In a nutshell
Moneyfarm is like a financial advisor on your phone (or website), their experts will work with you to determine the best investment strategy. It’s low cost, with an excellent investment track record and great customer service. 5 stars from us.
cracked open 🥥
You may not be too familiar with Moneyfarm, but they’re actually one of the biggest digital investment platforms in Europe, with over £3.5 billion of customers' money invested with them, and have been working with UK customers for over 5 years now. There's over 125,000 customers!
But they're more than just digital, their experts will get to know you, determine your knowledge, experience and objectives and match that with the right investment strategy.
You’ll actually have a personal investment advisor, a real person, by your side (well, virtually by your side). Who will help you determine the best investments for you, and of course, answer any questions you have.
Moneyfarm will handle everything for you (unless you’d like to be involved of course). From getting you started, to managing your investments over time. You just sit back, relax and put your feet up.
And before you go thinking ‘that must be expensive’, it’s actually one of the cheapest ways to invest out there, with just one low annual fee.
On top of that, they have a very impressive track record for successful investing – beating the industry average by 2% per year, every year for the last 5 years. This average plan has made 47% in the last 5 years. With the best performing plan making a whopping 91% over 5 years!
Let’s dive into how Moneyfarm works a bit more and what you need to know.
If you like what you hear already, you can get started on the Moneyfarm website¹.
Is Moneyfarm good for beginners?
Yep! It’s great for beginners in fact. It’s an investment platform that gives you a personal investor advisor to help you take your first steps and explain everything to you, along with an investment strategy for the future.
An advisor is completely free too (we’ll explain more about this later).
You’ll learn a lot – everything is completely transparent, in terms of where your money is invested and how the investments within your portfolio (that's a fancy word for your investments) are performing.
The only downside for a beginner? You will need to open your account with at least £500 to begin with.
Nuts About Money tip: set up a regular payment from your bank account each month. It soon adds up!
How Moneyfarm works
Moneyfarm is super simple. It’s designed to be as easy as possible to get you investing.
First, you’ll need to pick which type of investment account you’d like, that’s either a Stocks & Shares ISA, Junior ISA, a personal pension (SIPP), or a regular General Investment Account (more on these below).
Then, they’ll need to work out the right investment strategy for you. So they’ll need to know a bit about you, what your financial goals are, and what your attitude to investing is.
It’s straightforward to set up, you can do it yourself online via their website or on your mobile phone through an app.
Once Moneyfarm has learnt about you, they’ll give you a personalised investment recommendation from 1 of 7 investment portfolios (more on these below too), and then you’re good to go.
Your money is in safe hands and will grow over time, it’s like magic! All that’s left to do is put the kettle, put your feet up and binge watch Netflix.
Your account options
Why pay tax on savings when you don’t have to? Well, with Moneyfarm you can save your money in 4 account types, including a Stocks & Shares ISA. Here’s the 4 options:
- General investment account: this is the standard account, where you might have to pay tax on the increase in your money (it’s called Capital Gains Tax).
- Stocks & Shares ISA: save up to £20,000 per year with everything being completely tax free. You can transfer any of your current ISAs over to Moneyfarm for free too, and they’ll handle everything. This is also flexible with Moneyfarm – so you can withdraw money and add it back in, in the same tax year and not affect your ISA allowance.
- Junior ISA: save up to £9,000 per year, per child. Separate to your own savings, and all in their name. They’ll be able to access the money when they turn 18.
- Pension: save for your retirement and benefit from tax contributions from the government (25% extra added to your account on everything you pay in).
Learn even more about your account options on the Moneyfarm website¹.
Your personal investment advisor
Moneyfarm is one of the very few investment platforms that is able to give financial advice (many other platforms let you invest, but don’t provide you with advice, such as Nutmeg).
This means you can speak to a real person, over the phone or over live-chat, and they’ll learn about you and determine your best options. It’s all free too.
Moneyfarm advisors are experienced investment professionals, and experts in pensions too, so they can help with retirement planning and your drawdown options (this is when you start taking the money from your pension).
And best of all, it’s not a one-time chat. They’re with you whenever you need them. They’re there to manage your portfolio with you and make sure you’re getting the best outcome possible. You're in safe hands.
Your portfolio options
When you first get started you’ll be matched with 1 of 7 investment portfolios (a group of investments), that best suit your knowledge, experience and savings goals.
All portfolios are all built from a mixture of exchange-traded funds (ETFs). ETFs are a group of stocks and shares with a common theme, for example, companies in a specific industry, or the top 100 companies in the UK.
ETFs are used because they’re a great way to invest, and very low cost. They’re bought and sold on stock exchanges, just like shares in a company are, which means the experts at Moneyfarm can quickly buy and sell ETFs that make up a portfolio to take advantage of new opportunities to grow the portfolio more.
Socially responsible portfolios
Save the world and make money. It’s a win-win. We’re big fans of ethical investing here at Nuts About Money.
With Moneyfarm, you can choose an investment option created to support change in the world, by investing your money in the most forward-thinking companies that have a positive impact on the environment and society as whole. So no fossil fuels, no corruption, no child labour, among many more factors.
Investments are selected using a popular framework for assessing the impact and standards of an organisation, called ESG, which stands for environmental, social and governance.
Not only are you supporting a positive change in the world with your money, but Moneyfarm’s socially responsible portfolios are top performers too, some by a massive 5% over regular (non-ESG) portfolios. It really is a win-win.
You can learn more about their socially responsible portfolios on the Moneyfarm website¹.
Fixed allocation portfolios
Instead of having the experts manage the portfolio for you (which is called an actively managed portfolio), Moneyfarm have the option to open a fixed allocation portfolio.
This is where the experts put together the portfolio first of all, but then won't continually make changes to it, like they would with the regular portfolios. It is fixed.
The experts will make changes once per year however to make sure it's set up for success the following year. And they are monitored to make sure it's all going smoothly, and will step in to make changes if not.
The benefits of this are much cheaper fees, with fees starting at 0.45% and go as low as 0.25% (more on fees later).
Moneyfarm investment record
And now for the best bit. Moneyfarm’s track record for investment is quite simply, awesome.
From the 7 portfolio options you can choose from, 6 of them are beating the average return from a huge range of investment providers (often called wealth managers), that are tracked by an independent review (called Asset Risk Consultants) – compared against some household names like Barclays, HSBC, Investec and Blackrock.
As an example, one portfolio option with Moneyfarm has made 9.4% per year on average for the last 5 years, with the average return of other investment providers being 7.4% – that’s a huge 2% more per year, every year.
And the best performing portfolio with Moneyfarm has averaged 11.4% per year!
It’s safe to say that Moneyfarm know a thing or two about investing, and the good performance is down to what’s called ‘active management’ – which is constantly reviewing investments, always looking for better opportunities and a focus on keeping your money safe.
How much is Moneyfarm?
Moneyfarm makes fees simple. There’s just one fee, called a management fee. Which is charged each year, and it’s a percentage of the money you have invested. The charge is automatically deducted too, so you won’t have to worry about paying this. The amount of money they’ll make you over the years will more than cover it!
It’s free to set up your account and chat with an advisor, you’ll only be charged once you start investing.
The management fee starts at 0.75% for the first £10,000, and then reduces down if you have more money invested. And when the fee reduces, it reduces on the whole amount (so you can save yourself quite a bit as your savings grow).
For example, if you have £15,000 invested, you’d pay 0.70% on the whole amount.
Here’s the full fee breakdown:
And for fixed allocation portfolios:
However, Moneyfarm invests in ETFs (a group of investments, called a fund) as part of their portfolios, and these ETFs have (low) fees themselves – these are fees for anyone who invests in the fund, whether it’s with Moneyfarm or anyone else. These fees are passed onto you too, and deducted automatically. They average 0.20% per year.
As Moneyfarm buys and sells ETFs within their investment portfolios, there’s an additional hidden fee too, which exists in all investing. This is called a spread fee. Which is the difference between the price you can buy an ETF for, and the price you can sell the ETF for (at the same time), and this is a maximum of 0.09%.
So all in all, these fees are low. If you compared with Nutmeg, another popular investment manager regarded as low-cost, you’d be paying a 0.75% management fee up to £100,000, and 0.35% after that. Plus the addition of ETF fees (0.20%) and the spread fees (0.09%). So Moneyfarm it’s quite a bit cheaper! (Plus they have a better track record for making money).
Moneyfarm are confident you’ll stay with them, they make it completely free to move your money elsewhere if you want to, not that you will!
It’s great! You’ll get assigned a personal investment advisor to help you decide the best investment portfolio for you. They’re on hand to guide you through any questions you might have, and you can chat to them by phone, email or through a chat feature on their website and phone app.
Is Moneyfarm safe?
Yep! It’s authorised and regulated in the UK by the Financial Conduct Authority (FCA), which means they have been approved and are trusted to look after and protect your money.
Your money is also protected by the Financial Services Compensation Scheme (FSCS), which means that should anything happen to Moneyfarm, such as go out of business (very unlikely), your money is protected up to £85,000.
However, your money is in fact held separately in a protected trust account – so separate to Moneyfarm’s business accounts. Which means all the money would be returned to customers in the event Moneyfarm closed down.
A quick recap and more info
Mobile app: there’s a great mobile app, Moneyfarm is rated 4.6 out of 5 in the App Store and 4.3 out of 5 in Google Play. Plus the website of course.
Minimum investment: you have to deposit at least £500 to open an account, or by transferring an existing ISA, which is free to do.
Withdrawing money: you can withdraw your money whenever you like, and there’s no fee for opening or closing your account.
Flexible ISA: you can actually withdraw your money from your ISA if you need it and return it in the same tax year without affecting your £20,000 ISA allowance.
Moneyfarm customer reviews
Wow! We’ve not seen a financial services firm this popular in a while.
On Trustpilot, the popular reviews website, it has a rating of 4 out of 5 from over 1,000 reviews. That's really good and in financial services, where scores are typically very low, that’s incredible.
It’s all down to the great customer service from investment advisors, their great track record of making money, and the easy to use website and app.
Pros and cons
Let's run through a quick recap of the pros and cons:
- Great for beginners and hands-off investors
- Easy to use
- Free personal investment advisor
- Great track record for growing money
- Socially responsible options
- Have to invest at least £500
- Not much else!
We’re big… make that massive… fans of Moneyfarm. They’ve got a great all round service that is unlike any other investment provider.
Not only have you got your own personal investment advisor, but you’ve also got a great website and app to manage and view your money and investments.
Normally, you’d get one or the other – a personal advisor who handles your investments for you but you get no transparency over your money or investments, or an investment provider with the technology to show your investments but doesn’t give you investment advice, you have to manage it all yourself. Moneyfarm is the best of both worlds!
The fees are super low too, in fact, it’s one of the cheapest investment providers out there.
Their track record for investing is also fantastic, along with great customer service, and a favourite of ours: your investments can be socially responsible too.
We love it. It’s a huge 5 stars from us.
If Moneyfarm is for you, here's where to get started with Moneyfarm¹.
Is there a deal?
Yep! And it’s a pretty big one. Get 6 months fee-free! Simply sign up via this link Moneyfarm website¹.