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.
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.