Robo-advisor Moneyfarm introduces charges for all wealth brackets

Oct 19th, 2017 | By | Category: ETF and Index News

Automated wealth management company Moneyfarm has announced it is to introduce charges to all investors, abandoning its previous scheme where portfolios below £10,000 or above £1 million in invested assets were exempt from fees. The firm said it has initiated the new pricing structure to bring the firm in line with other robo-advisers.

Robo-advisor Moneyfarm introduces charges for all wealth brackets

All Moneyfarm clients will now incur a management fee, regardless of amount invested.

Founded in Italy in 2011, Moneyfarm expanded its operations to the UK in February 2016. It currently offers six portfolios, constructed exclusively using ETFs, each catering to a different level of risk tolerance. Investors are assigned to a risk bucket based on a proprietary questionnaire, with each portfolio containing a diversified mix of asset classes, geographies and currencies.

The firm’s new pricing structure involves four wealth bands: those investing under £20,000 will be charged 0.70%, those investing between £20,000 and £100,000 will be charged 0.60%, those investing £100,000 to £500,000 will be charged 0.50%, and those investing over £500,000 will be charged 0.40%. Existing customers will not be affected until their portfolios rise above £12,000. All investors will need to continue paying the fees applicable to the underlying ETFs, which are expected to average 0.30%.

Fees on rival robo-advisor Nutmeg’s fixed allocation portfolios are broken down into just two categories: 0.45% is charged on amounts up to £100,000, and charges are dropped to 0.25% above this point.

Wealthify charges 0.70% up to £15,000, 0.60% between £15,000 and £50,000, and 0.50% for portfolios above £50,000.

Moneyfarm’s underlying fund costs are higher than Nutmeg and Wealthify, which estimate underlying ETF costs at 0.17% and 0.19% respectively.

Moneyfarm’s portfolios are available to investors in a General Investment account or an ISA, and will soon be available in SIPP format.

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