What kind of solution is Moneyfarm?
Moneyfarm lets you invest but without the common complexities that are usually associated with investing. It’s mostly a hands-off experience where you simply fund your account and then everything else is pretty much done for you.
After opening your account, you’ll be presented with three different products to choose from: general investment account, Stocks and Shares ISA, and pension.
You will be prompted to fill out a quick questionnaire with questions to determine your knowledge, experience, risk appetite and objectives.
Based on your answers, you will be matched to one of seven globally diversified portfolios.
Alongside the recommended portfolio that Moneyfarm thinks best suits you are two more options so that you can decide if you want a little more or less exposure to volatility, and optimise your potential for growth.
All that is left now is to transfer money into your account and then sit back and watch it potentially grow without lifting a finger.
Our bottom line
Moneyfarm aims to help you make the most of your money in a simple and efficient way.
That means globally diversified portfolios tailored to your risk profile and goals, an advice centre to give you investment advice on an ongoing basis, and a regular rebalancing of your portfolio to keep your investments on track with your goals.
However, Moneyfarm is not very hands-on. If you’re looking for DIY, you might be better off going with other platforms that offer more control.
Moneyfarm’s top features
Moneyfarm’s biggest feature is its custom portfolios.
Designed to match up with your risk profile and long-term investment goals, the portfolios are built using a combination of different asset classes, regions and currencies and delivered via a broad handpicked mix of cost-efficient exchange traded funds (ETFs).
This ensures automatic diversification, arguably lowering the risk of your investments underperforming or losing money.
Also, unlike many other investing platforms, Moneyfarm is authorised and regulated by the Financial Conduct Authority (FCA) as an investment adviser. So you can rest assured that the information and recommendations you get from them are suitable for your specific needs and truly match your goals and profile.
Another top feature is its simple and clear fees structure. They use a tiered approach, which means that the more you invest, the lower the fees you’ll pay.
What’s more, there are no withdrawal or exit fees, which is excellent for people who want flexibility with their investments.
How do the fees work?
Moneyfarm charges a single management fee on your whole account. The first part of this fee is the platform fee, i.e. the fee charged for providing the service.
The platform fee charged depends on the amount you invest. It starts at 0.75% on investments up to £10,000 and then drops to 0.60% on any amount between £10,000 and £50,000. Balances between £50,000 and £100,000 attract a fee of 0.50% while anything above £100,000 is charged 0.35%.
There are also two other fees. One is the fund fee, which is the fee charged by providers of the ETFs. This is usually a flat fee of 0.20%.
The other one is the market spread fee, which can be anything up to 0.09%.
If you have different portfolios, Moneyfarm will work out the fee across your entire account rather than individual portfolios. This means that you’ll benefit from lower fees as you increase the total value of your Moneyfarm account.
The fee is debited every month from your account and will be illustrated in your monthly account statement.
Once your account is funded and you’ve chosen your portfolio, it will be monitored and managed for you by a team of experts. Strategic adjustments and rebalancing will be done where necessary to manage volatility and risk.
The online platform and mobile app are both simple and user-friendly. You are able to review your portfolio, evaluate performance, analyse asset allocation and make withdrawals from anywhere and at any time.
What are the risks?
There are no guarantees that your portfolio will grow, and so there’s a chance that you might lose money – especially if you chose a riskier portfolio.
Moneyfarm’s fees are not the cheapest when compared with some of its competitors, not by a long shot. But you get a wide range of premium services including exposure to global investment products, free trades, an extensive library of investment information and resources and regular rebalancing of your portfolio.
You also don’t have much control with Moneyfarm as portfolios are prebuilt for you and you can’t customise or choose their exact makeup yourself. This might be frowned upon by investors who want a more hands-on approach.
But for those with little investing experience or those who simply don’t have time to keep tinkering with their portfolios, Moneyfarm could be a great choice.
How accessible is Moneyfarm?
Opening an account and investing on Moneyfarm is as simple as it can be. It’s free and it will take you less than 10 minutes to get set up. As soon as you have funded the account and selected an account type, you can begin investing immediately. Note, however, that you need to put in at least £1,500 in your account to begin investing.
If your goals or anything else changes along the way, your profile can easily be adjusted online, in-app or by talking with your very own dedicated investment consultant. So with Moneyfarm, you can be sure that you’re always investing the right way at all times.
Service and support
Moneyfarm’s customer support can be reached by via phone, chat, email and via social media. Working days are Monday to Thursday 9 a.m. to 7 p.m. and Friday 9 a.m. to 6 p.m.
A comprehensive FAQ section is also available on Moneyfarm’s website.
Is Moneyfarm right for you?
If you are new to the world of investing and are looking for a simple, hassle-free and passive way to invest, with a carefully selected and diversified portfolio to suit your risk profile and goals, Moneyfarm might be a good fit. You get a great service with very little input and effort required on your part.
But if you are more experienced in managing investments and would prefer a more hands-on approach, you might prefer a different route.
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