Moneyfarm and new investor cashback (TCB) - am I being greedy?

SamDude

Last year I consolidated my various employer pensions into a SIPP with Interactive Investor.
It went smoothly, so I am now looking to consolidate the one remaining employer pension too.

Whilst looking on Topcashback, I saw that Moneyfarm is offering some good cashback rates for new customers transferring into a SIPP. I was drawn to their £1,100 cashback for transfers of £50,000+ (which I will be doing).

The downsides - the fees are higher than other platforms at 0.6%, and if you transfer out within 2 years the cashback may be deducted from your balance. Just like the value of investments can go up/down, the TCB cashback is never guaranteed...

Taking into account that the £1100 will be eroded with the higher fees, what is the general thought about Moneyfarm? How do I minimise the chance of the £1100 being wiped out by poor performance? 

Should I just move the pension to II and forget about the cashback?

ColdIron

Without looking at the details of the offer, I would never be swayed by cashback. I would use the best platform for my needs. If that platform also offered cashback all the better but it would not be top of my list

What you invest in is more important than where and even fees

Moneyfarm is a robo-advisor (with 9 portfolios) while II is a full service pension. Chalk and cheese

SamDude

Thanks - I do understand the difference between II and robo-investors, but my query was more about giving £50k of my SIPP a '2 year holiday' with Moneyfarm...

This £50k is not my entire pension/SIPP and I am not going to need it for 15 years.

cloud_dog

The charge will be more than 0.6% for above £50k.  Their charging structure appears to be banded, starting at 0.75% and reducing down in stages with higher amounts.

I haven't had any dealings with them but it would appear you only pay 0.6% on thr money above £50k.

So the charges may be around £650 over two years (have used 0.65% as a benchmark).  I haven't seen any cost caps documented on their site.

SamDude

cloud_dog said:

The charge will be more than 0.6% for above £50k.  Their charging structure appears to be banded, starting at 0.75% and reducing down in stages with higher amounts.

I haven't had any dealings with them but it would appear you only pay 0.6% on thr money above £50k.

So the charges may be around £650 over two years (have used 0.65% as a benchmark).  I haven't seen any cost caps documented on their site.

There is a pricing tool on their website - https://www.moneyfarm.com/uk/pricing
It does say that the fee% is applied to the whole amount, e.g. for £50k it is 0.6% on the whole amount (and not banded).

Having input the numbers, it doesn't look worth it to me.
A £50k managed investment will cost £37.08 per month. Over two years this is close to £900, so the £1100 TCB is eroded to £200 (if it even gets paid).

I'm going to skip this TCB/Moneyfarm offer and consolidate the pension with the others at II. I'm already paying II a flat £13/month so this £50k will cost nothing extra.

cloud_dog

SamDude said:

cloud_dog said:

The charge will be more than 0.6% for above £50k.  Their charging structure appears to be banded, starting at 0.75% and reducing down in stages with higher amounts.

I haven't had any dealings with them but it would appear you only pay 0.6% on thr money above £50k.

So the charges may be around £650 over two years (have used 0.65% as a benchmark).  I haven't seen any cost caps documented on their site.

There is a pricing tool on their website - https://www.moneyfarm.com/uk/pricing
It does say that the fee% is applied to the whole amount, e.g. for £50k it is 0.6% on the whole amount (and not banded).

Thanks for confirming (that was the page I had found), but I would suggest that it is badly worded... from £500..., from £10k..., from £20k..., or worded in such a way as to lead to this confusion.