Both firms can help you invest and grow your money but there is a key difference: Vanguard is an asset manager with a platform that allows you to buy, hold and sell its own investment funds, while Moneyfarm is a digital wealth manager offering risk-graded portfolios.
Vanguard is cheaper for most investors, but your choice will also depend on how confident you are with investments. With Vanguard you’ll be making the investment decisions (unless you choose its Managed ISA option), while Moneyfarm has experts on hand to manage your investments for you.
What is Moneyfarm?
Moneyfarm launched in the UK in 2016, after running a similar service in Italy since 2012. 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 investments. The firm also has expert investment consultants to advise customers who need extra help, and an asset allocation team who actively manage its portfolios.
In December 2024 it acquired investment services firm Willis Owen, having previously bought Profile Pensions and Wealthsimple’s UK book of business. The deal took it from around 130,000 active investors to 160,000 and means it will have more than £5bn in asset under management on completion in early 2025. It also has financial backing from big firms including Allianz Global Investors, M&G, Cabot Square Capital, United Ventures, and Poste Italiane.
What is Vanguard?
Vanguard is popular with investors who want to keep their investments simple, passive and low cost. Vanguard started in the US in 1975, becoming one of the world’s largest fund groups known for its low-cost passive funds. Vanguard’s US founder John C. Bogle was a pioneer of index funds in the US and a proponent of low-cost investing by individuals.
Index funds, also known as passive funds, don’t pick individual shares or bonds to beat the market, but track the performance of the entire market. Vanguard entered the UK market in 2009 and as of July 2024 had 640,000 UK customers (up from 575,000 a year earlier), with some £24 billion in assets on the platform.
Moneyfarm v Vanguard – product on offer
Moneyfarm and Vanguard have the same account options – with both firms you can invest using stocks and shares Individual Savings Accounts (ISA), Junior Individual Savings Accounts (JISA), Self-Invested Personal Pensions (SIPP) and General Accounts. Both firms allow you to get started investing with a minimum lump sum of £500. Vanguard also lets you begin with £100 a month.
Moneyfarm’s smart tech uses your bespoke investor profile, generated using an online questionnaire, to recommend the best portfolios for your investing style and appetite for risk. It chooses from three portfolio investment styles and then selects from 7 risk levels within the style. Its investment team selects and manages your chosen portfolio using Exchange Traded Funds (ETFs) as low-cost building blocks. ETFs are a type of investment fund, listed on stock exchanges, which replicate the performance of a pool of investments or an index.
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.
Vanguard gives investors access to 86 Vanguard funds, including index and active funds, Exchange Traded Funds (ETFs) and the popular LifeStrategy and Target Retirement Fund (TRF) ranges, which are like ready-made portfolios with different risk levels. The Vanguard Funds are low cost, charging 0.20% on average.
Vanguard has a tool to help you choose funds, which starts by asking 6 questions to help them understand your attitude to risk. Vanguard also offers a Managed ISA with ‘guidance from real human experts’ for investors who don’t want to make their own decisions.
With Moneyfarm, you’ll pay a management fee based on the total value of your investments, which starts at 0.75% for investments under £10,000, and reduces 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.
Vanguard is cheaper, charging a low platform fee of 0.15% per year (£15 on an investment of £10,000), capping this at £375 per year for accounts with investments over £250,000. However, as of February 2025 SIPP, ISA and general account holders with Vanguard will pay £4 a month – £48 a year – if they have less than £32,000 invested. The 0.15% a year charge kicks in for customers with £32,000 or more invested. The Vanguard Managed ISA is more expensive, although the charge is reduced from 0.60% to 0.51% a year from February 2025, with the firm cutting the management fee on the Vanguard Managed ISA from 0.3 to 0.2%.
On top of this with both Moneyfarm and Vanguard you have to pay the ongoing fees attached to the funds, which average about 0.2% with both firms.
Moneyfarm v Vanguard – research, tools and features
Vanguard has a decent pension calculator to help you find out if you’re on target for the retirement you want. It also offers educational resources to help customers navigate the investment world. Moneyfarm has a good blog, with plenty of insights into the investment world provided by its chief investment officer.
Moneyfarm v Vanguard – user experience
Customer reviews on consumer website Trustpilot give a good idea of overall customer satisfaction.
Moneyfarm has a good rating of 4.2 from almost 1,300 reviews. Customers giving positive reviews often mention its easy navigation and accessibility, but some feel let down by Moneyfarm’s customer service and investment performance.
Vanguard also scores 4.2 (based on over 3,000 reviews). Lots of the Vanguard reviews praise the customer service and the low fees, while there are a few negative reviews related to transferring money out.
Notably, Moneyfarm asks its customers for reviews, but Trustpilot states it has no recent records of Vanguard asking their customers to review them. Overall, businesses that regularly invite their customers to write reviews tend to have a higher score than businesses that don’t. So adding that information into the equation, Vanguard is the winner on customer service.
Both have decent apps, though Moneyfarm just about edges it. Its app has a 4.6 rating on the app store (based on over 1,800 ratings). Vanguard didn’t launch its UK app until June 2024, so its 4.5 rating is based on just over 170 reviews.
Moneyfarm v Vanguard – quickfire advantages & disadvantages
Moneyfarm advantages
- Good app
- Technology to help you make investment choices
- Designated investment consultants
Moneyfarm disadvantages
- Higher management fees – very expensive for smaller sums invested
Vanguard advantages
- Low platform costs capped at £375 a year
- Tool to help investors choose
- Managed ISA option for the less confident
Vanguard disadvantages
- Only Vanguard-branded investments available
- No lifetime ISA or cash ISA
Our conclusion
There are a greater number of investment options with Vanguard, though if you’re low on investment confidence you may find the choice daunting. Vanguard’s fund selection tool is useful guidance, but Moneyfarm’s online questionnaire is much more detailed and likely more reassuring if you’re a complete beginner.
But also consider the fee difference, where Vanguard is the clear winner. Saving up to 0.6% a year on the platform fees by choosing Vanguard is perhaps a bigger deal than you may think. Over many years the compounding of relatively small differences in fees and charges over several decades can amount to life-changing sums.
If you invested £5,000 over 25 years with an 0.15% charge and got an average annual growth of 6% from the investments, your fund would grow to £20,713. But a 0.75% charge would reduce the end sum to just £17,929. Use our comparison tools to find out what you’d potentially be charged for investing with each of these firms before making your final decision.
