Moneyfarm

thebullsback

Be gentle please.
I have £10000 to either save or invest for a period of at least 5years.
I have zero investment knowledge but have been quiet taken by the Moneyfarm blurb and website.
Out of interest only what do you people make of moneyfarm as an investment opportunity for my circumstances or could I do better?
thank you for reading.

dunstonh

I am a little negative towards them but only because of the way some market themselves and the audience they target.

They are generally aimed at the internet generation who nothing about investing and measure quality by the number of likes or truspilot reviews. How the app works is more important to them than the actual investments. Advice by flow chart/points score has a poor record of getting it right. Especially on investment risk assessment.

They are not bad options for small investors (couple of grand) but you would not expect too many £100k investors to be with them.

DennisTenus

dunstonh wrote: »

They are not bad options for small investors (couple of grand) but you would expect too many £100k investors to be with them.

Did you mean not too many £100K investors to be with them?

dunstonh

DennisTenus wrote: »

Did you mean not too many £100K investors to be with them?

Thank you. You are right and I have edited. Some typos change the whole meaning!

BananaRepublic

It struck me as more clever marketing and hard sell than serious investing. Yes you can do better. Get yourself a good book on DIY investing. Then decide between DIY and an IFA although an IFA might turn her nose up at such a small sum.

DennisTenus

dunstonh wrote: »

Thank you. You are right and I have edited. Some typos change the whole meaning!

Yeah, so the big question is who do people with 100K+ use? IWeb?

I want to because they are so cheap but worry about the 50K protection.

ValiantSon

thebullsback wrote: »

Be gentle please.
I have £10000 to either save or invest for a period of at least 5years.
I have zero investment knowledge but have been quiet taken by the Moneyfarm blurb and website.
Out of interest only what do you people make of moneyfarm as an investment opportunity for my circumstances or could I do better?
thank you for reading.

Just had a quick look at them. The fees seem rather expensive to me and the comparisons they make to show how cheap they are are very dubious. They suggest, for example, that an investment of £20,000 would only cost you £16.67 per month, whereas a rival would charge you £42.67 per month. I don't know who that rival is, but there are way cheaper options available. On which point, I object to their use of £16.67 per month because it is designed to make you think, "Oh, that's quite cheap" whereas £200.04 per year would sound a lot less so, but it is the same figure (and if anyone is paying 2.56% per annum, i.e. £512.04 with their notional rival then they want their heads read).

For comparison, you could buy into a passive multi asset tracker (giving a diversified portfolio) and pay platform fees for less than 0.5%, whereas Moneyfarm want to charge you just over 1% for their "proprietary" investments. With £10,000 to invest, Moneyfarm would charge you £100.02 for no real insight into what you are actually investing in. For a cheaper (and more open and honest) option you could invest £10,000 with Vanguard in one of their LifeStrategy funds for £35 for the year (0.15% platform fee plus 0.22% fund charge, i.e. 0.37%). In other words you would pay 65% less. Other platforms would also charge less than Moneyfarm. I suggest Vanguard as a simple and cost-effective comparison.

ValiantSon

DennisTenus wrote: »

Yeah, so the big question is who do people with 100K+ use? IWeb?

I want to because they are so cheap but worry about the 50K protection.

The £50,000 protection is probably only really of any use in situations where there is corporate fraud/negligence. It is a very small, albeit real, risk. In my view it isn't a big issue to worry about and their are many times greater risks to your money simply by dint of investing it in the markets. If the platform went bust then you would still own your stocks, funds, etc.

I haven't used them, but iWeb seem to offer a good pricing structure for larger sums.

ivormonee

I thought Moneyfarm don't charge any fees for up to £10k invested. Has that now changed? Also, on looking at MF, I can't find any performance data nor can I see what funds they actually invest in, so would have no clue what would be in the portfolio that they would provide for me. The lack of transparency and no information on track record would put me off.

I agree that Vanguard would seem like a far better option both on transparency, ability to benchmark and lower charges.

Oldbiggles

If you are willing to invest for 5 years, then why not buy into Company shares. You would need to buy the shares through a stockbroker and ask for the certificates to be sent to you. This way you only pay a one off fee and sit back and watch the dividends coming in, whereas if you buy into a fund you continue to pay fees and annual charges to financial advisers which can be quite severe. You don’t need to be too speculative, buy shares listed in the FTSE 100, say £2000 per share. As long as you hold the certificates you will continue to receive the dividends. Put the received dividends into a savings account until it grows into a sum that you can reinvest into another share. You never know, you might get a taste for investing this way. It happened to me and I made a healthy profit. Remember, financial advisers are in it to make money, your interests are secondary.

eskbanker

ivormonee wrote: »

I thought Moneyfarm don't charge any fees for up to £10k invested. Has that now changed?

https://www.moneyfarm.com/uk/pricing/ says 0.7% per year on the invested amount for the first £20K, but it does look like this is a change from archived copies of that page, which do indeed refer to no fees for the first £10K, as do previous threads on here....