After comparing Nutmeg and Wealthify last week, PBI now looks at Moneybox vs Moneyfarm.
Moneybox and Moneyfarm were both launched in the UK in 2016, the latter having already been running in Italy since 2011.
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Both have acquired a healthy number of customers, but which is the best place for you to start investing?
Moneybox vs Moneyfarm – Costs*
Moneyfarm’s fees are broadly similar to those of Nutmeg and Wealthify.
As provided to PBI by Moneyfarm, 0.7% is charged on investments up to £20,000, which then reduces to 0.6% (for £20,000-£100,000), 0.5% (£100,000-£500,000), and 0.4% (£500,000+).
Moneybox’s fees are a little more fractured, and swing on the fund management charges levied by the fund providers that your money is invested in. These vary from 0.12% to 0.3%.
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By GlobalDataAdditionally, users are charged a monthly app usage fee of £1 (but not in the first three months) and a 0.45% platform fee.
Based on these figures, a £20,000 investment in your first year with Moneybox would cost £9 to use the app, £90 of platform fee, and between £24 and £60 on fund management charges, for a total in the range of £123 (0.62%) and £159 (0.8%).
*Information provided to PBI by Moneybox and Moneyfarm
Moneybox vs Moneyfarm – User Experience
Both Moneybox and Moneyfarm build a portfolio on the client’s behalf based on aversion to risk.
Moneyfarm matches users to one of six investor profiles ranging from Conservative to Pioneering based on their personality, financial background, and appetite for risk.
“This acts like an investor DNA and influences what goes into the fully-managed investment portfolio,” Moneyfarm tells PBI.
“Moneyfarm’s investment team builds and manages these portfolios in line with a customer’s investor profile and risk appetite.”
Moneybox bypasses the questionnaire and instead the user assigns themselves one of three profiles: Cautious, Balanced or Adventurous.
Moneybox is also different to Moneyfarm and many other platforms in the way investments are made. Moneybox compares itself to an electronic biscuit tin – whenever a user makes a purchase, the transaction is rounded up to the nearest pound and the spare change is sent to their Moneybox account.
Payments can also be made independently of this process.
Moneybox vs Moneyfarm – Advice
Moneyfarm have human consultants available via phone or online chat, to discuss the advice they’ve previously been offered by the platform’s algorithm.
This is not something available at Moneybox as yet.
Moneybox vs Moneyfarm – Security
In the case of both platforms, the first £50,000 invested is protected under the FSCS.
As with other challengers in the finance space, these robo-advisers are yet to prove their profitability.
Moneybox posted a loss of £3.1m in 2017/18, while Moneyfarm’s amounted to £13.9m.
Neither are short of deep-pocketed backers though. Moneybox raised £14m capital in a Series B funding round led by venture capital firm Eight Roads, the proprietary investment arm of Fidelity International.
Moneyfarm meanwhile enjoyed the largest European fundraising round of its kind when it raised £40m in May last year, with investors including Allianz.
Moneyfarm was able to use this to acquire German counterpart Vaamo, adding that market to Italy and the UK.
Moneybox vs Moneyfarm – Conclusions
With its extra years’ experience in Italy, Moneyfarm appears the more complete investment platform, with its simple fee structure, in-depth risk assessment and availability of human advice.
Its growing central European footprint is also a good sign.
Moneybox is clearly designed as mobile-first platform. There’s no facility on its website to login and review your portfolio, this can only be done in the Moneybox app.
Moneybox’s priority therefore would appear to be ensuring the customer experience in the app is as slick and engaging as possible. Its 4.7 rating in the Apple app store on the back of 5500 reviews suggests this is bearing fruit.
As well as this, Moneybox’s spare-change feature and a minimum starting investment of just £1 (Moneyfarm’s is £500) suggests it is aiming to be even more mass-market than its robo-advisory peers.
