Moneyfarm: ‘There's a plan to offer pension advice’

Moneyfarm: ‘There's a plan to offer pension advice’
Giovanni Daprà, co-founder and chief executive officer at Moneyfarm

Moneyfarm has plans to offer pension switching and consolidation advice to its customers as part of its expansion in the UK. 

In December, the firm bought UK digital pension adviser and consolidator Profile Pensions to create a “stronger fintech business for customers”.

Speaking to FTAdviser, Giovanni Daprà, co-founder and chief executive officer at Moneyfarm, said the firm currently does not offer pension advice on switches or consolidation in the way it wants to.

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Moneyfarm’s average customer age is  37 years old and Daprà said the key point that he is interested in is pension consolidation.

“Consolidating a pension can deliver a much better outcome for the customers because you take knowledge and conscience of the fee structure, of what they're invested in, and you can optimise across your pension and other assets,” he said.

“That way you don't risk getting your pension in a less risky portfolio.

“I think one of the biggest risks in pensions is either the cost or the risk profile.”

Although consolidation is currently a small part of Moneyfarm, Daprà said, with Profile Pensions, it will become a much bigger part of the business.

“[This is because] what we don't offer today is pension advice and pension [switching] and consolidation in the way that Profile Pensions does so that's one of the reasons why we decided to to bring it in,” he said.

Daprà said there is “absolutely a plan to offer pension advice" at some point in the future.

“The vision for Moneyfarm, both on the B2B and on the on the consumer side, is having a single place where a person can manage all of their wealth, whether it's pension, ISA etc."

More partnerships

Last month, M&G led a £44.1mn funding round in digital investment app Moneyfarm in order to build an M&G Wealth-branded digital investment service for UK retail customers.

The deal, which also garnered investment from Moneyfarm’s minority shareholder Poste Italiane, will see M&G acquire a minority stake in the investment app by the end of the first quarter of 2022.

M&G’s digital investment platform will build on Moneyfarm’s ‘platform-as-a-service’, which has been deployed by other financial firms such as Allianz, UniCredit and Banca Sella over the years.

Speaking about the deal, Daprà said the gap in M&G’s existing offering was a direct to consumer proposition. 

“They had Ascentric, which is the big adviser platform, they have their restricted advisers and everything else, but they were missing something on the direct to consumer space.”

Daprà said the firms began talking and established the relationship late 2021.

“It's a very good fit for us because we were looking for a strong partner in the UK for all our B2B and B2C capabilities and M&G is a really good brand, and even on the consumer side, it’s one of the most known asset managers.”