Any experience of 'Moola' robo-investment?

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LHZ
LHZ Posts: 54 Forumite
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in Savings & investments
Hello all. I'm tempted to take up the latest offer from Moola robo-investment platform via MSE (£125 cashback after 12 months with minimum £1200 investment over the year). Does anyone have any experience of this? Seems like a reasonable offer. Also, is there any reason for me not to put this in a S&S ISA? I'm completely new to this and whilst I've been tempted to jump in to shares I've always held off. This Moola app seems an easy way in.

Many thanks!
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  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    If you are only planning to put a relatively low amount in, a few £k, this would seem as good as any, you can always transfer it next year.
    Presumably you'll be adding £100/month or a bit more? £110 if you wanted to "pre invest" the cashback?
  • cloud_dog
    cloud_dog Posts: 6,044 Forumite
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    edited 11 April 2018 at 10:32AM
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    Love their comparison of Moola charges against 'typical industry rates'.... I wonder which decade they are living in?

    Why you would go with Moola rather than, for example, Vanguard LS, I haven't a clue.

    EDIT: Lost sight of the introductory offer.....hmmm. You could do it but it doesn't make sense to leave it with them (cost wise).
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • LHZ
    LHZ Posts: 54 Forumite
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    cloud_dog wrote: »
    Love their comparison of

    Why you would go with Moola rather than, for example, Vanguard LS, I haven't a clue.

    EDIT: Lost sight of the introductory offer.....hmmm. You could do it but it doesn't make sense to leave it with them (cost wise).

    I haven't a clue either hence me asking the question. Should I set up £100 per month with Vanguard instead then? If so, why? Many thanks!
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    LHZ wrote: »
    I haven't a clue either hence me asking the question. Should I set up £100 per month with Vanguard instead then? If so, why? Many thanks!

    No. The reason is the cashback offer, the equivalent of a guaranteed 10% return if you put the minimum in.

    So, as long as you are only putting in a small amount, its a reasonable way to get started. Next year you will likely be better off moving it, maybe to vanguard if you like their funds, although, the numbers are so low that in actual real terms it likely doesn't matter much.

    A reason not to do it would be, you are putting in your full £20k allowance, where the £125 cashback is noise.
  • cloud_dog
    cloud_dog Posts: 6,044 Forumite
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    LHZ wrote: »
    I haven't a clue either hence me asking the question. Should I set up £100 per month with Vanguard instead then? If so, why? Many thanks!
    It depends what you want?

    I've never been driven by 'introductory offers' (how un-MSE I am I) but, if it suits your requirements then go ahead.

    From a simple cost perspective:
    * Moola charge 0.75% plus the underlying fund charge
    * Vanguard charge 0.15% plus the underlying fund charge

    You can see the difference.

    Having said that, on small amounts we are not talking big charges; on £1200 it is £1.80 compared with £9 Moola. Also, I'm not advocating Vanguard, simply using them as an example.

    In true MSE fashion , it would make sense to open the Moola account, take up the £125 introductory offer, and then transfer it somewhere else after 12 months. Moola do not make a charge for transferring out.
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • Zorillo
    Zorillo Posts: 774 Forumite
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    Orbis are offering £100 introductory bonus on a £100 contribution, I'd look there rather than at this.
  • LHZ
    LHZ Posts: 54 Forumite
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    Zorillo wrote: »
    Orbis are offering £100 introductory bonus on a £100 contribution, I'd look there rather than at this.
    May I ask why? What is the advantage? I am total noob so please bare with me.
  • Cash-Strapped.T32
    Cash-Strapped.T32 Posts: 562 Forumite
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    edited 11 April 2018 at 11:11AM
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    LHZ wrote: »
    May I ask why? What is the advantage? I am total noob so please bare with me.

    Presumably because a free £100 in return for committing £100 of your own for a year, is a better deal than a free £125, in return for committing £1200 of your own for that same year - no?
  • dunstonh
    dunstonh Posts: 116,376 Forumite
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    The Moola site looks very familiar to another robo-advice offering. Cant remember what one but the words and layout seem familiar.

    Has similar failings too....
    For the traditional fee we used typical industry rates of 1.5 - 3.5% per year.

    !!!!!!!!!! They are nowhere near the industry typical rates. This morning I completed a case with 0.33% and just starting one that is 1.3% (both all in for ongoing). That is full advice. DIY investors typically pay around 0.5-0.7% Some of these robo-advice sites really misrepresent the charges that are present elsewhere.
    Everyone pays one flat, yearly fee of 0.75%

    Ok, so everyone pays 0.75%. Thats in nice big text and clear to see. However, its not right. Expand the fee explanation (which is initially hidden) and it says:
    Note, there is also an inbuilt fee within the Exchange Traded Funds (ETFs)
    All ETFs have an embedded fee which any investor who holds the ETF incurs. This fee is built into the ETF - the return is net of this fee. Thus you don't pay this fee to Moola, and it won't show in your list of transactions. But it is a cost incurred whenever anyone invests via ETFs, so you should be aware of it.

    The weighted average cost of the ETF fee in our standard portfolio is between 0.15% to 0.16% per year. For our ethical portfolios the weighted average cost of the ETF fee is between 0.20% - 0.31%. The average of these two ranges is 0.23% so will use this in the example below:


    So, its not 0.75%. Its now at 0.9%.

    Why do these companies try and hide their charges and misrepresent others.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • LHZ
    LHZ Posts: 54 Forumite
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    Thanks for the replies all. I've gone ahead and set up a Moola portfolio with £100 initial investment and £100 dd per month. It's hardly a life changing fortune but this at least gets me looking at the S&S market and the £125 bonus paid after 12 months means this money is likely to yield a better return than sitting in a current account which is where it would be normally.
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