering topics from pensions, savings, investments and ISAs. His knowledge of the Investment market has proven invaluable, making his unbiased views and opinions open and honest for everyone. In 2021 Peter retired and is working towards enjoying more of the outdoors with his beloved labrador Millie.