Nutmeg/Moneyfarm vs DIY

MEL1981

Hello. 

I wanted to sense check if I'm a lone wolf having all my investments split between two robo advisors. I have approx £200k between both of which around £150k is in their managed ISAs (ETFs). 

I really like their service, but have a niggling feeling I'm getting charged through the nose for fees etc. I've probably got another 10 years before I need to withdraw and I am actively contributing each year. 

Is anyone else using similar robo advisors for their main investments? Has anyone switched to more DIY options?

Thanks
Mel

friolento

I haven’t tried Moneyfarm but did a trial with Nutmeg when they had a sign-up offer. I did not stay with Nutmeg as their investment options are limited, and they were dealing just once a week. I will stick with my DIY, using global index funds and Vanguard LifeStrategy in ISAs and a SIPP

eskbanker

MEL1981 said:

I really like their service, but have a niggling feeling I'm getting charged through the nose for fees etc.

Do you know what the fees are, for these companies and the alternatives?  Not saying that fees should be the main driver of platform choice but always worth establishing the facts....

artyboy

Nutmeg's fully managed top risk level option has consistently underperformed HMWO for the last 10 years, before you even factor the fees in. 

They can be useful in the short term for extracting a bit of cashback, but not somewhere I'd want to be longer term...

MEL1981

eskbanker said:

MEL1981 said:

I really like their service, but have a niggling feeling I'm getting charged through the nose for fees etc.

Do you know what the fees are, for these companies and the alternatives?  Not saying that fees should be the main driver of platform choice but always worth establishing the facts....

The fees for nutmeg are 0.75% up to 100k then 0.35% beyond. 
The fees for Moneyfarm are 0.45% to 50k, 0.2% to 100k then 0.1% beyond 100k.

(I think...)

Fund feeds are separate!

masonic

Hard to justify that level of fees when you can get virtually the same portfolio from a multi-asset fund and hold it on a platform where the fees are negligible.

Eyeful

I do not know what ETF's you hold. 
Never saw the point of Nutmeg or Money Farm.

S&S ISA  at HL
VWRL (FTSE All World Index ETF) the OCF is 0.22%
HL ISA = 0.45% (Capped at Max £45)

artyboy

HMWO has an OCF of 0.15%, and has outperformed VWRL over 10 years.

And there are even cheaper platforms out there, although I know HL is quite popular because of the functionality it offers...

Albermarle

Eyeful said:

I do not know what ETF's you hold. 
Never saw the point of Nutmeg or Money Farm.

S&S ISA  at HL
VWRL (FTSE All World Index ETF) the OCF is 0.22%
HL ISA = 0.45% (Capped at Max £45)

If you are knowledgeable enough about investing to know what an ETF is, then most likely no point in using robo advisors.
However if you asked the vast majority of the public what an ETF was, you would just get a blank look.
So if a robo advisor gets inexperienced investors started out on the right track, rather than putting 100% into Tesla or whoever, then they are offering a useful service.
Of course in the long term the higher fees etc will be a drag, but less of an issue at the start.

cockerWalker

I'd be inclined to pick a fund of indexes like one of the vanguard life strategy or black rock consensus range instead.

You're paying for someone else to manage your money for you, whether that's robo or not. You could spend more for a financial advisor, keep as you are (maybe with some consolidation if it saves some money), or save money by doing it yourself. What's it worth to you to have someone else do it?

For me, i have an aj bell isa of comparable value with fees of £3.50 per month, due to their cap on charges for etfs. There are even cheaper examples if every pound is the biggest concern.