Robo-adviser Moneyfarm overhauls fees

Robo-adviser Moneyfarm overhauls fees

Moneyfarm, the digital wealth manager, has overhauled its fee structure meaning some new investors will be forced to pay more than current customers.

New investors with less than £20,000 to invest will pay 0.7 per cent.

Those investing between £100,001 and £500,000 will pay 0.5 per cent and those investing over £500,000 will pay 0.4 per cent.

Previously the charge was 0.4 per cent for investments between £100,001 and £1m.

Zero fees will remain for existing investors on accounts up to £12,000 and the fee on amounts between £20,000 and £100,000 remain at 0.6 per cent.

Giovanni Daprà, co-founder and chief executive officer of Moneyfarm said: “In announcing a new pricing model we are maintaining our commitment to ensuring we provide the finest digital wealth management service currently available.

"Crucial to that is total transparency in pricing and a refreshing simplicity in how the charges are applied. We are unique in the market by being both committed to a sustainable growth journey and also remaining independent.

“Our new pricing structure will bring Moneyfarm in line with other robo-advisers in the market, whilst remaining much more affordable than the more traditional, wealth managers. We are excited about this next leg of our development journey and are still committed to delivering the best for our customers.”

The provider added that it is about to launch self-invested personal pension.

Alex Davies, founder and chief executive of Wealth Club Ltd said the new deal for Money Farm investors "is a perfectly good one".

"It is still pretty cheap. However what this announcement and various announcements from other robo advisers show is that as a company in this sector it is very difficult to build a profitable business.

"There is an awful lot of money being thrown at it. What’s more every man and his dog has either launched or planning to launch a robo adviser so it is only going to get harder.

"It does beg the question, do people actually want robo advice, or is it just a phenomenon dreamt up by the financial services industry which looks good on paper?”