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Moneyfarm Vs Nutmeg

Moneyfarm Vs Nutmeg feature image

Published on:

Written by: Michael Barton

Published on:

Written by: Michael Barton

Michael has almost quarter of a century’s experience in the financial world. This includes trading and institutional sales trading, and in senior positions to VP of Global Equities, as well as Head of Trader Training, at companies including Merrill Lynch (SNC), Cargill Investor Services, and Goldman Sachs. Michael’s experience also extends to providing financial advice as a personal financial advisor in the UK.
This article has been fact checked by a member of the Wallet Savvy editorial team and complies with our editorial standards.

Start investing with the flexibility and convenience of expert guidance at your fingertips – an investment platform. We’ve got two fantastic options here – it’s Moneyfarm vs Nutmeg. But which one could work best for you?

Moneyfarm and Nutmeg are two of the UK’s most popular investment platforms for both novice investors.

Both are designed for the modern digital era, operating on a ‘set-and-forget’ investment model. After setting up your account and direct debits, these platforms take over the management of your investments.

They are accessible via both mobile apps (iOS and Android) and web-based platforms, providing convenience and flexibility.

The question is, do they deserve their popularity? If they do, which is best for you?

You’ll find the answers in this comprehensive comparison, in which I look at everything from products and services to asset choice, funds, and fees.

TLDR: Moneyfarm Vs Nutmeg Verdict

Moneyfarm and Nutmeg are two of the most popular robo-advisors in the UK, both offering automated portfolio management.

Moneyfarm excels with its approach of combining technology with human advice, as well as providing full flexibility to change your portfolio when you wish.

Nutmeg offers a wider range of portfolios, ideal for those looking for diverse investment choices.

Both platforms are an excellent choice for investors, whether novice or more experienced – your preference will depend on several factors such as your investor profile, risk tolerance, and investment preferences.

How Do They Work?

Moneyfarm and Nutmeg are what we call ‘robo-advisors’. They use technology to simplify the investment process, offering professional portfolio management and other services at highly competitive fees.

Moneyfarm

Moneyfarm dashboard on phone

Moneyfarm launched in the UK in 2016, and is backed by several major investors, including Allianz Global Investors and M&G. It has more than 125,000 active investors in Europe and manages over £3.5 billion in assets.

Its process focuses on understanding your investment goals and risk tolerance through a detailed questionnaire. The information you provide is then used to match you to a portfolio that works well with your investor profile.

Its portfolios are managed by an in-house team of investment experts who analyse markets and portfolio performance, continually adjusting holdings accordingly to pivot from your goals and risk level.

In addition to this, Moneyfarm also offers the guidance of investment consultants who can provide personalised advice if you need extra help.

Nutmeg

Founded in 2011, Nutmeg builds and manages diversified portfolios tailored to investors’ needs.

You don’t need to choose investments yourself; Nutmeg handles everything for you. It manages around £5 billion in assets for more than 230,000 investors.

Once registered, you can set up a portfolio in less than 10 minutes. Nutmeg uses mostly ETFs (Exchange Traded Funds) to construct 20 different portfolios that range in risk level and offer ethical investment opportunities, too.

You can also receive advice from Nutmeg’s team, though this is restricted to their own products.

Product & Service Offerings

You’ll have a range of investment options available with both Moneyfarm and Nutmeg: General Investment Accounts (GIAs), tax-efficient ISAs and Junior ISAs, and SIPPs for retirement planning.

In addition, Nutmeg also offers a Lifetime ISA (LISA), which is designed for those saving a deposit for their first home or for retirement.

Nutmeg also offers a personal financial advice service, provided by its team. This service is free, though you’ll only receive general advice about its products. For more personalised financial guidance you could use Nutmeg’s personal financial planning service, which costs £575.

Like Nutmeg, Moneyfarm offers a free financial guidance service. While this is aimed at helping you make more informed investment decisions, it does not provide the depth of advice provided by Nutmeg’s paid-for financial planning service.

Portfolios, Funds, & Other Assets

Moneyfarm and Nutmeg construct their portfolios using cost-efficient ETFs, meaning their fund charges are among the lowest in the market (more about this in a moment).

Moneyfarm offers a range of portfolio types: fixed allocation, actively managed, and liquidity+. Its fixed allocation portfolios are lower cost and follow the market.

The actively managed portfolios are constantly monitored by a professional investment team with the goal of outperforming markets. Liquidity+ portfolios are ideal for shorter time horizons of less than two years.

The questionnaire you complete when you register for an account helps the tech to select which type of portfolio is best for you, as well as determining which of seven risk levels is most appropriate. You can also choose to invest in ethical funds or other thematic options.

If you want a more hands-on investment experience, you can also select your own investments and buy shares into an ISA or GIA through the Moneyfarm platform.

Nutmeg’s approach is similar, but with a few key differences.

Rather than seven risk levels, its portfolio range covers up to 10 risk profiles. These are based on five investment styles with ETFs used for diversification across shares, bonds, industrial sectors, and geographies.

Unlike Moneyfarm, with Nutmeg you must select your risk level and investment style yourself, with technology then managing your investments.

Its fixed allocation portfolios are managed by technology, while an investment team monitors its fully managed and socially responsible portfolios daily. It also offers Smart Alpha portfolios that are managed by JP Morgan.

Like Moneyfarm, Nutmeg offers thematic investing, though this is only available at risk levels 5 to 10.

Their Apps

Moneyfarm’s investment app is designed to make investing accessible, convenient, and user-friendly, for both novice and experienced investors.

The app allows you to track your investments in real time, providing a detailed breakdown of your portfolio’s allocation by asset class and giving insights about performance and market trends. If you need to adjust your strategy, it’s easy to do so.

Overall, the app is designed with a clean, intuitive interface that makes it easy to navigate through its features and access the information you need.

Nutmeg’s investment app makes it easy for you to manage your investments on the go. You’ll be able to monitor your investment performance, as well as access updates about investment strategies and market news.

It’s an intuitive, user-friendly interface that provides detailed reports on demand.

Both Moneyfarm and Nutmeg provide various tools to help you invest more effectively. These include investment calculators, and advice and guidance via articles, eBooks, and more.

Overall, Nutmeg’s app provides a tad more functionality than the Moneyfarm app. This is reflected in ratings on Apple’s app store – while both score highly, Nutmeg scores 4.8/5 and Moneyfarm scores 4.6/5.

Comparing Fees

Both Moneyfarm and Nutmeg operate a tiered pricing structure, meaning the more you invest the lower the charge. Fees also depend upon your style of investment/portfolio choice.

Moneyfarm Fees

Moneyfarm’s charges reduce the larger your portfolio, with the reduced fee charged on the entire value of your portfolio:

Active Management<£10k£10k
to £20k
£20k
to £50k
£50k
to £100k
£100k
to £250k
£250k
to £500k
>£500k
Moneyfarm Fee0.75%0.70%0.65%0.60%0.45%0.40%0.35%
Av. Investment Fund Fee0.20%0.20%0.20%0.20%0.20%0.20%0.20%
Average Annual Market Spread0.10%0.10%0.10%0.10%0.10%0.10%0.10%
Total1.05%0.30%0.95%0.90%0.75%0.70%0.65%
Fixed Allocation<£100k£100k to £250k£250k to £500k>£500k
Moneyfarm Fee0.45%0.35%0.30%0.25%
Av. Investment Fund Fee0.15%0.15%0.15%0.15%
Average Annual Market Spread0.02%0.02%0.02%0.02%
Total0.62%0.52%0.47%0.42%


Should you invest in a Liquidity+ portfolio, you’ll be charged a 0.30% Moneyfarm fee and an underlying fund fee of 0.10%, irrespective of the size of your portfolio.

Share dealing is charged at £3.95 per trade.

Nutmeg Fees

Nutmeg’s fee structure is less complex. On all its portfolios except fixed allocation, it charges a Nutmeg fee of 0.75% up to £100k and 0.35% on the portion above this.

The Nutmeg fee on its fixed allocation portfolio is 0.45% up to a value of £100k, and 0.25% on the portion above this. In addition to this fee, you’ll also pay fund costs and a spread as follows:

Portfolio TypeFully ManagedThematicSmart AlphaSocially ResponsibleFixed Allocation
Fund Costs0.20%0.24%0.31%0.29%0.20%
Market Spread0.03%0.03%0.03%0.03%0.03%

Comparisons

Let’s compare total Moneyfarm Active Management to Nutmeg Fully Managed, for a portfolio size of £25k, £100k, and £250k:

Portfolio SizeMoneyfarmNutmeg
£25k£237.50£245
£100k£750£980
£250k£1,750£1,620

Which Is Best For Beginners?

If you’re just starting out with investment, platform choice is crucial. I like both Moneyfarm and Nutmeg for beginners, though there are a few key differences.

You’ll find it easy to open an account with both companies, and both use technology to help you on your investment journey.

If you’re happy with a technology-led approach, Nutmeg offers a range of portfolios to cater for you whatever your investment and risk profile. If you want the comfort of personalised guidance, Moneyfarm’s approach of combining technology with access to human consultants may be more reassuring.

The best way to sum up is that both are ideal platforms for beginners – simply distinct types of beginners.

Is Your Money Safe?

Whenever you’re investing, your capital is at risk – investments go down as well as up. But what about your money, your personal data, and your account?

Both Moneyfarm and Nutmeg are regulated by the Financial Conduct Authority (FCA) and covered by the Financial Services Compensation Scheme (FSCS). This means they must both adhere to strict standards like other regulated financial companies in the UK and, if they were to go bankrupt, up to £85,000 of your money/investments that you have with them is protected.

They both use custodian services to keep your funds separate to their own, and employ layered protection such as advanced encryption and secure login processes to protect your personal information and account details.

They’re also backed by some big players – JP Morgan Chase own Nutmeg, and Moneyfarm is supported by significant investors such as Allianz Global Investors and M&G.

In summary, whether you choose Moneyfarm or Nutmeg, you can be confident that both platforms have robust measures in place to protect your money, providing a safe environment for your investments.

How they perform, of course, depends on the ebbs and flows of financial markets.

How To Get Started

It’s an equally effortless process to get started with both Moneyfarm and Nutmeg.

Start by visiting their respective websites or downloading their apps. You’ll then need to fill out an online questionnaire, after which a diversified portfolio will be suggested to you.

Create an account, make your deposit, and select your portfolio to get started.

Weighing Up The Pros & Cons

No investment platform can be perfect for all. Before deciding on which is ideal for you, it’s a good strategy to consider the pros and cons of each platform.

Moneyfarm

Moneyfarm offers several advantages for investors, especially if you’re new to investing. You can receive personalised guidance from its investment experts, as well as benefit from active portfolio management with continuous monitoring of portfolios to ensure investments are optimised to current financial market trends.

On top of this, you can change your portfolio to match your evolving investor profile to make sure that your investments align with changing financial goals. Additionally, you’ll need a low initial investment to get started.

However, Moneyfarm does have some drawbacks. For example, there are fewer portfolio options compered to Nutmeg and, while its fees are competitive, they may be higher than some other robo-advisors.

Nutmeg

Turning to Nutmeg, a range of benefits make it a popular choice. Its diverse portfolio options are a real plus point, letting you select a portfolio that more closely aligns with your investor profile and your values.

It’s fast to set up your portfolio, and offers an extremely simplified investment process. Using low-cost ETFs to construct its portfolios, investment charges are kept low, which maximises your returns.

On the downside, you’ll need a minimum of £500 to get started and, while its automated guidance is excellent, you won’t have access to the same level of personalised human advice that you have at Moneyfarm.

Tips To Get The Most Out Of These Platforms

Whatever your level of investment experience, there are a few ‘rules of engagement’ that will help you get the most out of whichever investment platform you choose.

These tips add up to a range of sensible and sound investment habits, as you develop a strategy that suits you and helps to move you toward your investment goals:

Know Your Risk Tolerance & Goals

Take your time when answering the questionnaires set by Moneyfarm and Nutmeg – and be honest with yourself when doing so! This will ensure that the recommended portfolios align with your long-term investment objectives’ risk profile.

Regularly Review & Adjust Your Portfolio

Over time, your life will change. You might move house, get married, have children, change jobs, receive a pay rise or bonuses, etc.

As your financial situation shifts, it’s crucial to take stock and review your investment strategy so it remains aligned with your evolving investment goals.

Leverage Educational Resources

Don’t ever stop learning! I was employed in the financial markets for around a quarter of a century, and there’s always something new to learn. Use the investment platform’s resources to your full advantage – stay informed about market trends, investment strategies, and how your portfolio is performing.

They say that knowledge is power – when you’re investing, knowledge is profit.

Take Advantage Of Expert Guidance

Moneyfarm provides access to investment consultants, while Nutmeg offers detailed guidance through its platform.

Don’t hesitate to reach out for advice or clarification on your investment strategy – you’ll become more confident in your approach and make better investment decisions.

Monitor Fees & Costs

Both platforms offer low costs, but this doesn’t mean you shouldn’t understand how these affect your investment returns. When you review your portfolio, make sure to also review the cost structure and measure how it might affect your returns going forward.

Stay Diversified

Diversification is key to successful, long-term investing – assets, economies, and industrial sectors rarely move in the same direction.

Maintaining a diverse portfolio in line with your investor profile will help to smooth market shocks, reducing volatility in your investment performance, and making investing less stressful and more successful.

Embrace Pound-Cost Averaging

Invest your money steadily, adding to your portfolio with regular investments. This will help to smooth out volatility in the markets.

Timing the market is not only almost impossible; it’s a pitfall that often leads to poor emotional investment decision-making.

Moneyfarm Vs Nutmeg – The Bottom Line

Both Moneyfarm and Nutmeg are excellent investment platforms. While they both leverage technology to help simplify the investment process as well as optimise your investment strategy to your investor profile, risk tolerance, and investment goals, each platform offers unique advantages, too.

For example, you’ll have access to more personalised investment guidance with Moneyfarm, while Nutmeg stands out for its range of diverse portfolio options and fast set-up.

Both platforms offer robust tools and services to help you achieve your investment objectives. With so little to choose between them, when deciding which is best for you, ensure that you fully consider your individual needs, preferences, and financial goals.

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