Moneyfarm Review 2024: Pros & Cons

Emerging in 2011 as a successful player in managing investor funds in Italy, Moneyfarm extended its operations to the UK in 2016, responding to the growing demand for investment ISAs, robo-advisory services, and cost-effective options in stocks and shares ISAs and pensions.

The platform addresses the evolving landscape where investment opportunities are sought by both beginners and experienced investors. Historically, investing was a realm accessible mainly to the affluent, but the advent of investment fund platforms transformed this landscape.

Moneyfarm's entry into the UK market aimed to offer a user-friendly and budget-friendly investment platform, catering to diverse investor needs with a focus on delivering robust investment performance with minimal user intervention.

With a noteworthy track record in Italy, Moneyfarm established itself as a reliable platform, and its acquisition of Wealthsimple's business in December 2021 further solidified its position as one of Europe's largest digital wealth managers, overseeing £2 billion in assets under management.

Moneyfarm Account Options:

Unlocking the potential of tax-efficient savings, Moneyfarm offers a versatile range of account options tailored to various financial goals:

• General Investment Account:
  • Standard account subject to Capital Gains Tax on profit increases.
• Stocks & Shares ISA:
  • Tax-free savings of up to £20,000 per year.
  • Flexibility for withdrawals and additions within the same tax year.
  • Option to transfer existing ISAs seamlessly.
• Junior ISA:
  • Allows saving up to £9,000 annually per child.
  • Funds accessible for the child at the age of 18.
  • Flexibility in transferring existing Junior ISAs.
• Pension:
  • Retirement savings with additional 25% government contributions.
  • Option to transfer existing pensions with assistance from Moneyfarm.

Individual Account Highlights:

1. Moneyfarm Stocks & Shares ISA:
   • Exclusive offer for Money to the Masses readers: No fees for up to 12 months.
   • Personalized portfolio construction based on savings goals and risk appetite.
   • Portfolio diversity with options like actively managed, fixed allocation, or socially responsible.
   • Seven investment tiers catering to various risk levels.
2. Moneyfarm Junior ISA:
   • Exclusive offer for Money to the Masses readers: No fees for up to 12 months.
   • Flexible initial investment and regular monthly commitments.
   • Third-party contribution tool for friends and family.
   • Conversion to a regular Stocks and Shares ISA when the child turns 18.
3. Moneyfarm General Investment Account:
   • Functions similarly to the Moneyfarm Stocks & Shares ISA.
   • No tax benefits, with all income and growth being taxable.
   • No annual contribution limits.
4. Moneyfarm Pension:
   • Exclusive offer for Money to the Masses readers: No fees for up to 12 months.
   • Streamlined transfer of existing pensions with Moneyfarm's assistance.
   • Tailored portfolio based on savings goals, risk appetite, retirement plans, and invested amount.
   • Facilitation of employer contributions, including those from a client's limited company.

Moneyfarm Fees Simplified:

Navigating investment fees can be complex, but Moneyfarm simplifies it with a straightforward structure:

• Management Fee:
  • Automatically deducted annually as a percentage of your invested money.
  • Starts at 0.75% for the first £10,000 and gradually decreases with higher investments.
  • Example: For a £15,000 investment, the fee is 0.70% on the entire amount.

Management Fee Breakdown:

• Up to £10,000: 0.75%
• £10,001 - £20,000: 0.70%
• £20,001 - £50,000: 0.65%
• £50,001 - £100,000: 0.60%
• £100,001 - £250,000: 0.45%
• £250,001 - £500,000: 0.40%
• Over £500,000: 0.35%

• For Fixed Allocation Portfolios:

  • £500 - £100,000: 0.45%
  • £100,001 - £250,000: 0.35%
  • £250,001 - £500,000: 0.30%
  • Over £500,000: 0.25%

• Additional Fees:

  • Fund Fee (0.20%):
    • Charged by ETF providers integrated into Moneyfarm portfolios.
  • Market Spread Fee (Up to 0.09%):
    • The difference between your selling price and the buyer's purchasing price.

These low and transparent fees distinguish Moneyfarm, offering a cost-effective investment solution compared to alternatives like Nutmeg, especially for smaller investments. Importantly, Moneyfarm's track record for generating returns adds value to its competitive fee structure.

Ensuring the Safety of Your Investments with Moneyfarm

Rest assured, Moneyfarm prioritizes the safety of your investments:

• Regulation and Approval:
  • Authorized and regulated in the UK by the Financial Conduct Authority (FCA) .
  • Approval by the FCA underscores Moneyfarm's commitment to adhering to financial regulations.
• Financial Services Compensation Scheme (FSCS):
  • Your funds are protected by the FSCS , providing coverage up to £85,000.
  • This protection applies in the unlikely event of Moneyfarm facing financial difficulties or going out of business.
• Ring-Fencing in a Protected Trust Account:
  • Moneyfarm takes an extra step to safeguard your money by holding it separately in a protected trust account.
  • This separation ensures that in the event of Moneyfarm's closure, all customer funds would be returned.
• Custodian Bank for Added Security:
  • Moneyfarm appoints a custodian bank to securely hold your money and investments.
  • This additional layer of security contributes to the overall protection of your financial assets.

Moneyfarm's commitment to regulatory compliance, coupled with protective measures such as ring-fencing and custodian banking, makes it a secure platform for your investments. The FSCS coverage further enhances the safety net, assuring investors of the platform's reliability.

Pros

Discover the numerous benefits that make Moneyfarm a favorable choice for investors:

• Straightforward Fee Structure: A simplified fee structure ranging from 0.25% to 0.75%, ensuring transparency and cost-effectiveness.
• Diverse Portfolio Options: Choose from actively managed, fixed allocation, or socially responsible portfolios, providing flexibility based on individual preferences.
• Regulated Advice Availability: Option to receive regulated advice from an Investment Consultant, offering valuable insights for informed decision-making.
• Investment Protection: Investments protected by Saxo Bank, adding an extra layer of security to safeguard your financial assets.
• Positive Customer Feedback: Positive customer reviews and industry recognition underscore Moneyfarm's commitment to customer satisfaction.
• User-Friendly Platform: Great for beginners and hands-off investors, with an easy-to-use platform that simplifies the investment process.
• Personal Investment Advisor: Benefit from a free personal investment advisor, providing personalized assistance and guidance.
• Proven Track Record: Moneyfarm boasts a great track record for growing money, instilling confidence in its investment strategies.
• Socially Responsible Investing: Socially responsible investment options available, catering to investors who prioritize ethical and sustainable choices.

Cons

• High minimum investment of £500 may deter some potential investors.
• Limited control over specific assets compared to other investment platforms.
• App loading speed can be slow, affecting user experience.
• Reports of customer support waiting times, especially during peak hours.
• Mandatory £500 investment might exclude those looking to start with smaller amounts.

Customer Reviews

• Moneyfarm has received positive customer reviews, with a Trustpilot rating of 4 out of 5 from over 1,063 reviews, considered excellent in the financial services sector.
• The popularity is attributed to great customer service from investment advisors, a strong track record of profitability, and an easy-to-use website and app.
• Across multiple review platforms, Moneyfarm holds a 4.5/5-star rating based on more than 200 reviews, with an "Excellent" rating on Trustpilot.
• Positive aspects highlighted by customers include the platform's ease of use, a variety of risk levels, competitive fees, good performance, and expert management of investments.
• Some negative reviews mentioned dissatisfaction with the poor performance of specific funds.

Final Thoughts

In summary, the reviewer expresses immense enthusiasm for Moneyfarm, describing it as a standout investment provider with a unique blend of personalized service and advanced technology. The platform offers the rare combination of a personal investment advisor along with a user-friendly website and app, providing transparency and control over investments. Noteworthy features include low fees, a stellar investment track record, and the option for socially responsible investments.

The review concludes with a resounding five-star rating and a strong recommendation for those seeking a straightforward, hassle-free, and passive approach to stock market investing.

Moneyfarm is highlighted as an excellent choice for individuals looking for a tailored portfolio aligned with their risk profile and savings goals. The inclusion of a human Investment Consultant sets Moneyfarm apart in the robo-advice space. For those considering alternatives, explore our reviews on eToro and FreeTrade for a well-rounded comparison in the robo-advice and investment space.

The reviewer suggests that, while past performance is positive, potential investors should be mindful that it does not guarantee future returns. Overall, Moneyfarm is portrayed as a slick, low-cost, and easy investment solution with the potential for a decent return.