How to Kickstart Your Investing Career with MoneyFarm

Founded in Italy in 2011, robo-adviser, MoneyFarm, quickly became the market leader in its country of origin, before migrating to the UK in April 2016, where it has since grown into one of the big players this burgeoning field.

MoneyFarm’s key goal is to make investing more accessible for first time investors, and the key way in which it has achieved this is by removing the need for an Independent Financial Adviser (IFA) and creating a streamlined, automated service to make investing simple and transparent.

Upon signing up to MoneyFarm’s robo-advice service, you will be asked to complete a questionnaire in order to determine your appetite for risk as an investor. A series of algorithms will then match your profile to a corresponding portfolio and once you have deposited your money, in a few clicks you will be well on your way to becoming a fully-fledged stock market investor.

Portfolio Allocation

MoneyFarm operates six portfolios which invest solely in Exchange Traded Funds (ETFs) exposed to a range of asset classes across multiple geographical areas and currencies. An ETF is an investment vehicle that tracks markets, such as bonds or commodities, and is listed on the exchange – making them highly liquid.

To date, MoneyFarm’s most conservative option, Portfolio 1, has an average return of 4.1%, while the riskiest option, Portfolio 6, has a current average of 13.6%.

Here are a few reasons MoneyFarm might be the algorithmic trading platform (or robo-adviser…) for you.

A Stock Market Stepping Stone with MoneyFarm

For many, dipping your toes into the stock market pool can be an overwhelming experience. Not to worry, MoneyFarm’s digital investment service is specially designed to make the big leap that much easier.

Through its ETF portfolios and algorithmic trading methods, MoneyFarm allows you to invest in a diverse range of stocks and shares according to just how adventurous you are as an investor. From short-term government bonds to developed markets equities, this robo-Adviser will invest your capital across a variety of asset classes and regional exposures to ensure you investment reaches its full potential.

Also, the personal assistance an IFA can offer is not excluded when choosing robo-advice. MoneyFarm offers this service over the phone or in online chats, saving the hassle of those face-to-face meetings.

Cost-effective Investing

One of the most appealing aspects of robo-advice services like MoneyFarm is how they are able to keep the cost of any additional fees low by cutting out the middle man and streamlining the entire investment process.

By negating the need for lengthy, face-to-face meetings with IFAs and handling your investment on a discretionary basis, MoneyFarm is able to offer fees as low as 0.25%, whereas traditional investing through an IFA will, on average, charge between 2% and 3%.

Indeed, the fees charged by financial advisers have come under increased scrutiny over the years. A report in the Journal of Financial Economics in April estimated 26 per cent of the £911billion worth of funds sold in the UK during 2015 were either closet-trackers or managed passively, with excessive charges meaning investors could be paying £1.8bn in unnecessary costs every year.


For those who like giving their investment the added benefit of a tax-free wrapper, MoneyFarm also offer a Stocks and Shares ISA.

Like others, the MoneyFarm ISA allows for an annual allowance of £15,240 to be invested with the benefit of paying zero tax on your capital and any returns made. You can in invest the entire annual subscription allowance into a MoneyFarm ISA and even transfer any existing funds you may have in other ISAs, such as a cash ISA.

It is also important to remember that as of April next year, the ISA allowance is set to increase to £20,000, allowing for even greater tax-free returns on your investment.

MoneyFarm vs IFA

There are several important factors to take into account when deciding how to best invest your money. However, many of those looking to try their hand at the stock market may be disinclined to do so due to a lack of financial expertise or the prospect of paying high fees to a traditional IFA.

So, investing in robo-advice companies like MoneyFarm could be the way to go? Service fees are a fraction of those charged by IFAs and MoneyFarm will take the hassle out of the investing process, assessing your risk profile through a simple, but robust suitability questionnaire and diversifying your investment accordingly with algorithmic allocation software.

While IFAs do provide a more in-depth assessment of your background and investor profile, this process can be time-consuming and, as mentioned previously, expensive. With MoneyFarm, support is always available over the phone or in online chats with advisers, and you can monitor your investment anytime by logging on to your MoneyFarm account.