Moneyfarm Review — Are They The Right Investment for You?

Could Moneyfarm be the right robo investment advisor for you?

Updated: March 25, 2024
Matt Crabtree

Written By

Matt Crabtree

 

If you're currently in the process of weighing up various investment platforms to find the right investment strategy that best suits your needs, you're in the right place.

Our Moneyfarm review is set out to provide dependable advice that you can rely on, covering the pros, cons and key features you must consider before investing in Moneyfarm.

There is much to consider regarding investing, due to the sheer level of portfolios and fees you will be subject to when you start looking for the perfect software. Whilst Moneyfarm is relatively straightforward, there are many elements that will make your decision regarding the platform, and we are here to offer a helping hand in getting to the bottom of the platform's offerings.

Without further ado, let's dive into all things about Moneyfarm to give you a well-rounded overview of the platform!

Why Consider Investing?

Before we even delve into Moneyfarm and what the platform offers, it is important to understand investing and determine if the process is right for you. Many of us invest money to make the most out of our finances. When done correctly, investing can help you to build your wealth up, with inflation and value increases helping your money go further than ever. 

The main benefits surrounding investing that persuade people to pursue it are beating inflation, maintaining long-term returns and earning additional income to establish a financial safety net.

While saving money is an excellent habit to start, investing protects your money's value, ensuring your financial assets don't change according to the cost of living crisis. 

You can enjoy immediate satisfaction by reaching investments and watching as your money makes a difference.

On the other hand, long-term stability and financial needs are met, ensuring that your future financial circumstances look more positive than without investment.

If the above sounds like something you are interested in, you're in the right place. Of course, it is essential to point out that investing has risks, and you should fulfil this practice with care. One of the best ways to pursue investing with minimal risk is by enlisting the help of a reliable platform such as Moneyfarm. 

What is Moneyfarm?

Moneyfarm is an online digital wealth management company offering investment advice to a range of European clients. The platform works best for those needing a financial advisor regarding choices surrounding ISA or pension investments. 

The platform launched in the UK in 2016 when there was a significant rise in interest regarding stocks and shares ISA. The consumer investment platform was created to help beginners understand the investment market and offer a cost-effective solution to an industry that has previously been dedicated to high earners or those with financial backing.

With the help of Moneyfarm, users of all backgrounds can gain advice on how to invest in an ISA, with the Financial Conduct Authority in the UK regulating the process to ensure users trust the investment advice they receive.

In 2024, Moneyfarm will have over 90,000 investors with actively managed portfolios that reflect their needs. The platform is made for all experience and knowledge levels, with experienced investors on hand to offer advice and guidance regarding online tools and investments.

Many refer to Moneyfarm as a roboadvisor, with the platform providing users with an investment plan similar to financial advisors. However, as the platform is digital, you can get started investing much quicker, allowing you to fulfil your investment wishes without needing to leave your house. 

How Does Moneyfarm Work?

The Moneyfarm process starts by assessing your needs and how you want to achieve your goals.

You can choose between fixed allocation portfolios or actively managed portfolios, ensuring you select the right investment portfolio tailored to your needs that leverages your investment opportunities.

Here is a step-by-step guide on how to start using Moneyfarm;

Create Your Investor Profile

You can start an investor profile with Moneyfarm in no time at all, just by answering a few essential questions covering your investment goals, knowledge and attitude regarding investing and general information.

You need to identify these different types of information to ensure your investor profile is personalised and that the investment experts can guide you in the most effective way that corresponds to your goals.

Find Your Perfect Portfolio

You will receive a portfolio recommendation based on the answers you provided earlier. However, you can manually select if you would like an actively managed portfolio or a passive fixed allocation portfolio, whichever best suits your needs. The next step is to choose your investment product, such as an ISA.

Your investor profile is then matched to a top-notch portfolio. Your portfolio consists of a diverse mixture of handpicked, cost-efficient ETFs, all meeting high-reliability standards you can depend on.

You can assess the options that best suit you, depending on the exposure you wish to have for optimised growth.

Team Up With an Expert

When your portfolio is set up, Moneyfarm will relay the management style you chose and implement smart tech to manage your investment process on your behalf. Moneyfarm's investment team will make strategic changes to your portfolio.

Consultant Advice

One of the most significant selling points of Moneyfarm is how personable the service is and that clients can gain great advice and customer service throughout their time using the platform. You can reach an investment consultant anytime, ready to chat with you whenever you need.

The four above steps are important ways to start using the software, but it is simple to continue using the platform as well. Instead of needing to analyse stocks and markets to invest your money wisely, Moneyfarm provides a simplified investment process that provides you with the knowledge you need whilst cutting lengthy ties that can take years to learn and pick up. 

Moneyfarm Key Features

For the process of Moneyfarm to work as well as it does, key features must be implemented throughout the website.

These features include what the platform offers users, and how these offerings are fulfilled to meet requirements and needs. Below, we will detail how specific features ensure that Moneyfarm investments exceed many other online investment account options;

Stocks and Shares ISA

With each new tax year, UK residents can take advantage of a free ISA limit of £20,000. With Moneyfarm, you can put your savings into stocks and shares ISA and allow their experts to invest your money based on your personal needs and how you have set up your portfolio.

Moneyfarm provides an easy and efficient way for users to grow their wealth without needing to spend extensive time learning about ISA strategies or investments, as all the advice and expertise are provided to you.

Of course, there are different types of ISAs that you can invest in, and speaking to a consultant at Moneyfarm is the best way to reach this decision. The platform offers ISA schemes such as private pension and Junior; let's dive into each type of ISA;

  • Private Pension: With Moneyfarm, users can invest for retirement and receive a 25% boost on savings with up to 45% tax relief.
  • General Investment Account: With this ISA, you can make unlimited contributions, open different portfolios for different goals and quickly gain access to your money. This type of account is more flexible.
  • Junior ISA: Moneyfarm's junior ISA provides clients with £9000 in tax-free allowance, with sustainable portfolio options that ensure it is never too early to start investing and saving. By saving £750 a month, your child could save up to £28,000 by the time they are eighteen; talk about making a change to their lives!

Moneyfarm provides stock and shares ISA information on their site, demonstrating that their UK portfolios have beaten competitors in previous years, pointing to them being one of the best places to open an investment account.

Thematic Investing

Thematic investing is a megatrend constantly evolving in the modern day, but how can Moneyfarm help you fulfil this type of investing? Moneyfarm keeps in mind the most significant growth opportunities currently on the market, with the likes of innovative technology playing a massive role in this type of investment.

Megatrends build growth themes to enhance your portfolio and establish it for the long term. Here are the four growth themes that Moneyfarm offers;

Technology: Invest in sectors such as e-commerce, artificial intelligence and electric vehicles and target breakthrough technology. This sector is a great investment as the technology industry continues to grow and has excellent projections. 

Sustainability: Invest in clean energy and clean water to secure a sustainable future for the benefit of future generations. From mitigating risks to ensuring you invest in causes you are interested in, sustainable investing is an excellent option. 

Society: Invest in eCommerce and gender equality to impact positive societal change. This investment goes hand in hand with financial benefits and achieving individual social missions.

Multi-trend: Invest in global infrastructure and eCommerce for a diverse investment portfolio that covers multiple growth themes.

Socially Responsible Portfolios

Moneyfarm enables you to invest in the areas you want per your social and economic views, ensuring you can make a positive change to the world's future through your investments.

A socially responsible portfolio consists of funding investments placed in some of the world's most progressive and impactful businesses. Moneyfarm uses MSCI data to check ESG funds to ensure their selection process reflects the best social investments available, with assets placed in companies with low carbon emissions and labour law compliance.

You can have confidence in your funding investment thanks to the ESG research that Moneyfarm delivers, ensuring your portfolio is diverse and covers sustainable growth that provides sufficient returns.

Fixed Allocation Portfolios

Moneyfarm provides a fixed and low-cost approach to investing for minimal risk and long-term growth. With a fixed allocation portfolio, your money is accessible and can be withdrawn at any point, with the ability to reinvest at a later date.

These portfolios are built by an expert team with extensive experience in investing whilst giving your money the space to move freely in line with markets. This portfolio type provides a yearly rebalance from the expert investment team, offering lower-cost solutions.

General Investment Account

As briefly touched on above, with a general investment account, Moneyfarm users can invest and withdraw money at any time, providing the ultimate level of flexibility. With hands-on, active managing, you can sit back and let the expert team of investors guide you to success with a balanced portfolio.

You can leverage your general investment account by combining it with a fixed allocation portfolio, providing lower fees. This type of account is excellent as you can include different types of unlimited investing that meets your individual goals whilst saving more and paying less.

Whether you are a beginner or have more experience in investing, there is much to be enjoyed with a general investment account. 

Moneyfarm Pros and Cons

The best way to determine if a platform is right for you is by weighing up the pros and cons and understanding how using Moneyfarm will benefit you whilst meeting your needs.

Below, we will take you through the platform's advantages and disadvantages, offering insight that should help you decide if this investment is worth your time.

Moneyfarm Pros

✔️ Choose From a Number of Accounts: Moneyfarm has a great range of portfolio and account types for users to choose from, ensuring that you have a plan that reflects your needs regardless of age, background, financial circumstances or job.

✔️ Experienced Investors: Delving into the world of investing is no easy task, but Moneyfarm simplifies the process by teaming clients up with investors with the necessary experience and knowledge to offer advice and devise a personalised portfolio for clients, going above and beyond a traditional financial advisor.

✔️ Customer service: Having excellent customer service is a top priority at Moneyfarm, with the platform offering users around-the-clock support via email or phone to ensure any questions or queries are answered.

✔️ Easy Process and Fee Structure: Users can enjoy simplified membership startups instead of pursuing a lengthy and confusing signup process. All you need to do is create an account and select your desired portfolio, and you're ready to start investing. To carry on investing money, all you need to do is consistently stay up to date with your annual account management fee.

Moneyfarm Cons

❌️ High Minimum Investment Fee: Although Moneyfarm's fee structure is simple and easy to follow, the initial investment fee is £500. This fee is relatively high compared to other market leaders, therefore making Moneyfarm not accessible to specific users with a goal of starting an ISA or investing.

❌️ Limited Investment Selection: There are only seven types of portfolios you can choose with Moneyfarm, and there may need to be more options for more experienced investors or if a user wants to leverage their current membership.

❌️ Limited Geographical Locations: Moneyfarm currently only offers services to UK and Italian residents, significantly impacting customer offerings. It is important to note that the service plans to expand these locations in the future.

How Trustworthy is Moneyfarm?

Moneyfarm has proven itself as a trustworthy platform for investors so far. Still, the platform hasn't existed for an extended period which may leave your mind wondering if there are chances of the platform facing issues.

However, Moneyfarm insists that its asset allocation strategies have been devised over the last decade to help users and have low negatives tied to them, ensuring a range of investors can feel confident in the platform's offerings.

What Happens if Moneyfarm Went out of Business?

When considering new platforms, many investors worry about what would happen to their investments and fees if the platform went out of business.

If this were to occur with Moneyfarm, users would be compensated by the Financial Services Compensation Scheme, covering up to £85,000 of investments per person.

It is vital to keep the Financial Services Compensation Scheme in mind to ensure you are aware of the compensation you would be entitled to if using Moneyfarm and how you could go about ensuring this is in place if any risks were to arise.

A Breakdown of Moneyfarm's Fees

Of course, we can't write a Moneyfarm review without discussing the platform's fees, as we recognise that a considerable element of investing is selecting a platform that reflects your financial needs and the current financial markets. Let's take a look into Moneyfarm's management fees;

Actively Managed Portfolios

  • 0.75% from £500
  • 0.70% from £10k
  • 0.65% from £20k
  • 0.60% from £50k
  • 0.45% from £100k
  • 0.40% from £250k
  • 0.35% from £500k

On these fees, you can take away that you would pay the given percentage on a specific amount; for example, you would pay fees of 0.70% on the entire amount of £15k.

Moneyfarm uses exchange traded funds (also known as ETFs), which are great for beginners and anyone new to investing and trading. The main advantage of ETFs is how cheap they are, ensuring that those using Moneyfarm can enjoy low fees.

Fixed Allocation Portfolios

  • 0.45% from £500
  • 0.35% from £100k
  • 0.30% from £250k
  • 0.25% from £500k

A fixed allocation profile provides other cheap options for investors, further exemplifying why Moneyfarm is a popular platform for investors of all backgrounds.

If you have several portfolios, Moneyfarm works out your fees across the whole account (unless you use both actively managed and fixed allocation portfolios) instead of devising individual fee or pricing strategies. 

How Moneyfarm Invests

Now that you know how to sign up to Moneyfarm and the level of money you will need to pour into the software to get the most out of using it, you will likely be wondering how this money is invested and how the specific investment is pursued. 

Moneyfarm uses ETFs to invest, referring to the digital movement of money from one account to another. ETFs can be split into two categories; physical and sample. With a physical ETF, they have physical ownership of the underlying asset that is being tracked.

Alternatively, sample ETFs hold a sample of an asset, meaning that this investment doesn't include any ownership. 

Physical (also known as good) ETFs are generally better to invest in and use due to their ability to effectively track price changes in real time. Moneyfarm predominantly uses physical ETFs, ensuring investments are generally well tracked. 

Moneyfarm pursues an in house risk assessment to determine an individual's risk profile to ensure the most suitable ETFs are delivered to each portfolio. Suppose your finances or your chosen investment has high volatility. In that case, your risk level will be high, meaning your Moneyfarm must provide you with a profile with a matching volatility level. 

The platform puts a lot of work into devising user profiles and portfolios that meet their client's needs. Moneyfarm's moderators conduct extensive research to provide users with investment prototypes that reflect asset value and what they believe will work best for an individual's portfolio. 

Moneyfarm Competitors

The investing industry is a large area, with many platforms and different software types available for you to leverage your investments. But how do they compare to Moneyfarm, and is Moneyfarm the best for you to use?

Let's take a look into the platform's top competitors and how they differ from the excellent investment opportunities that Moneyfarm provides its users with:

Nutmeg

Nutmeg was the UK's first digital wealth management company and is now considered the largest. Similarly to Moneyfarm, the platform is incredibly transparent and aims to help its customers by providing simple solutions and investment advice.

Nutmeg offers a pension, lifetime ISA, stocks and shares, Junior ISA and general investment account options.

To use the platform, there is a similar signup process to Moneyfarm, in which users must share personal details, select their desired investment style and then team up with an advisor to receive their curated portfolio that meets their needs whilst reflecting the best investment options. 

Overall, Nutmeg is very similar to Moneyfarm and empowers users with investment decisions. Whilst Nutmeg may have the upper hand over Moneyfarm regarding years of experience, Moneyfarm has a better track record regarding risky portfolios. 

Betterment

Betterment is another investment platform enabling users to invest however they want with support and advice. The software currently has over 750,000 customers and fourteen years of experience to ensure new customers feel they can rely on Betterment.

Unlike Moneyfarm, Betterment offers crypto investing and provides its users with broad access to the crypto market with valuable advice and tools to help this process be more accessible than ever.

Despite the apparent dissimilarities between the two platforms, some crossovers exist, such as the simplified signup processes and customer service. 

When comparing Betterment with Moneyfarm, it is clear that Moneyfarm has a similar offering in terms of pricing, but the platform seems much easier to use and may help users to feel as though they can trust the software more than competitors. 

Wealthify

Another platform available to those looking for software similar to Moneyfarm is Wealthify. Wealthify aims to provide investing methods to everyone, with an expert team on hand to offer guidance and ensure investing is more accessible than ever.

One of the most significant differences Wealthify has from other platforms is its small startup fees, allowing users to get started from as little as £1.

This low cost truly reflects the platform's goal of making investing accessible to all whilst offering similar services to Moneyfarm, such as investment ISAs, Junior ISAs and Pensions. 

Another element of Wealthify that can help users feel more inclined to use the service is that the platform is incredibly welcoming, inviting users to meet their team and get to know the ins and outs of the investment company before using them. 

Conclusion 

With hundreds of types of software offering similar platforms to Moneyfarm, it can be challenging to see why this platform is special or should be chosen over competitors.

However, there are many excellent features included with Moneyfarm that users can enjoy and elevate their investing process using.

When comparing Moneyfarm to competitors and weighing up the platforms' benefits, it is clear to see that this Robo-advisor is one of the best on the market. From attentive customer service to offering simple signups and being FCA-regulated, plenty of excellent elements demonstrate why Moneyfarm is worth checking out for new investors.

We feel that Moneyfarm is best for those who don't have extensive prior knowledge regarding investment and need a push in the right direction to get started with this process.

With Moneyfarm, users have experts at hand to ensure their investments are going into relevant markets according to their user profiles whilst also having transparency and control over financial assets. 

The main downside to the platform that users need to consider before using it is the expensive minimum investment fee of £500. Of course, not everyone has that much money to immediate hand, but it is necessary to start using the platform. This is a downside and can prevent those ready to start investing from getting on to their journey.

Another negative is that the platform is currently only available for UK and Italian citizens, meaning that Moneyfarm is relatively closed off at this stage when considering the geographical impact. Despite this, the platform has built a loyal clientele in its current locations and has room to grow successfully.

Overall, the platforms' benefits outweigh the negatives, so long as you have the necessary funding to get yourself started with investing through Moneyfarm. The platform has the ability to help clients of all knowledge and experience levels but is definitely most suited to beginners and novices.

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