Top 50 Frequently Asked Questions about Moneyfarm UK

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Moneyfarm UK Investments Questions

moneyfarm uk

1.    How much do I have to invest with Moneyfarm UK?

As a Roboadvisor, Monefarm UK has identified a market need and created tools to make investing accessible. With Moneyfarms tool, everyone now has access to investing in a simple and understandable way. With as little as £1 , you can start investing in just a matter of hours.

What is the advisable amount to start investing with Moneyfarm Uk? 

  • You can start investing at least £1,500 in the form of a transfer or a new contribution. However, Moneyfarm suggests starting with £2,500 or more.
  • In order to better diversify your portfolio and work with your risk profile, Moneyfarm suggest initially investing a bit more. In this case, setting up a direct debit (preferably of at least £100) is highly advisable, especially when you start investing under £5,000.

2.    Is it possible to add or remove cash from my initial investment with Moneyfarm UK?

Yes. It’s possible to add or remove cash from the initial Moneyfarm Uk investment. Simply make a request at any time from your app or desktop. Your Moneyfarm UK investments are flexible and the process is simple and hassle-free.

Things to remember when adding or removing cash from your Moneyfarm investment

  • Although the process is very simple, it’s worth remembering that you initially set up your financial goals with the initial investment. That means your portfolio is ultimately tied to these financial goals. It is therefore, advisable to consult with Moneyfarm UK before moving a large amount of money.
  • There are no fees for transferring money to or away from Moneyfarm UK. However, don’t forget the tax benefits. Make sure you do transfers properly to avoid losing your tax benefits.

3.    Can you customize the suggested Moneyfarm UK portfolio?

Basically, Moneyfarm Uk builds, manages and rebalances your portfolio on your behalf. This is a very discretionary service.

What does Moneyfarm UK need to know before the investment portfolio can be activated?

  • Your knowledge
  • Your experience
  • Your risk appetite and objectives

Correctly answering these questions allows Moneyfarm UK to match you with the portfolio that best fits your profile.

4.    Can you simply copy the Moneyfarm UK portfolios and just do everything yourself?

To invest successfully, you need knowledge and skill, both of which require time. On top of that, you have to have extra capital to afford trading yourself.

What do you need to understand if you are managing your family’s money?

  • It’s important you understand your investor profile so that you can build a portfolio that’s suitable for you and your goals
  • To make sure your portfolio reflects your tolerance to risk through its asset allocation

5.    Does Moneyfarm UK offer investment advice?

Moneyfarm UK is authorised and regulated by the Financial Conduct Authority as an Investment Advisor and Investment Management Company. There they are required to give restricted financial advice (investment advice) to all its customers.

What type of investment advice does Moneyfarm UK offer?

  • They’ll ask you a series of questions to determine your knowledge, experience, risk appetite and objectives. With this information, they’ll build your investor profile and then match you to a portfolio that’s specifically built to reflect your profile.
  • They also provide a discretionary service, which means they build, manage and rebalance your portfolio on your behalf to ensure that you are on track with your goals.

6.    What is a Moneyfarm model portfolio?

A Moneyfarm model portfolio is a group of funds that are brought together to target an expected return for a specified amount of risk.

How do the Moneyfarm model portfolios work?

  • To ensure that the model portfolios are suitable for each subsequent portfolio, the Moneyfarm asset allocation team optimizes the asset allocation for each of the model portfolios.
  • After you have been matched to a Moneyfarm model portfolio that reflects your investor profile, the Moneyfarm experts help you to manage your investments to make sure they align with your profile.

7.    How is the performance of Moneyfarm portfolio calculated?

The Moneyfarm portfolio performance is calculated in two different ways and you can toggle between them, called “time-weighted” and “money-weighted” performance.

What are “time-weighted” and “money-weighted” Moneyfarm portfolio performances?

  • The Moneyfarm “time-weighted” rate of return is used to compare the returns of investment managers because it strips out the impact of cash flows (both in and out of the portfolio) on performance.
  • The Moneyfarm “money-weighted” rate of return includes individual cash flows within a period to give an accurate reflection of the return you receive as an individual. Theoretically, this gives the investor an accurate picture of the true return they received, accounting for the individual cash flows such as dividends, account top-ups or disinvestments.

8.    Can I use Moneyfarm if I am not a UK resident?

Currently, Moneyfarm accepts customers from the UKItaly or Germany via the different sites they operate.

9.    Can UK citizens invest with Moneyfarm?

US citizens with a UK residency can invest with Moneyfarm.

What should US citizens be aware of before investing with Moneyfarm?

  • Moneyfarm is FATCA (U.S. Foreign Account Tax Compliance Act) compliant and registered FFI (Foreign Financial Institution) with the U.S. Internal Revenue Service. Therefore, as a US Citizen you will be asked to provide a FATCA self-certification form for IRS purposes.
  • Link to the IRS instructions for this form: http://www.irs.gov/pub/irs-pdf/iw8ben.pdf

Moneyfarm UK ISA Questions

moneyfarm uk

10. Why is a stocks & shares ISA important?

ISA stands for Individual Savings Account. The main difference between an ISA and any other savings account is that it offers tax-free interest payments, so you could get more for your money. Moneyfarm UK build portfolios with a diverse range of assets based on your investor profile and time horizon to ensure you’re comfortable with any losses, whilst also aiming to deliver long-term returns.

Why should you care about a stocks & shares ISA?

  • A stocks and shares ISA is important because it helps protect your money from inflation and helps it grow further. Additionally, the money is protected in a tax-free wrapper.
  • A stocks & shares ISA is perfect for long term investment goals. As markets fluctuate, there’s an opportunity to grow your money. However, over a five year period or more, there is always the risk of inflation. A stocks & shares ISA helps shield you from the inflation risk.

11. Does Moneyfarm offer a Junior ISA?

Junior Individual Savings Accounts (JISAs) are long-term, tax-free savings accounts for children. Moneyfarm does not currently offer a Junior ISA (JISA).

12. Does Moneyfarm offer a help-to-buy or lifetime ISA?

Lifetime ISAs (also known as LISAs) are a new type of ISA created specifically to help people save for their first home or retirement. Ideally, you can use a Lifetime ISA to buy your first home or save for later life. You must be 18 or over but under 40 to open a Lifetime ISA. You can put in up to £4,000 each year, until you’re 50. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.

Moneyfarm does not offer the Help-to-Buy or Lifetime ISA.

13. Does Moneyfarm offer a Cash ISA?

A Cash ISA´ is just a savings accounts you NEVER pay tax on. Everyone in the UK aged 16 or over gets an ISA allowance at the start of each tax year. Moneyfarm does not offer Cash ISAs

What type of ISAs does Monefarm UK offer?

  • Stocks & Shares ISA
  • Pension and General Investment Account. Moneyfarm main aim is to provide cost-efficient investment advice with a discretionary service.

14. Does the Moneyfarm Stocks & Shares ISA have any tax benefits?

The tax treatment of a Moneyfarm Stocks & Shares ISA depends on your individual circumstances and may be subject to change in the future.

What tax benefits can you expect in general?

  • When you invest in an ISA, you will not liable for Capital Gains Tax (CGT) on any profit you make when you sell your investments. ISAs have generous tax benefits that can help you maximize your investment returns.
  • ISAs will also protect any income from your investments in your tax-free wrapper.

15. What are the requisites to open a Moneyfarm Stocks & Shares ISA?

To open a Moneyfarm Stocks & Shares ISA:

  • you must be at least 18 years old
  • you must be a UK resident for tax purposes.

16. Can I withdraw from my Moneyfarm Stocks & Shares ISA?

Just like any other ISA, you can withdraw money from your Moneyfarm ISA whenever you need to, without it impacting your ISA allowance from that tax year.

Does Moneyfarm charge you for withdrawing from your ISA?

  • Moneyfarm makes sure that you have flexible access to your investments. They therefore do not charge you to withdraw from your ISA.

17. How much is the Moneyfarm ISA allowance?

The ISA allowance automatically refreshes after the 5th of April (the end of the tax year). Whether the ISA is charged an allowance depends on the government. For the tax year 2019/2020 you can put up to £20,000 in your ISA.

How can I allocate my ISA allowance of £20,000?

  • Pay your allowance into a stocks and shares ISA
  • Pay your allowance into a Cash ISA
  • Pay your allowances into a combination of the two

Can I open a Stocks and Shares ISA with Moneyfarm UK if I have a Cash ISA elsewhere?

Yes. You can choose between making a lump sum investment, and/or making regular contributions throughout the tax year. The ISA is flexible to suit you. Your annual ISA allowance expires at the end of the tax year and any unused allowance will be lost. It’s a case of ‘use it or lose it’, as your allowance can’t be rolled into the next year. With Moneyfarm, you can invest more than the ISA allowance, but any investments outside the wrapper threshold won’t be sheltered from tax.

18. What is a Moneyfarm Stocks & Shares ISA?

A Moneyfarm Stocks & shares ISAs is an ISA that allows you to grow your money in a simple and tax-efficient way over the long-term.

You can invest up to £20,000 in your stocks & shares ISA each financial year, and any growth in the value of your money and any income can build up protected within your tax-free wrapper.

Moneyfarm UK Pension Questions

moneyfarm uk

19. Can I transfer my pension to the Moneyfarm Pension?

Yes. You can transfer money from your other pensions into your Moneyfarm Pension, including from SIPPs and workplace pension schemes, so long as you haven’t started to take income from them. Your pension savings are initially transferred as cash, and then reinvested once the money arrives in your Moneyfarm Pension. Moneyfarm won’t charge you a fee for transferring your pension.

What about benefits schemes?
No. You will not be able to transfer defined benefit schemes, also known as final salary schemes.

You may lose certain benefits or incur exit fees if you leave your current provider, and there is no guarantee that the benefits you receive from your Moneyfarm Pension will be higher or lower.

20. Does Moneyfarm have a minimum transfer value?

Moneyfarm has standard minimums transfer values.

What should you be aware when it comes to Moneyfarm transfer values?

  • You’ll need at least £1,500 to open a portfolio but we recommend at least £2,500 to benefit from full diversification.
  • You’ll need to set up a monthly Direct Debit of £100 if you have less than £5,000 in your pension.

21. How do I transfer a pension to Moneyfarm?

Moneyfarm has very simple steps to create pension portfolio:

  • Create a pension portfolio with Moneyfarm and indicate that you’d like to transfer a pension free of charge
  • Fill in the fields (current pension provider, account number and estimated value)

22. Can I transfer a pension to Moneyfarm if I’ve started to take benefits?

No, unfortunately Moneyfarm does not accept crystallised pension transfers. If you have only crystallised a portion of your pension (taken benefits from a small amount of your overall pension) then you can transfer the uncrystallised portion.

23. What type of pensions can I transfer to Moneyfarm?

We can accept the transfer of any defined contribution pension, provided you haven’t started to take benefits from this and that there are no loss guarantees.

Moneyfarm cannot accept the transfer of final salary (defined benefit) pensions without you taking independent financial advice. Please note: If you have already started to take benefits from your pension Moneyfarm cannot accept the pension transfer.

24. How long does it take to transfer a pension to Moneyfarm?

Pension transfers vary by provider. Moneyfarm will contact your existing provider on your behalf to make sure that there are no issues with the transfer.

  • Some providers are on an automated platform which takes an average of eight working days.
  • Others take longer, up to as much three months.

25. What happens to your Moneyfarm pension when you die?

If you die before the age of 75

  • The value of your pension can be paid to your beneficiaries in the form of a lump sum or income.
  • The benefits will normally be tax-free, as long as they are paid (or, in the case of the payment of pension income, designated for that purpose) within two years of your death.
  • Your beneficiaries may pay a tax charge if your pension value exceeds the lifetime allowance.

If you die after reaching 75

  • The value of your pension can still be passed to your beneficiaries, but will be subject to income tax.

26. What annuity could I get with my Moneyfarm pension when I retire?

If you use all or part of your pension to purchase an annuity with another provider, the amount of income and level of benefits you receive will depend on the annuity rate offered to you by the annuity provider you choose at the time. However, annuity rates may be lower in future.

27. How much tax will I pay on my Moneyfarm pension?

You can usually take 25% of your total pension pot as a tax-free lump sum from the age of 55. The remainder can be used to provide you with an income throughout retirement. However:

  • typically through an annuity or income drawdown
  • and will be subject to income tax depending on its value and your other taxable income. You may end up paying a lower rate of tax when you retire as your income reduces

28. What is the lifetime pension allowance?

Pensions have a lifetime allowance, which is £1.05 million in the 2019/20 tax year.

If your total pension savings exceed the lifetime allowance when you decide to take benefits, a tax charge applies, called the lifetime allowance charge.

The amount of the lifetime allowance charge depends on how you take the excess benefits from your pension:

  • If you take the excess as a lump sum, it will be subject to a 55% tax charge. If you decide to use the excess as income, it will immediately be subject to a 25% tax charge, and your income will then be subject to income tax.
  • If your savings exceed the new lower limit after the standard lifetime allowance was reduced to £1 million in 2016, you may be able to apply for a lifetime allowance protection scheme.

Moneyfarm UK Profiling Questions

moneyfarm uk

29. Why does Moneyfarm need to assess my risk profile?

Your risk profile represents your personality, financial background, time horizon and objectives, and influences your investment pattern.

Moneyfarm builds and manages portfolios that are specifically designed to reflect your suitability requirements.

30. How does Moneyfarm understand my attitude to risk?

Moneyfarm has developed a questionnaire-based algorithm that matches you to an investor profile. By understanding you a bit better, your goals, time horizon, and any personality characteristics that influence your relationship with investments, they are able to build a profile of you that reflects your tolerance to risk.

How does Moneyfarm use this profile?

  • They use the investor profile in conjunction with specific portfolio objectives to determine the most suitable mix of investments to help you reach your goals.
  • They build your portfolio and continually manage it until you take your money out to ensure if continues to reflect your tolerance to risk.

Moneyfarm UK Fees Questions

moneyfarm uk

31. How does Moneyfarm calculate fees?

We use a single management fee at account level that covers all your Moneyfarm products in order to calculate fees daily, based on the total market value of your portfolio. It’s a simple, low-cost fee structure that lets you know exactly what you’re paying and in order to keep more of your money. That means that as the value of your portfolio goes up and down, so do the fees you pay.

How does the Moneyfarm single management fee works?

  • 0.75% on investments between £1,500 to £10,000
  • 0.6% on any investments from £10,001 to £50,000
  • 0.5% on any investments from £50,001 to £100,000
  • 0.35% on any investments over £100,000 +
  • For example, if you invested £210,000 with Moneyfarm, you’d pay:
  • 0.75% up to £10,000
  • 0.6% on the next £40,000
  • 0.5% on the next £50,000
  • 0.35% on the remaining £110,000

What can affect how much Moneyfarm fees you pay?

  • An increase in the total value of your Moneyfarm account.
  • The ‘market spread’ or the difference between ‘bid’ and ‘ask’ (buying and selling) prices for an investment at a specific time. This can be up to 0.09%.

32. Do the Moneyfarm ETFs come with any fees?

Moneyfarm charges 0.2% per annum for the low-cost EFTs. The cost is charged by the fund managers and is built into the price of the ETF on any given day. However, the charges will not be deducted from your portfolio directly.

Are there any other Moneyfarm charges?

  • Moneyfarm will also charge you a management fee which is separate from the fund fee. If you invest £20,000 with Moneyfarm, you’ll be charged 0.7% in management fees.

33. What is included/excluded from the annual Moneyfarm fee?

With the Moneyfarm simple charging structure, you will pay two ongoing charges on your investments:

  • A management fee
  • A fund charge

What is the difference between the Moneyfarm fee and the Moneyfarm fund charge?

  • Management fees are charged based on the value of your account, rather than per portfolio, so by consolidating your investments you can benefit from a potentially lower management fee. It covers all charges related to managing your investments and is the largest part of the total costs of investing.
  • Fund costs are not included in the annual management fee and won’t appear as a charge, instead these are factored into the performance of your investment. The average fund charge is 0.2%  at Moneyfarm. The market spread effect also impacts your investments. This is a characteristic of trading on the financial markets and represents the difference between bid and ask (buying and selling) prices for an investment at a specific time.

34. How do I pay fees at Moneyfarm?

The fees are charged automatically and offset against the cash liquidity held in your account, which is around 2-3%.

Moneyfarm UK Account Funding Questions

35. Is there a minimum Moneyfarm investment amount to set up a direct debit?

To set up a direct debit with Moneyfarm, you’ll need to set up a monthly contribution of at least £100.

36. How do I cancel a monthly Direct Debit to Moneyfarm?

Moneyfarm UK allows you the flexibility to cancel your direct debit at any time.

What steps do I need to take to cancel my direct debit with Moneyfarm UK?

  • Go to your Account
  • Check under your Funding Details
  • Click ‘x’ on the regular payment or swiping left.

37. Is there a limit to how much I can deposit in my Moneyfarm account using Direct Debit?

Yes. Moneyfarm has a monthly limit of £20,000 for payments via Direct Debit.

Any larger sums on a monthly basis will require you to set up a standing order with your bank.

38. Does the Direct Debit Guarantee work at Moneyfarm?

The Direct Debit Guarantee is offered by all banks and building societies that accept instructions to pay Direct Debits. It covers all Direct Debits, and protects you in the rare event that there’s an error in the payment of your Direct Debit.

39. When will the funds appear in my Moneyfarm account?

It takes 1 working day for the money to show up in your account when funds were sent funds via bank transfer,  

  • However, it takes some banks up to 2-3 working days to process the transfer.
  • For direct debit payments (both one-off and monthly), it can take up to 4 working days for the money to show up in your account, depending on your bank, and an additional working day for the funds to be invested.

40. When does Moneyfarm take the Direct Debit?

  • Moneyfarm tries to collect the monthly contributions from your bank as close to the date you chose when setting-up the direct debit.
  • For one-off contributions, we take the payment as soon as possible.
  • It may take up to six days to set up your direct debit mandate, which can mean your first recurring payment may take slightly longer to process.

41. Can I set up more than one Direct Debit with Moneyfarm?

If you have one Moneyfarm investment portfolio in your account, you can set up more than one direct debit from the nominated bank account and select the amount you’d like to go into each portfolio each month.

For security reasons and anti-money laundering (AML), Moneyfarm does not accept direct debits from different banks

42. Can I use a Moneyfarm Direct Debit to make a one-time payment?

Yes, direct debit payments can be used for:

  • one-off transaction –  when adding funds, simply select “one-time”
  • and regular payments – when adding funds, simply select “direct debit”

43. How do I add or change the bank account details in the Moneyfarm account?

Changes t your bank details set up on your Moneyfarm account can only be done by Moneyfarm

What do I need to provide Moneafarm so that they can change my bank details?

  • Simply email Moneyfarm at support@moneyfarm.com from your registered email address with a copy (PDF from your online banking or a photograph of the original) of a bank statement for the account you wish to add or change to.
  • Provide your name, postal address and account details

44. Can I transfer funds from another bank account to Moneyfarm?

Yes, you can send funds from any bank account as long as it is in your name and has been registered to your Moneyfarm account.

Moneyfarm UK Terms of Service Questions

45. What do I need to do when the bank account I set up with Moneyfarm is pending?

If Moneyfarm is unable to electronically verify your bank account, it will have a ‘pending’ status.

What happens when my bank has a “pending” status?

  • Provide Moneyfarm a picture or scan of a full bank statement dated within the last three months with all four corners of your statement visible in the file/image you send to Moneyfarm. Verification of the statement takes 1 day after which the status changes to “active”

46. What happens to my Moneyfarm investments if I’m subject to personal account dealing rules?

Certain rules and conditions may restrict your Moneyfarm account and:

  • prevent you from holding certain securities
  • enforce a minimum holding period
  • restrict trading periods
  • force the sale of a security and so on.

Additionally, if you in the following professions, you may have restrictions in then type of securities you can invest in:

  • financial services
  • Consulting
  • legal firm 
  • accounting firms
  • government departments)  

What benefit does Moneyfarm offer if the rules / restrictions apply to my investments?

  • The discretionary Moneyfarm investment accounts are exempt from these rules as all the investment decisions are made by the investment manager, not the individual.
  • This usually makes your investment choice greater and your life easier, since you may no longer need to seek approval from your employer for any investment transactions made by Moneyfarm.

47. Am I locked into my Moneyfarm investments?

No. Moneyfarm investments are flexible and do not have a minimum investment period. You can withdraw whenever you like without paying any additional fees.

However, normal pension rules may apply to pensions.

Moneyfarm Uk Security Questions

48. What happens if Moneyfarm enters administration?

  • Your Moneyfarm funds and market value of assets are held in a custodian bank or client money account. As these bank accounts are held by Moneyfarm in trust for underlying clients, no creditors would be able to access or make any claim on the money.
  • Your money and investments are also eligible for compensation under the Financial Services Compensation Scheme (FSCS) for up to £85,000 if the company is unable to repay investments or money.

49. Is my money safe with Moneyfarm UK? And is my personal information secure with Moneyfarm?

Moneyfarm is obligated by the FCA, to segregate client funds and assets. This means that your money and investments are held separately from Moneyfarm’s own bank account and cannot be mixed with our own funds.

A custodian bank has been appointed to hold your money and the investments Moneyfarm purchases on your behalf, with a reference number unique to you.

Which custodian banks does Moneyfarm work with?

  • Barclays
  • Saxo Capital Markets UK Ltd

How does Moneyfarm protect my privacy?

Moneyfarm takes serious precautions with client privacy and ensures that your personal details and your account data are always encrypted and stored on secure servers. Your privacy is important to us.

50. Is Moneyfarm regulated?

Yes, Moneyfarm is authorised and regulated to give investment advice and provide a discretionary service by the Financial Conduct Authority (FCA) no. 629539.

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