This is my independent Moneyfarm review. Moneyarm is a digital wealth management company which has been actively managing investments on their platform for UK-based investors since their launch in 2016. Moneyfarm is one of a number of different automated investment platforms to launch in the UK over the last few years.
I’ve been trading and investing with my own money for over 10 years, and it’s my mission to review every investing app the UK market has to offer. I’ve used Moneyfarm since 2017 to invest my own money. This review of Moneyfarm includes a look at how Moneyfarm works, what it’s like using the app and the all important costs and returns. As a Chartered Accountant I know the importance of balancing costs against returns!
Overall, Moneyfarm is a great solution for anyone who wishes to be exposed to the market through an actively managed portfolio but simply does not have the time to invest money and monitor the financial markets themselves. The app is great to use and Moneyfarm are frequently adding more features and investment options. There are however cheaper options if you’re investing less than £10,000.
Read on for our full Moneyfarm review, or use the links below to jump to a particular section. I hope that this review will provide you with the information you need in order to decide whether Moneyfarm is right for you.
- Moneyfarm Pros & Cons
- What is Moneyfarm?
- How Does Moneyfarm Work?
- What Products Does Moneyfarm Offer?
- How Does Moneyfarm Invest?
- Ethical Investing With Moneyfarm
- Moneyfarm’s Performance
- Moneyfarm Alternatives
- What Are Moneyfarm’s Fees?
- How To Open An Account With Moneyfarm
- Using Moneyfarm
- Who Is Moneyfarm For?
- Is Moneyfarm Safe To Use?
- Moneyfarm Customer Service
- Moneyfarm Customer Reviews
- Moneyfarm Review – Final Verdict
Moneyfarm Pros & Cons
Human Support – Moneyfarm users are able to schedule a meeting with one of Moneyfarm’s investment consultants directly through the app. These advisors will be able to guide you through your investment journey as well as answer any questions you may have. It’s important to note that the investment consultant provides guidance rather than advice. To give investment advice would defeat the purpose of the robo-advisor, which actually falls under regulated advice, therefore affording greater protection.
Low Fees Above £10k – When compared to the wider investment industry and other companies offering similar services such as Nutmeg and Wealthify, Moneyfarm has some of the lowest fees if you’re investing £10,000 or more.
Range of Products – Moneyfarm offers access to tax-advantaged accounts such as their Stocks & Shares ISA, Junior ISA and Lifetime ISA. They also offer a Self-Invested Personal Pensions (SIPP) account. Each of their offerings now also includes an ESG (Environment, Social and Governance) focus if you’re interested. This means Moneyfarm has one of the widest offerings of the UK’s robo investing platforms.
Limited Investment Opportunities – Moneyfarm does not offer the ability to customise your investment portfolio. This may steer more sophisticated investors away from the platform as these investors typically prefer to build their own portfolios. This is not such a bad thing if you don’t want to build your own portfolio.
Actively Managed – While many investors prefer investing in actively managed portfolios, historical data has shown us that over time, actively managed investment portfolios typically tend to underperform when compared against passive index fund investing (more on this below).
Expensive when investing under £10k – Although much cheaper than other investment companies offering similar services and features, Moneyfarm is more expensive than Wealthify if you invest under £10,000 with them.
What is Moneyfarm?
Moneyfarm is currently one of the largest digital wealth management companies in Europe with over 80,000 users and over £2 billion in assets under management. Having successfully managed people’s money in Italy since 2011, Moneyfarm launched in the United Kingdom in 2016 in response to the growing demand for Robo-advisors and digital wealth management platforms.
Founded by Paolo Galvanni and Giovanni Dapra back in 2011, Moneyfarm’s largest equity holders are currently Allianz Asset Management, Cabot Square Capital, and United Ventures.
In December 2021, Moneyfarm acquired Wealthsimple’s UK customers and assets under management (AUM) of £272m. This comes during a period of consolidation in the robo-investing market. In June 2021, JP Morgan acquired Nutmeg and in June 2020 Aviva acquired Wealthify as the traditional players in the investment management industry want access to younger, digital-focused investors.
Moneyfarm’s mission is to simplify investing to afford more individuals greater access to the financial markets. For many readers, learning to successfully navigate the financial markets is a difficult task given the time and effort that would need to be invested. The rewards can however be solid. The reality for many though is that they do not end up investing in the financial markets themselves because they simply do not have the time to do the appropriate level of research to determine which investments may perform best. Or worse, they do a small amount of research and hope for the best, often losing money.
Moneyfarm attempts to solve this problem by allowing people to invest in its expertly chosen and ready-made funds, then actively manages these funds in response to the constantly changing market conditions. Moneyfarm’s funds are managed by experienced fund managers.
How Does Moneyfarm Work?
Moneyfarm attempts to understand the goals and psychology of the individual so that they can recommend an appropriate investment portfolio for them. To achieve this, individuals are required to sit and answer a series of questions designed to gather the necessary information.
After you have created an account and answered Moneyfarm’s investor questionnaire, an investment consultant will be able to guide you to the appropriate investment for you. Naturally, as we grow and change so do our goals and investing psychology. Moneyfarm recognises this reality and allows you to change your portfolio to match your circumstances at any time.
Once you have chosen an account type, Moneyfarm will invest your money into your chosen portfolio. At the time of writing, Moneyfarm has 7 different well-diversified global portfolios to choose from that are designed to cater to the goals and risk appetites of every individual.
After your money is invested, Moneyfarm gets to work. Moneyfarm’s investment experts will continuously monitor the investment landscape and respond to any changes that may impact your investment portfolio. Its team of experts will regularly analyse the financial markets and actively manage your portfolio so you don’t have to.
When you sign up and complete the questionnaire, you’ll be placed into one of 7 risk levels. The lowest risk is 1 and the highest is 7. When I signed up, I was put into the ‘Pioneer’ category, which is risk level 6:
You’ll see a neat summary of the weighting of your portfolio by asset class. This may change over time and you can check this breakdown at any time in the Moneyfarm app.
What Products Does Moneyfarm Offer?
Let’s take a look at the types of accounts that Moneyfarm offers. Each one comes with an ESG option, which we’ll cover in more detail later in this Moneyfarm review.
Stocks & Shares ISA
The ISA account allows individuals to invest up to £20,000 per year on a tax-free basis. Any returns gained through this account will be free from capital gains tax making it the first choice account for most individuals who are just starting to invest. After all, why pay taxes if you don’t have to?
There are no limits on when money can be withdrawn from this account or what that money can then be used for so investors can relax in the knowledge that their money is readily available should the need for it ever arise.
You can transfer an existing ISA that you hold with another provider into your Moneyfarm account. If you choose to do this, Moneyfarm will handle the process for you.
The Stocks & Shares ISA is the main Moneyfarm offering. Moneyfarm builds a personalised investment portfolio for you based on your answers to the questionnaire on sign-up. Moneyfarm also allows you to invest in more than one of its 7 portfolios in the same ISA.
General Investment Account (GIA)
Moneyfarm’s General Investment Account (GIA) is its standard investing account. Unlike the ISA account, the GIA carries no tax benefits and any returns made by investing through this account will potentially be subject to capital gains taxes.
However, unlike the ISA account, there are no limitations on how much you can invest into a GIA. To make the most of your tax-free allowance, you should consider making full use of your ISA before beginning to invest with the Moneyfarm GIA account.
Otherwise, Moneyfarm’s GIA operates in the same way as the Stocks & Shares ISA.
Moneyfarm Pension (SIPP)
Moneyfarm also offers its clients access to their Self-Invested Personal Pension (SIPP) account. The SIPP account provides clients with up to £40,000 worth of tax relief for any contributions made to the account. This could be a good option for many, but you should always consider seeking professionnal advice when it comes to long term planning and tax planning.
It should be noted that money can not be withdrawn from your SIPP until you reach the age of 55 and so clients should be aware of this fact prior to investing any money into their SIPP. That said, once you reach the age of 55 you will be able to withdraw 25% of your pension on a tax-free basis.
It’s entirely possible to transfer your existing pensions to Moneyfarm free of charge. The transfer requires that you provide Moneyfarm with your current provider’s name, pension account number, and account value in order to process the transfer. This is a useful feature for anyone who has existing or multiple pensions with different providers. Moneyfarm can also be used for employer contributions into your pension, including from a user’s limited company.
If you purely want to consolidate your pensions into a single account, Moneyfarm is a good option but not the best. In my view PenionBee’s pension transfer service is currently the best for this. However you don’t get the other investment options with PensionBee that you do with Moneyfarm. And if you would like to see, for example, your Stocks & Shares ISA, Junior ISA and Pension all in one place, Moneyfarm is currently one of the best options to do so.
If you open, or transfer in, a pension to Moneyfarm then your money will be invested using a similar questionnaire to that of the other investment accounts. It will take into account your risk appetite, savings goals, the amount you have to invest and your planned retirement date.
Moneyfarm Junior ISA
Moneyfarm recently (February 2022) launched a Junior ISA offering. A Junior ISA allows you to invest in a tax-efficient way for a child, with an annual limit of £9,000 per tax year. This means up to £9,000 a year of savings are free of capital gains and income tax.
The child is the beneficiary of the account, and only they can access the account once they turn 18. At this point, the account reverts to a standard Stocks & Shares ISA. Moneyfarm allows you to transfer in an existing Junior ISA too.
A Moneyfarm Junior ISA can be opened with as little as £500 and a regular monthly commitment of just £10. Your child must be under 18 and living in the UK.
How Does Moneyfarm Invest?
Money farm will invest your money in one of its ready-made portfolios that consists of globally diversified ETFs. These portfolios vary in risk and holdings to reflect the varying goals and psychologies of those individuals who invest in them.
How Does Moneyfarm Manage Its Portfolios?
Unlike many of the competing investment platforms, Moneyfarm makes formal recommendations to its customers in relation to which portfolio they should invest in. As such, Moneyfarm regularly reviews and monitors your portfolio in an effort to assess whether the portfolio is still appropriate for you or whether you would benefit from a change. Since Moneyfarm is regulated by the UK’s Financial Conduct Authority, it must adhere to strict guidelines when making these recommendations.
Similarly, Moneyfarm continuously monitors each portfolio every three months and rebalances them wherever necessary to ensure that the portfolios maintain their desired level of risk. If necessary, Moneyfarm will cut down on specific positions or add to the various assets within the portfolio to maintain the desired levels of allocation for each investment within the portfolio.
Whenever Moneyfarm does this, you get an email from them explaining the changes they have made and why. You can take a look in the app at the trades that Moneyfarm’s investment managers have made on your account.
Overall, Moneyfarm’s investment strategy and portfolio management principles give it a real chance of outperforming the market over the long term. This makes for a refreshing change from the many Robo-advising investment platforms that purely attempt to compete with each other on price as opposed to competing based on the performance of their investment returns.
Ethical Investing With Moneyfarm
Moneyfarm recognises the importance of investing ethically and the need to produce socially responsible investment options for its customers. In line with this realisation, it produced a total of 7 Socially Responsible Investment (SRI) portfolios for customers to choose from.
These portfolios are designed and managed in much the same way as Moneyfarm’s traditional portfolios. They differ in that these portfolios select companies that prioritise mitigating environmental risks and have a positive impact on the world. By definition, companies who burn fossil fuels, sell arms, or otherwise engage in behaviour that damages the environment are automatically excluded from these portfolios.
Moneyfarm’s ethical investing options are relatively new at the time of writing and are somewhat limited in their options. If ethical investing is central to how you want to invest, then you should consider Circa5000 instead. They’re a specialist ESG investment management platform and have a wider range of ESG-friendly portfolio options than Moneyfarm.
Moneyfarm Ethical Portfolio Fees
Moneyfarm does not charge more in respect of its management fees for customers who opt to invest in one of its ethical portfolios. However, the fund cost associated with these portfolios is slightly more expensive at 0.21% when compared to standard portfolios that operate with a fund fee of 0.20%.
While the Moneyfarm ethical portfolio fees are modestly more expensive, when compared to the ethical portfolio fees charged by competitors Nutmeg and Wealthify, Moneyfarm still remains a highly competitive option.
Moneyfarm Ethical Asset Allocation – Medium Risk (Portfolio 4)
Below you will find a table detailing a breakdown of how a medium-risk SRI portfolio is invested.
|Asset||Portfolio 4 (Over £50,000 invested)|
|Short-term Government Bonds||7%|
|Developed Markets Government Bonds||0%|
|Investment Grade Corporate Bonds||26%|
|Inflation Linked Bonds||5%|
|High-Yield & Emerging Markets Bonds||7%|
|Developed Markets Equity||46%|
|Emerging Markets Equity||7%|
|Commodities & Property||0%|
As you can see in the performance data displayed below, Moneyfarm’s medium risk portfolio (Portfolio 4 detailed above) returned 42.10% between January 2016 and August 2021.
While this is by no means a poor rate of return, It is important to analyse this data in the context of wider market returns. To that end, let’s take a look at what the S&P 500 returned during this same period.
The graph above details the returns yielded by the S&P 500 from January 8th, 2016 to August 6th, 2021. As you can see, during this period the S&P 500 yielded a return of 130.82%, over triple the return provided by Moneyfarm’s portfolio 4. As a result, while Moneyfarm’s portfolio performance cannot be said to be poor, they have dramatically underperformed when compared to passive index fund investing.
Even Moneyfarm’s highest risk portfolio, Portfolio 7, returned 80.7% over the same period. Historically, it is hard to find a higher returning form of hands-off investing than passive index fund investing.
That said, every prudent investor will tell you that past performance is not indicative of future results. It is likely that the investment analysts at Moneyfarm are well aware of their performance record and working to improve the performance of their portfolios in the future. It is our hope that with time, Moneyfarm will optimise its investment portfolios and be able to steadily increase its returns well into the future.
It is a rare thing for a business to exist in a vacuum with no other competition. As you might imagine, Moneyfarm is not one of these businesses and there are a number of alternative robo-investors out there that many investors may prefer. Next in this Moneyfarm review, let’s take a look at Moneyfarm’s top competitors in the UK.
Nutmeg is an online investment management service. They offer nearly identical account types as the ones available through Wealthify (more on Moneyfarm’s below) and much like the other companies on this list, Nutmeg attempts to simplify investing for the average person. They offer a number of ready-made globally diversified portfolios designed to cater to the various goals and risk appetites of every investor.
Nutmeg’s fee structure is slightly more expensive than Moneyfarm’s at the time of writing.
Wealthify is another “Robo-advisor” investment platform that seeks to simplify and automate investing. Founded in 2016, these new investment options have become especially popular among younger investors who enjoy being able to effortlessly invest their savings in predetermined investment vehicles. Much like Nutmeg and Moneyfarm, they offer identical account types as well as their own ready-made portfolios for investors to invest in.
Wealthify is cheaper than Moneyfarm if you’re investing under £10,000. Otherwise it’s slightly more expensive.
Check out my independent Wealthify review for more about Wealthify.
Moneybox presents itself as the simplest way to both save and invest your money. The app allows you to link your bank account and save money from every transaction you make. The round-up feature allows you to round up to the nearest £1 and save the difference on the app to be invested.
Moneybox should be considered if you would like to improve and automate your savings each month. You can then invest your savings through Moneybox, however its investment options are limited when compared to Moneyfarm.
What are Moneyfarm’s Fees?
Money farm charges its clients two different types of fees; management and fund fees. The management fees are the fees charged for the services that Moneyfarm provides, namely their consulting and portfolio management services. These fees decrease as the amount invested increases. Below you will find a breakdown of Moneyfarm’s management fees.
The fund fees are not directly charged by Moneyfarm but rather the fees incurred as a result of the ETFs that they have chosen to invest in. Naturally, the fund fees will fluctuate depending on the specific ETFs that Moneyfarm has invested in as well as the specific fund that each individual investor selects. Standard funds attract a fund fee of 0.20% while ethical fund fees sit at 0.21%.
|£0 – £10,000||0.75%|
|£ 10,001 – £20,000||0.70%|
|£ 20,001 – £50,000||0.65%|
|£50,001 – £100,000||0.60%|
|£101,000 – £250,000||0.45%|
In April 2022, Moneyfarm updated its pricing so that the fee applied to your balance based on the bands above will apply to your entire balance. Previously, if you had a balance of £20,000 for example, you would be charged 0.75% on the first £10,000 and 0.60% on the next £10,000. Now, you will be charged 0.60% on the entire £20,000, reducing your total fees payable.
Here’s a comparison of the fees charged by Wealthify vs Moneyfarm vs Nutmeg below:
|Invested amount||Wealthify portfolio fee||Moneyfarm portfolio fee||Nutmeg managed portfolio fee|
|£0 – 10,000||0.60%||0.75%||0.75%|
|£10,001 – £20,000||0.60%||0.70%||0.75%|
|£20,001 – £50,000||0.60%||0.65%||0.75%|
Key Takeaways On Costs vs Moneyfarm’s Rivals:
For under £50,000 of investment, Wealthify’s portfolio fees are cheaper than Moneyfarm.
Above £50,000, Moneyfarm is cheaper than both Wealthify and Nutmeg.
How To Open An Account With Moneyfarm
Opening an account with Moneyfarm begins by downloading their app onto your smartphone.
Once you do so, you’ll see the below screens:
Once you have downloaded the application, you can start setting up your account with Moneyfarm. To begin, Moneyfarm will ask you a series of questions in order to gauge your investor profile. As you can see below, these questions will range from your income and net worth to your attitude and investing experience.
It is vital that you answer these questions honestly and refrain from embellishing your experience or attitudes as Moneyfarm will use this information in order to determine which portfolio is best for you. Once you have completed these questionnaires, Moneyfarm will make a formal recommendation as shown below.
Now that you have received a formal recommendation from Moneyfarm as to which portfolio is best for you, you will be able to verify your identity by supplying Moneyfarm with a copy of your passport/driving licence and start depositing money to be invested.
Research & Tools
Since Moneyfarm allows its customers to adopt a “set it and forget it” approach to their investments, they do not provide the usual amount of research services and tools that might be found on other investment platforms. Hargreaves Lansdown is, in my opinion, the leader in this regard.
Although its research services are nowhere near as comprehensive as other platforms, Moneyfarm does still provide a wealth of educational content through its blog where new investors can learn and grow their investing knowledge. If you agree to be on their email list, you’ll get regular updates on the views of Moneyfarm’s investment managers, including interviews with them. For a casual investor who doesn’t have the time to track their investments, this is probably quite a useful update.
Similarly, Moneyfarm also provides useful tools such as its pension calculator that can help investors determine exactly how much they should be saving towards their retirements each month. These sorts of tools are especially useful when one considers that many young people often have limited understanding of how much they should save to be able to enjoy a fruitful retirement in their later lives.
Ease of Use
Designed for investors with little to no investment knowledge, Moneyfarm ensures that navigating through their platform is as intuitive as possible. Even the most inexperienced of investors should find Moneyfarm to be extremely easy to use.
One area that I dislike is the process of setting up or altering regular contributions. Making a regular contribution into your Moneyfarm account by direct debit is not the smoothest process to set up initially.
Then when I wanted to alter my monthly contribution to increase it, I was told I would have to set up an additional direct debit. It would be much easier to simply be able to alter the existing direct debit. Personally I’ve found this to be the main frustration I have with Moneyfarm. It’s worth bearing this in mind if you think you’ll want to occasionally change your level of regular contribution into your investment account.
What’s It Like Using The Moneyfarm App?
This Moneyfarm review wouldn’t be complete without stepping back from reviewing the investment offering and taking a look at just how useful the app itself is.
The user experience of the Moneyfarm app has continuously improved since it was first launched in 2016. The app now enjoys a number of features that help its users to continue to invest their income and solve any issues they may have.
When I open the app, straightaway I can see a neat summary of my account value and performance over time. You’re able to choose which default investment return you see on your home screen: time-weighted or money-weighted.
Time-weighted strips out the effect of deposits and withdrawals in your account, to show an “underlying” performance return. This is often used to compare the returns of different investment managers.
Money-weighted gives a more accurate return of your personal portfolio, as it takes into account deposits and withdrawals which are up to you to make. For example, if you happened to (or deliberately) made larger deposits when the markets were at a low point, you are likely to get a higher return over time on those deposits. On the other hand, if you made larger deposits when markets were at a high and they subsequently fell, your money will be weighted towards the impact of this fall in the markets.
Both are useful measures and are easily visible within the app.
The app incorporates an in-app chat feature that allows users to communicate with customer support on the go, which is very useful if you have a question. I’ve used this a couple of times in the past and have always received fast responses.
You can also view the Moneyfarm blog where users may find answers to questions they didn’t even know they had! It’s also useful for an on-the-commute read of the latest Moneyfarm investment news and updates.
In my personal opinion, the Moneyfarm app is the best user experience when compared with Wealthify and Nutmeg.
Who is Moneyfarm for?
Moneyfarm’s goal is to make the process of investing as simple as possible. As a result, Moneyfarm is likely to be best suited to those who wish to begin investing but are not sure where to start.
If you have never heard of an ETF or are unsure whether to purchase bonds or stocks, then Moneyfarm is likely to be for you.
If you have a minimum of £500 per month to invest and would like to have professionals manage your money for you, then Moneyfarm is likely to be for you.
If you enjoy managing money on your phone and having a professional investment consultant you can speak with about your investment goals and ideas, then Moneyfarm is likely to be for you.
If you’re looking to take advantage of tax-efficient investment accounts and plan for your retirement in a structured and effective way, then Moneyfarm is likely to be for you.
If however you are confident in making your own investment decisions, or want a wider range of investment options, then Moneyfarm may not be suited for you. Instead, Hargreaves Lansdown is an excellent platform that offers a wider range of research tools and assets to invest in.
Is Moneyfarm Safe to Use?
Moneyfarm is regulated by the Financial Conduct Authority in the United Kingdom and any investments are protected up to £85,000 by the Financial Services Compensation Scheme (FSCS).
Furthermore, client money is held separately to Moneyfarm’s own money. This is an extra regulatory safeguard. Moneyfarm uses Barclays, which has its own FSCS protection, and Saxo Capital Markets UK Ltd to hold client funds. Both are also regulated entitites. Check out Moneyfarm’s FAQs for more details.
Moneyfarm has been operating in the UK since 2016 and has grown to become arguably the UK’s largest robo-advisor, which also give you some comfort.
Moneyfarm Customer Service
Moneyfarm recognises the importance of supporting its customers when they have a problem and offers its customers a number of different ways of contacting them.
Customers are able to contact Moneyfarm directly through the in-app chat function or call them over the phone. Further, customers are able to contact Moneyfarm through their customer service email or even message them on social media platforms like Facebook and Twitter.
Whichever medium you wish to contact Moneyfarm on, their customer support agents are ready to help you.
As I said above, I’ve contacted Moneyfarm’s customer service team on a few occasions and have always received prompt and helpful advice. Even when I didn’t like the answer – such as how to alter a direct debit!
Moneyfarm Customer Reviews
At the time of writing, Moneyfarm holds a strong reputation in terms of its customer reviews. They enjoy an “excellent” rating on Trustpilot drawn from over 600 reviews and an overall rating of 4.6/5. On Apple’s app store they score 4.7/5 star rating.
With so many strong reviews, it would suggest that Moneyfarm’s customers are satisfied with the value that Moneyfarm provides.
Moneyfarm Review – Final Verdict
Deciding how and where to invest your hard-earned money can be a stressful experience. Every day across the United Kingdom, inexperienced investors spend considerable sums of money to secure investment advice from wealth managers and financial planners only to feel more confused and unsure than they did before.
Moneyfarm offers its customers a stress-free, low-cost, and tax-efficient way of investing their money right on their smartphones. Further, its experienced investment consultants are always available to discuss your investments and answer your questions at a fraction of the cost of traditional high street professionals.
The Moneyfarm app is also intuitive and great to use. Overall, Moneyfarm is my favourite of the UK’s robo-advisor platforms.
Although Moneyfarm may not be quite right for the seasoned investor, if you are an inexperienced investor and looking for a convenient way to invest your money, then Moneyfarm could be a great option for you.
To understand more about the differences between investing and trading, check out our guide on the key differences.