Moneyfarm vs Vanguard - which is best?

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Fact checked.
May 19, 2024

In a nutshell

Moneyfarm wins overall. It’s great. It’s super easy to use, and their experts will manage your investments for you. Vanguard is great too, and low cost, but you’ll be making the investment decisions. Moneyfarm is the winner.

Moneyfarm vs Vanguard

Keen to save and invest your money with experts using an investment platform? (A place to invest.) Great idea. Investing with a long-term view and with expert help can really make a difference to your life over time.

Plus, in the UK you can save a lot of cash with some amazing tax-free benefits by saving via an ISA and a pension (more on those later).

Vanguard was founded in 1975, and has been operating in the UK for the last 15 years. It has over 30 million customers worldwide and is one of the biggest brands when it comes to long-term investing.

Vanguard asset manager

Moneyfarm was founded just over a decade ago, they use technology to make investing easier, and cheaper than ever before. It's becoming very popular after launching in the UK in recent years, and already has over 90,000 customers.

Moneyfarm app

The difference between them is Vanguard is an asset manager (they simply allow you to buy, hold and sell investments), and Moneyfarm is a wealth manager, they manage your investments and help you grow your money over the long-term.

Both great options, but which one is actually better? Let’s find out.

Moneyfarm wins!

With Moneyfarm, the experts handle everything for you. Highly recommended.

Visit Moneyfarm¹Visit Moneyfarm¹

Capital at risk.

Moneyfarm vs Vanguard: ease of use

Investing can be complicated, and anything to make it easier is great, and that’s where Moneyfarm comes in, they make it as simple as possible. Vanguard is easy to use if you know what you’re doing – it’s a bit more complicated overall, and you’ll be making the investment decisions.

The great thing about Moneyfarm is that you don’t need to know anything about investing, it’s all taken care of for you.

With Moneyfarm, you’ll simply use their website, or download their app, and answer a few simple questions aimed to work out the best investment options for you (how your money should be invested), if you’d like to invest in socially responsible companies (e.g. no fossil fuels), and then simply select which account you’d like, such as a General Investment Account, ISA, or pension (more on these below).

Moneyfarm - getting started

It gets even better though, if you’re not sure about what to choose, there’s experts on hand to guide you through the process and help decide the best investments for you too. This is over the phone and they’re very responsive (the average response time is less than 1 minute) – alternatively, you can schedule a phone appointment to suit you, or email if you prefer.

Moneyfarm – book a call

Once you're all set up, you’ll be able to see your total balance any time you like, the investment performance (how well your money has grown (hopefully)), add/remove money, or adjust regular payments – everything you’d want to do can be done in the app or website.

Moneyfarm portfolio

All sounds pretty great. What about Vanguard?

With Vanguard, the process is similar, except there’s a bit less guidance. There’s not experts on hand to help you. You’ll pick from a range of investment options that you think are best suited to you, it's fairly clear if you know what you're doing when it comes to investing. And you’ll also choose what type of account you want to open (e.g. ISA and pension).

Vanguard investment options

Unfortunately there's no app, and the website is fairly outdated. It’s a much more traditional investment company.

So which is better? They’re both easy to use if you know about investing. If you don’t, Vanguard is a bit complicated and there’s lots of jargon. Moneyfarm handles everything for you and everything is explained. Plus, with experts on hand to help and better guidance, we’re going to give this one to Moneyfarm.

Winner: Moneyfarm

Moneyfarm vs Vanguard: account options

When saving and investing long-term, there’s some great tax-free account options in the UK, the two big ones being a Stocks & Shares ISA and a pension.

A Stocks & Shares ISA (Individual Savings Account) is where all your profit is completely tax-free. How good is that? You can invest up to £20,000 per year too. However you can only pay into one Stocks and Shares ISA each tax year (April 6th to April 5th the following year).

Stocks & Shares ISA

A pension, technically called a personal pension, is where your money also grows tax-free, but you also get to put money in tax-free too. This works by the government giving you an amazing 25% bonus every time you contribute to your pension (which is the tax you’ve paid on your income being refunded back to you).

Personal pension

By the way, if you're just looking to save for a pension, check out PensionBee¹ – they're super easy to use, have low fees and a great track record of growing money.

Note: you might have to pay tax when you withdraw your pension later down the line. It depends how much you earn at the time. You can find out more in our tax on pension article.

Plus, you can also save for your kids future with a Junior ISA too, where everything is tax-free, and you can save up to £9,000 per year.

Junior ISA

Finally, you don’t need to invest via any of these options if you don’t want to. There’s a standard account with no tax-free benefits, called a General Investment Account (GIA).

With both Moneyfarm and Vanguard, the account options are both the same, so you can save via:

  • Stocks and Shares ISA
  • Personal pension
  • Junior ISA
  • General Investment Account (GIA)

As both have all of the account options in the UK, we’ll call this one a draw.

Winner: it’s a draw!

Moneyfarm vs Vanguard: investment options

With Moneyfarm, there’s 3 simple options to choose from:

  • Fully managed: standard option where experts manage the investments
  • Socially Responsible: ethical investment option (e.g. no fossil fuel companies)
  • Fixed Allocation: investments with less involvement from the experts

Within each investment option, you’ve then got to choose which risk level you’d like. Don’t let the word risk put you off investing, it’s just how investing works. With higher risk levels, your money can grow much more over time, but there might be more volatility (bigger ups and downs) along the way.

With lower risk options, the aim is to grow slow and steady with less ups and downs.

Investing risk level

With Vanguard, the investment decisions are more or less up to you. You’ll pick which investments you want from a range of Vanguard's own investment funds.

Investment funds are a group of investments, such as stocks and shares (where you own a part of a company, a share of a company), and this group of investments is managed experts (so Vanguard in this case). They’ll buy and sell new investments regularly within the fund to achieve the fund's goals (normally long-term growth).

Stocks and Shares

There's a wide range of funds available, in fact there's nearly 100, all managed by Vanguard, and each one has a slightly different objective and a different investment structure – for instance some are only ethical investments (called ESG – environmental, social, governance). They also cover a range of risk levels.

Ethical investing (ESG)

Although there’s more options with Vanguard, and this might sound better, you do have to know what you’re doing and which options are right for you. With Moneyfarm, it’s all handled for you, you don’t need to know a thing. For this reason we’re going to give this round to Moneyfarm – it’s much simpler, and you can’t go wrong.

Winner: Moneyfarm

Moneyfarm vs Vanguard: fees

When it comes to the costs, they’re both very good value. Fees are a very important topic in investing – high fees can eat away at the growth (profit) of your money every year, which can have a huge impact on the total value in the future.

With Moneyfarm, you’ll pay a management fee based on the total value of your investments, which starts at 0.75% and reduces and you have more saved. Here’s the exact costs:

Up to £10,000 0.75%
£10,000 to £20,000 0.70%
£20,000 to £50,000 0.65%
£50,000 to £100,000 0.60%
£100,000 to £250,000 0.45%
£250,000 to £500,000 0.40%
£500,000+ 0.35%

You’ll also pay fees on the investments themselves, and this averages at 0.20% per year. Plus there can be fees for the experts to buy and sell investments and is typically anywhere up to 0.09% per year.

Add all of those together to get your total fee for Moneyfarm. As an example, a £10,000 balance would be 1.04%.

Moneyfarm fees

It’s a bit more complicated with Vanguard, you’ll also pay an annual management fee, and this is a fixed 0.15% (capped at £375 per year).

You’ll then pay a fee for the investments, and this changes depending on which investments you choose, but on average this is 0.20%. Plus the transaction fees to buy and sell investments, up to 0.09%. Which is the same as Moneyfarm.

There’s also one-off costs to buy certain investments (exchange-traded funds), and this ranges from 0.03% to 0.45%. If you want to buy an ETF immediately, you’ll also have to pay £7.50 (the alternative is to wait for a few days for them to process transactions in bulk for free).

So, overall with Vanguard, you’ll be paying around 0.44% per year, plus anywhere up to 0.45% on each investment purchase, depending on which investments you want. So you’re looking at anywhere between 0.44% to 0.89% per year depending as a total.

As a direct comparison, we can simply compare the annual management fee, as the costs for the investments are very similar with both Moneyfarm and Vanguard.

The annual fee is 0.35% to 0.75% with Moneyfarm and 0.15% with Vanguard. That’s quite a big difference. However it is expected, Moneyfarm handles everything for you and has experts on hand to provide advice. With Vanguard, you’re simply paying for access to the investments, and you make all the decisions yourself, and so comes in cheaper.

Vanguard fees

Vanguard is cheaper, and so win this round! It’s great value, and so is Moneyfarm to have experts handle things for you.

Winner: Vanguard

Moneyfarm vs Vanguard: customer reviews

To get a good idea of overall customer satisfaction, we like to look at customer reviews. We’ll use Trustpilot to do this.

With Moneyfarm, it’s got an excellent rating of 4.4 from over 750 reviews. That’s awesome.

Moneyfarm customer reviews

Lots of the customers love how easy it is to use, and the great investment performance. Plus the service of the expert advisors.

Vanguard has a rating of 4.1 from over 2,200 reviews. That’s almost as good.

Vanguard customer reviews

Lot’s of the reviews mention the customer service and the low fees. Although there’s a few negative reviews about the website being outdated, and not having an app (it’s a more traditional investment firm).

So, both have great ratings, but Moneyfarm is a clear winner.

Winner: Moneyfarm

Moneyfarm vs Vanguard: the winner

Moneyfarm wins! Although it’s close and Vanguard is a great option.

Moneyfarm wins overall, it’s a lot easier to get started and use – you can use their website and an app on your phone to check your balance whenever you like, which you can’t do with Vanguard, and Moneyfarm has experts on hand to help you get started and later whenever you need them, and they’ll help you decide your best investment options.

The account options are great with both, they both have a pension for long-term investing (recommended). However, if you’re only looking to save for a pension, check out all your options with the best personal pensions. Spoiler: PensionBee¹ is top with Moneyfarm not far behind.

When it comes to investment options, Moneyfarm is super simple to understand and pick the right one for you (there’s only 3) – and then their experts handle all of the investments for you. With Vanguard, there’s a much wider range (only their own funds), and you’ll have to make the investment decisions yourself.

When it comes to fees, Vanguard is cheaper, it’s great value. Moneyfarm is also low cost and great value – the difference is simply whether you want the experts to manage your investments for you, or not. If you do, Moneyfarm is for you.

There we have it, Vanguard and Moneyfarm are both excellent options. Overall, Moneyfarm wins.

We’re big fans of Moneyfarm, it’s a strong recommendation if you’re not sure where or what to invest in. You can learn more by reading out 5 star Moneyfarm review, or get started by visiting the Moneyfarm website¹.

No items found.

Moneyfarm wins!

With Moneyfarm, the experts handle everything for you. Highly recommended.

Visit Moneyfarm¹Visit Moneyfarm¹

Capital at risk.

Moneyfarm wins!

With Moneyfarm, the experts handle everything for you. Highly recommended.

Visit Moneyfarm¹Visit Moneyfarm¹

Capital at risk.

No items found.

Moneyfarm wins!

With Moneyfarm, the experts handle everything for you. Highly recommended.

Visit Moneyfarm¹Visit Moneyfarm¹

Capital at risk.

No items found.
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Moneyfarm wins!

With Moneyfarm, the experts handle everything for you. Highly recommended.

Visit Moneyfarm¹Visit Moneyfarm¹

Capital at risk.

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