These firms’ names are similar and they are both popular with investors who lack the confidence to choose their own investments, but who don’t want to pay for bespoke financial advice. They use technology to make it easy for you to choose and manage your investments, so are sometimes called ‘robo-advisers’. Although they both build a portfolio of suitable investments on your behalf, they have different product and investment ranges, plus varying levels of guidance, so your choice may not simply come down to the costs of investing.
What is Moneybox?
Launched in 2016 by co-founders Ben Stanway and Charlie Mortimer, the Moneybox app made waves with its round-ups feature, which helped thousands of people start investing with their spare change. Today, the app has brought saving, investing, home-buying, and retirement services together, managing over £5bn in assets on behalf of more than 1 million customers. Moneybox is one of the fastest-growing technology companies in the UK and has raised total funds of more than £100 million from investors including Fidelity International Strategic Ventures, Polar Capital, Oxford Capital, CNP, Burda and Breega. The firm has been profitable since Q2 2023.
What is Moneyfarm?
Moneyfarm launched in the UK in 2016, after running a similar service in Italy since 2011. The firm helps customers to get started with investing by harnessing technology. After you spend a few minutes filling out an online questionnaire, it matches you to suitable investment portfolios that it builds and manages in-house. The firm also has expert investment consultants to advise customers who need extra help, and an asset allocation team who actively manage its portfolios. It has financial backing from some big firms, including Allianz Global Investors, M&G, Cabot Square Capital, United Ventures, and Poste Italiane. On a pan-European basis, the firm has over 125,000 active investors and more than £3.5 billion invested on its platform.
Moneybox v Moneyfarm – product on offer
With both firms you can invest using tax efficient wrappers such as Stocks and Shares Individual Savings Accounts (ISA), Junior ISAs, Pension and General Accounts.
Moneybox also offers cash and stocks and shares Lifetime ISAs, which may give it the edge if you’re aged 18–39 and therefore eligible to have one. It also offers simple savings and notice accounts.
Moneyfarm allows you to get started investing with a minimum lump sum of £500, while Moneybox has a starting amount of £1, appealing to those who are starting from scratch. Moneybox also has an innovative feature that can incrementally boost the amount you invest, by rounding up your spare change when you spend.
However, the range of investments and guidance routes to selecting investments differ.
With Moneybox you have to choose investments by yourself. It offers a choice of three diversified ‘Starting Options’. Alternatively, Moneybox gives the option to build your own portfolio from a range of 24 tracker funds and exchange traded funds (ETFs) from a variety of different fund managers. The full fund range includes socially responsible, global, emerging markets, technology and property options.
The Starting Options are Cautious, Balanced and Adventurous. They are made up of a range of diversified tracker funds, with different risk levels and asset allocations for each option. All Starting Options include a global shares fund – you can choose for this fund to be Socially Responsible and invest with an ESG strategy, that focusses on environmental, social and governance issues.
Moneyfarm uses smart tech to create you a bespoke investor profile, generated using an online questionnaire. It then recommends the best portfolios for your investing style and appetite for risk. The Moneyfarm questionnaire is quite detailed which means if you’re a complete novice you might find it a bit complicated. However, there is always the option to speak to one of the firm’s designated investment consultants for free, with a 15-minute call back time, or a slot selected at your convenience.
Moneyfarm offers a choice between actively managed, fixed allocation and liquidity+ portfolios. Its actively managed portfolios benefit from constant monitoring to make sure your investments are working hard, dividends are being reinvested, and are performing their best every day. With fixed allocation, your investments follow the markets, meaning there are lower costs for investing. Liquidity+ portfolios are designed for shorter term investment goals of two years or less. Moneyfarm’s guidance questionnaire process selects one of these but also selects from 7 risk levels, with socially responsible and thematic investment options also available.
Both firms offer access to direct investments in company shares, with Moneyfarm offering greater choice, albeit restricted to the UK.
Moneyfarm offers Share Investing accounts where you can buy shares in all UK-listed companies and ETFs. This option is available within its Stocks and Shares ISA and General Investment account.
Moneybox’s range of ‘stocks’ is limited to 20 of the biggest and best-known US-listed companies, including tech titans Amazon, Apple, Tesla and Microsoft, plus global brands Coca-Cola, JPMorgan Chase & Co, Nike and McDonald’s. With Moneybox, you can buy shares regularly with Weekly Stocks or with a one-off buy. And, if you can’t afford a whole share, you can work up with fractional shares.
It’s difficult to compare investment performance exactly, with both firms showing investment track records on their websites. However, on the average risk level investment option, Moneybox has performed better. Here, Moneybox’s Balanced portfolio vs Moneyfarm Actively Managed risk level 4 feels like a good direct comparison. In 2022, Moneybox Balanced delivered average annual returns of -8.6% vs Moneyfarm 4 delivering -9.1%. Performance in 2021 was Moneybox at 18.1% vs Moneyfarm at 8.8%.
With both firms you’ll pay a management fee based on the total value of your investments.
Moneyfarm’s actively managed portfolios start at 0.75% for investments under £10,000, and reduce on a sliding scale down to 0.35% for those with more than £500,000 saved. Its annual fees would be £70 on an investment of £10,000 and £1,750 on £500,000. Moneyfarm has lower fees for its Fixed Allocation portfolios, starting at 0.45% on the first £100,000 and reducing down to 0.25% for investments over £500,000.
Moneybox’s fees start with a £1 monthly subscription fee, which is free for the first 3 months and waived for its pension. On top of this is a platform fee of 0.45% (£45 on an investment of £10,000) which for the pension reduces to 0.15% on balances of over £100k.
On top of these management fees, you have to pay the ongoing fees attached to the investments. With Moneyfarm, these average about 0.2%. Moneybox’s are 0.12% to 0.58%.
Moneybox v Moneyfarm – research, tools and features
Moneybox has some great educational content, including a video archive. Plus it has an academy structured as lessons to help you get to grips with investments and pensions. It also has excellent house deposit and pension calculators to show you much you’ll likely need to be saving to achieve your goals.
Moneyfarm has a good blog, with plenty of insights into the investment world provided by its chief investment officer and other writers. Topics include financial markets, economics, financial planning, retirement, pensions and tax. Plus, it has a few guides to help you get started and a pension calculator.
If you’re a beginner, Moneybox has the slight edge for the way its content is structured for easy navigation and the tone of the language used.
Moneybox v Moneyfarm – user experience
Customer reviews on consumer website Trustpilot give a good idea of overall customer satisfaction.
Both have ‘good’ ratings, with Moneybox having the edge at 4.4 out of 5 (based on 1651 reviews) v Moneyfarm at 4.0 out of 5 (based on over 1,000 reviews).
Overall, businesses that regularly invite their customers to write reviews tend to have a higher TrustScore than businesses that don’t. And Moneyfarm asks its customers for reviews, but Trustpilot states it has no recent records of Moneybox asking their customers to review them. You might therefore reasonably conclude that Moneybox is the firm winner on customer satisfaction.
Meanwhile, if a decent app is important to you, Moneybox may also have the slight edge. It has an App Store rating of 4.8 (based on 44,300 ratings) v Moneyfarm at 4.6 (based on 1,700 ratings).
Moneybox v Moneyfarm – quickfire advantages & disadvantages
Moneybox advantages
- Cash and stocks and shares Lifetime ISAs
- Range of savings accounts
- Content designed for beginners
- Access to US shares
- Higher customer service score with Trustpilot
Moneybox disadvantages
- Doesn’t offer financial guidance
- Limited range of shares with no access to UK-listed companies
Moneyfarm advantages
- Online questionnaire to help you make investment choices
- Designated free investment consultants if you get stuck
- Share investing account
Moneyfarm disadvantages
- Fewer tools and calculators
- No access to US shares
- Lower customer service score with Trustpilot
Our conclusion
You may prefer Moneybox for its additional savings accounts and Cash ISA. Also, if you’re under 40 and want to open a Lifetime ISA, you’ll have to go to Moneybox, as Moneyfarm doesn’t offer one. Moneybox customers also love its round-up feature that can incrementally boost investment amounts. Plus, it has slightly better customer service and app ratings.
However, Moneyfarm has a wider range of investments, with the added support of a free investment consultant to help you choose. If you’re a complete investment beginner, Moneyfarm’s online questionnaire to help choose an investment for you, plus its free access to investment consultants, are likely a big plus. More experienced or confident investors might also want to take advantage of Moneyfarm’s share investing account.
Moneybox’s base platform fee is much lower than Moneyfarm’s, it’s also difficult to compare fees because of the impact that Moneybox’s monthly £1 subscription has on small investment pots. Use Compare and Invest to find out what you’d potentially be charged for investing with each of these firms before making your final decision.
