Moneyfarm Review

Could Moneyfarm be the right robo investment advisor for you?

Updated: July 26, 2021
Moneyfarm Review
CompareBanks is reader-supported. When you click through some links on our site, we may earn an affiliate commission. Learn more

Investing your money has never been easier. With a whole host of traditional and cutting-edge methods available to help you invest, the options are numerous. Whether you’re totally new to the concept or looking to try new methods, you can find affordable and accessible services to help you grow your money. One such option is Moneyfarm, an online and app-based platform or ‘robo advisor‘. We take a look at what the service has to offer in our Moneyfarm review.  

At a Glance

As ever, let’s start by taking a look at some of the positive and negative points about Moneyfarm. If you’re looking for a quick overview, here’s the best place to start:

Pros:

  • Straightforward to use; your portfolio is managed by Moneyfarm automatically
  • Withdrawals are free
  • No fees for exiting

Cons:

  • Not a very hands-on approach to investing
  • Need to start with at least £1,500
  • A fairly limited selection of portfolios

So, as you can see, it’s a fairly balanced picture, with a variety of points. As we’ll see, much of this depends on your situation and ambitions for the platform.

What is Moneyfarm?

Moneyfarm is an online investment advisor and digital wealth management company. Founded in 2012, it has since gone on to become one of the biggest companies of its kind in Europe. The service launched in the UK in 2016 and won ‘Best Online Direct to Consumer Investment Platform’ in 2018.

Over the years, Moneyfarm has grown significantly. They now offer a range of investment products, many of which are highly regarded. They manage more than £1 billion in assets, serving over 50,000 active investors across Europe.

With Moneyfarm, customers can choose from products like ISAs, pensions, and general investment accounts. The company claims that these accounts are ‘fully-managed portfolios designed around you’. Of course, this isn’t a savings account, and so as with any investment company, your capital is always at risk.

Who is Moneyfarm for?

Moneyfarm aims to be as easily accessible as possible. If you’re thinking about your personal finances and investments, it’s likely that you’ll be able to find a straightforward option to choose from. However, there are some caveats to this. Firstly, Moneyfarm recommends investing at least £5,000, which is no small amount. Alternatively, you could commit £1,500 and set up a Direct Debit of at least £100 each month.

So, clearly, you need to have some money saved up to use Moneyfarm. However, once you do, it’s easy enough to get started. What’s more, once your portfolio is set up, it’s automatically managed. This may be useful for first-time investors, but those looking for a more hands-on experience might find this frustrating. Moneyfarm also offers advice and strategy when it comes to investing, so if you’re learning the ropes, you’ll likely find this beneficial.

How does Moneyfarm work?

It’s easy enough to get started with Moneyfarm. First things first, you’ll need to sign up for an account. You’ll be able to do so in a relatively short space of time, and need to provide the standard details. Once you’re set up, you’ll then start to think about the type of product you want to choose (we’ll cover those later).

Before you get started with investing, you’ll first have to take an in-house risk assessment. This questionnaire helps to identify your financial and investment knowledge, as well as what timelines you’re working to. From here, it will match you with a risk portfolio. This is only a recommendation, however, so you’ll be able to choose any one you want.  

Once you’ve chosen a product and portfolio, you can start investing. Whether it’s by transferring your existing ISA or pension, or finding it directly via Direct Debit or bank transfer, it’s simple to do.

What features do you get with Moneyfarm?

There are several features that make Moneyfarm an appealing option for those new to investing. These can make the whole process fairly straightforward:

  • Personalised portfolio. Perhaps the stand-out feature is the fact that you get a portfolio that’s suited to your attitude to risk and investment needs. The questionnaire helps to understand your goals, knowledge, and comfort levels with market movements. There are seven different portfolios available, which is less than some competitors but does give a good spread of risk.
  • Investment advice. Moneyfarm has several ways it helps to maximise your money’s potential for growth. Alongside some complex algorithms, they use expert advice to make sure it’s invested in the right place. What’s more, it’s updated monthly to keep things relevant.
  • Investment strategy. There are various strategies in place to make sure your money is working as hard as possible. Moneyfarm uses assets across the world to minimise risk while also keeping costs low. They plan for the future to take into account potential fluctuations.

Clearly, these can go a long way to helping someone who’s never invested before. However, if you’re already experienced or want to take a more hands-on approach, you might find them a little restrictive.

What options do Moneyfarm offer?

There are three main options when it comes to investing with Moneyfarm. You can choose from a general investment account, a stocks and shares ISA, and a pension. We’ve got a few more details about each one below:

General investment

With this account, you can get the same hands-on support you get with other options, but a lower cost and risk. It’s a good choice if you’ve already used up your ISA allowance for the year but want to keep investing.

Unlike other options, there are no limits on what you can invest here, beyond the initial £1,500 minimum. However, you may have to pay tax on any gains you make depending on the tax year and how much you make.

Stocks and shares ISA

This ISA is very similar to a lot of other products out there. The major difference is that you don’t get to select the investments you want to make. Moneyfarm’s investment advisors manage your portfolio instead, based on how much risk you want to take on.

One of the nice features is that you can transfer money from your existing ISA with this option. By filling out a form, you can close your old account and transfer everything into this one, which takes 15-30 days.

Pension

Much like with the ISA, your pension is invested based on your goals and desire for risk, as well as factors like your retirement date and investment amount. You can use their pension calculator to work out how much you should be saving based on your retirement goals.

You also get the option to transfer your existing pension. Again, this is a relatively straightforward process and takes around 3-4 weeks.

One nice feature is that you get the option for pension drawdown when you enter retirement, giving you the opportunity to manage your savings when you need them.

What are the charges for using Moneyfarm?

As with many similar services, the amount you’ll be charged for using Moneyfarm depends on a variety of factors. The main element is based on how much you invest. Generally, the more you put it, the cheaper it is. Below, we’ve highlighted the examples:

  • £1,500 – £10,000 costs 0.75%
  • £10,001 – £50,000 costs 0.60%
  • £50,001 – £100,000 costs 0.50%
  • Anything over £100,000 costs 0.35%

As well as these fees, there are also two other costs to bear in mind. The first is the fund fee, which is the amount charged by providers, costing 0.20%. There is also the market spread fee, which can be up to 0.09%.

How safe is Moneyfarm?  

As with every type of investment, there is always a risk when you invest capital. Your investments can go up and down, depending on the market. As such, you want to make sure that there is a high level of security in other areas.

For starters, Moneyfarm is authorised and regulated to give investment advice by the Financial Conduct Authority. They also keep your money and investments in a separate account. They’re ring-fenced with another bank, meaning they won’t touch it.

Finally, Moneyfarm is covered under the Financial Services Compensation Scheme. As such, your money and investments up to £85,000 are covered should the company go under.

What about customer service?

The customer service from Moneyfarm is generally pretty positive. On Trustpilot, they get a score of 4.6 out of 5 from 433 reviews. Many of these comments praise the level of customer service on offer, as well as the investment advice.

They have a free phone number, which is open Monday – Thursday, 9am – 7pm and Friday, 9am – 6pm. There is also email, Twitter, and Facebook messenger options, and you can schedule an appointment.

What else makes Moneyfarm stand out?

The ease-of-use is the main feature here. If you’re serious about trying investment, there are some good options available with minimal effort involved. What’s more, customers in Italy, Germany can also invest using the service. Similarly, US customers can invest with Moneyfarm, provided they’re a UK resident. Moneyfarm is FATCA compliant and registered FFI with the U.S. Internal Revenue Service.

Moneyfarm: The Verdict

Overall, there is a lot to like about Moneyfarm. The service is simple to get set up and started with, and there are several options available depending on the type of investment you want. The suitability questionnaire is a nice touch, as it matches your desire for risk and goals to a portfolio that’s going to suit you. It’s maybe not for the experienced investor, but a good choice for everyone else.

Matt Crabtree
Matt Crabtree
Hi, I'm Matt and I'm an author here at CompareBanks. I write about a range of topics including UK bank stories and the latest news in the banking world. If you'd like to get in touch, feel free to send me an email using the link in my bio.

Related Articles

Stake Review - Does this Investing App Beat Others?
Stake Review - Does this Investing App Beat Others?
Interested in getting into stock trading but not sure where to start? Or maybe you’re...
RoosterMoney Review
RoosterMoney Review
Developing good financial habits at an early age can bring a whole host of benefits....
Plum Review
Plum Review
Saving money is an important part of being financially stable. Putting money aside...
What is IR35?
What is IR35?
With more and more people becoming self-employed and working on a freelance basis,...

Mentioned Banks

About ClearBank ClearBank is a new clearing bank founded by WorldPay founder Neil Ogden. It is the first new clearing bank opened in the UK in 250 years. It is a ‘bank for banks’ and...
Learn More

Comments

Leave a Comment