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Moneyfarm Review

Updated On:
June 14, 2022
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Moneyfarm Review

Please note: As with all investments, your capital is at risk.

Contents:

1. What is Moneyfarm?

Moneyfarm, established in 2011, is a robo advisor that provides you with a personalised investment plan based on your risk preferences and goals.

With Moneyfarm, you can invest in one of seven risk-rated portfolios recommended to you based on the result of an online assessment. Each portfolio comprises a mix of cost-efficient exchange-traded funds (ETFs).

To get started, you’ll be asked to complete a short survey so that Moneyfarm can better understand how you approach your finances before matching you to your investment portfolio.

With Moneyfarm, you can invest in a stocks and shares ISA, general investment account, private pension and junior ISA. Once you’ve funded your account, Moneyfarm’s team of investment experts will manage your portfolio for you. You will also have access to personalised financial advice.

Click here to learn more about Moneyfarm.

2. Moneyfarm’s Pros and Cons

Here are the pros and cons of using Moneyfarm in the UK:

Pros Cons
  • Moneyfarm offers a wide range of accounts - you can choose from a stocks and shares ISA, general investment account, private pension and junior ISA.
  • Moneyfarm has a high minimum investment amount of £500.
  • Moneyfarm offers investment advice.
  • Moneyfarm has a slightly complex fee structure.
  • Moneyfarm offers socially responsible portfolios.
  • There are only seven portfolios available.
  • The fees are affordable to mid-range.
  • Each portfolio is made entirely of ETFs.
  • Moneyfarm is one of the best options for people who do not want to pick and choose stocks.
  • Experienced investors might appreciate the actively managed portfolios.
  • 3. Is Moneyfarm any Good?

    Moneyfarm is one of the best robo advisors in the UK at the moment because of its wide range of accounts, easy-to-use mobile app and web platform and socially responsible portfolios.

    Moneyfarm is also rated Excellent on Trustpilot with 4.5 stars out of 5 from 748 reviews (at the time of writing).

    4. How Does Moneyfarm Work?

    With Moneyfarm, you can invest via a stocks and shares ISA, general investment account, self-invested personal pension (SIPP) and junior ISA. You can also take advantage of some specialist features such as socially responsible portfolios and investment advice.

    Here is a detailed breakdown of how Moneyfarm works:

    Stocks and Shares ISA

    1. Moneyfarm’s Stocks and Shares ISA offers a fully managed, easy and tax-efficient way to grow your money for the future, with a current maximum investment of £20,000 per tax year.
    2. Moneyfarm will manage your Stocks and Shares ISA for you through a globally diversified portfolio that best suits your needs.
    3. Transferring an ISA to Moneyfarm is free and handled by the Moneyfarm team.
    4. Please note that Moneyfarm has a minimum investment amount of £500.
    5. Click here to learn more about Moneyfarm’s Stocks and Shares ISA.

    Private Pension (SIPP)

    1. Moneyfarm’s self-invested personal pension (SIPP) offers a globally diversified, tax-efficient private pension targeted at your retirement goals.
    2. You’ll usually receive a 25% boost to your pension in the form of tax relief without needing to claim from HMRC. For higher or additional rate taxpayers, up to 45% can be claimed back through your annual tax return.
    3. Moneyfarm offers free pension drawdown from the age of 55, where you can withdraw up to 25% of your pension as a tax-free lump sum or in instalments.
    4. You can also pass on funds from your pension to your beneficiaries, free from inheritance tax.
    5. Click here to learn more about Moneyfarm’s SIPP.

    General Investment Account (GIA)

    1. Moneyfarm’s General Investment Account allows you to make unlimited contributions so that you can invest beyond your ISA allowance. Funds can be invested and withdrawn at any time with no additional fees.
    2. With a Moneyfarm GIA, you can open multiple portfolios with different risk levels to match each of your goals.
    3. Moneyfarm will provide active, hands-on management of your GIA by building and rebalancing your portfolio(s) for you.
    4. Click here to learn more about Moneyfarm’s GIA.

    Junior ISA

    1. Moneyfarm’s Junior ISA lets you save up to £9,000 a year on behalf of your child until they turn 18.
    2. Junior ISAs, like other ISAs, are tax-free, which means you do not pay income or capital gains tax on the proceeds from your investments.
    3. Moneyfarm’s Junior ISAs use the same investment strategy as the classic and socially responsible portfolios.
    4. Click here to learn more about Moneyfarm’s JISA.

    Socially Responsible Portfolios 

    1. Moneyfarm’s socially responsible portfolios comprise a selection of ETFs with company stocks and other assets that prioritise environmental, social and governance factors (ESG).
    2. When you choose a socially responsible portfolio, you are essentially investing in some of the world’s most forward-thinking, sustainable, green and impactful companies.
    3. Click here to learn more about Moneyfarm’s ESG-themed socially responsible portfolios.

    Investment Advice

    1. Moneyfarm offers free access to their investment consultants, who provide guidance to help you feel more confident about your investment decisions. You’ll also receive digital investment advice to keep you on track and make sure your portfolio is suited to you, even if your circumstances change.
    2. Moneyfarm provides expert opinions on your existing investments, taking into account performance, cost and quality, as well as retirement planning and your drawdown options.

    5. What Are Moneyfarm’s Fees?

    It’s completely free to download the app.

    Then Moneyfarm charges a management fee depending on how you choose to invest. 

    Management fees cover all of your Moneyfarm products and are calculated as follows:

    1. 0.75% on investments less than £10,000
    2. 0.70% on the portion between £10,000 and £19,999
    3. 0.65% on the portion between £20,000 and £49,999
    4. 0.60% on the portion between £50,000 to £99,999
    5. 0.45% on the portion between £100,000 to £249,999
    6. 0.40% on the portion between £250,000 to £499,999
    7. 0.35% on the portion over £500,000

    Fees are calculated daily based on the total market value of your portfolio.

    On average, you’ll be charged 0.2% per annum in exchange-traded funds (ETF) fees. This is built into the cost of the ETF on any given day, so you won’t see fund charges being deducted from your portfolio directly.

    6. How Do I Invest With Moneyfarm?

    To invest with Moneyfarm, you need to sign up through the Moneyfarm app, which allows you to invest via a stocks and shares ISA, general investment account, private pension and junior ISA. You will also benefit from free, personalised digital investment advice from Moneyfarm’s investment consultants.

    Once you’ve completed a questionnaire specifying your investment goals, risk preferences and financial habits, Moneyfarm will recommend a selection of its seven risk-rated portfolios. 

    These range from 1 for the lowest risk to 7 for the highest risk investment product. Portfolios on the lower end of the scale mainly comprise lower-risk fixed-income investments, including government, corporate and emerging market bonds, whereas portfolios on the higher end mainly comprise stocks and shares.

    For example, Portfolio 1 comprises 53% cash and short-term government bonds, while Portfolio 7 consists of 70% developed markets equities.

    You will need a minimum of £500 to begin investing with Moneyfarm.

    7. Is Moneyfarm Good for Beginners?

    Yes, Moneyfarm is good for beginners. Moneyfarm is designed to make personal investing more accessible to the average person by arranging and managing your investments for you.

    It’s a great starting point for those who want to watch their money grow without dealing with the nitty-gritty details of investing. You can use the Moneyfarm app, which is available on iOS and Android, to view your portfolio and monitor your investment performance.

    8. Is Moneyfarm a Passive Investment?

    No, Moneyfarm’s portfolios are not passive investments. Although Moneyfarm uses some passive index funds and exchange-traded funds (ETFs) to build their portfolios, the final investment portfolio you purchase is actively managed by the team at Moneyfarm.

    9. Is Moneyfarm Expensive?

    No, Moneyfarm is not expensive. Moneyfarm falls into the mid-price range category. Use our Robo Advisor Charges Comparison Table to understand how Moneyfarm compares to other robo advisors in the UK.

    10. Is Moneyfarm Regulated by the FCA?

    Yes, Moneyfarm is authorised and regulated by the Financial Conduct Authority (FCA). Have a look at its regulatory permissions on the FCA Register.

    11. Is Moneyfarm Safe?

    Yes, Moneyfarm is safe. When you invest with Moneyfarm, your money is protected by the Financial Services Compensation Scheme (FSCS) up to a maximum of £85,000. This means you can get your money back up to £85,000 if Moneyfarm goes bust. Keep in mind that the FSCS does not cover losses arising from the performance of any of your investments.

    12. How Do I Open an Account With Moneyfarm?

    To open an account with Moneyfarm, click here.

    13. Alternatives to Moneyfarm

    Alternatives to Moneyfarm in the UK include InvestEngine and  Plum.

    InvestEngine

    InvestEngine is a UK investment platform providing a choice of managed portfolios tailored to you and commission-free DIY investing to help you build long-term wealth. Users can invest in ETFs through a Stocks and Shares ISA, Personal Account or Business Account.

    Visit: InvestEngine

    See: InvestEngine Review‍

    Plum

    Plum has various funds to choose from based on your risk preference and values. The Plum app calculates how much you can afford to set aside and automatically invests that amount for you. Plum offers a Stocks and Shares ISA, SIPP, and other money management tools.

    Visit: Plum

    See: Plum Review


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