Moneyfarm vs Nutmeg - title picture of the comparison article

Moneyfarm vs Nutmeg – The Battle of the Robo Advisors

Looking to invest to reach your financial goals? Fortunately investing nowadays is much more accessible than it was in the past. Plenty of investment platforms and apps are available that aim to simplify long-term investing in the stock market. Creating a globally diversified investment portfolio is now no longer only available for the rich and wealthy.

The two services in our head to head will help you build a globally diversified portfolio, but which one is best?

Find out in our Moneyfarm vs Nutmeg head to head.

Quick Summary

Moneyfarm*: best for those looking for an actively managed portfolio and investing between £10,000 to £100,000

Nutmeg: best for investors who want the accessibility of a robo advisor, a wider choice of funds or are looking to invest in a Lifetime ISA

Moneyfarm

Pros

  • Risk appetite questionnaire
  • Lower fees (between £10k and £100k)
  • Ethical investment portfolios

Cons

  • No fixed allocation portfolio
  • £500 minimum investment

Nutmeg

Pros

  • Lifetime ISA availability
  • Wide range of portfolios
  • Ethical investment portfolios

Cons

  • Not the lowest fees on the market
  • £500 minimum investment (excl LISA)

The head to head: Moneyfarm vs Nutmeg

How we assess the head to head:

In order to make an easy comparison between the two platforms, we’ve focused on the most important features:

  • Range of investments available
  • Ethical investing
  • Range of accounts available
  • Fees
  • Existing customer reviews
  • Minimum deposit requirements
  • Withdrawal restrictions
  • Platforms available
  • FSCS protection

Before we start, it is worth saying that nothing in this article should be seen as financial advice. With all investing, your capital is at risk. Even though we regularly update our content, please do your own research before investing. If you require financial advice, you can search for a regulated and qualified financial advisor via the Personal Finance Society.

*Any links with an asterisk may be affiliate links. Even though we may receive a payment if you use this link to sign up for the service, it does not influence our editorial content and we remain independent. The views expressed are based on our own experience and independent analysis of the service.

Round 1: Investments available

Both of these platforms are designed for long-term investors, and as such offer a range of funds or investment plans based on your risk appetite. As a result, you won’t be able to buy individual stocks or shares via these platforms.

Moneyfarm offers 7 globally diversified portfolios consisting of mainly low-cost exchange traded funds (ETFs). These portfolios are suited to different levels of risk appetite. The higher levels contain a higher stock allocation (>85%), which are generally more volatile than the likes of bonds (which are basically IOUs for companies). The lower levels contain a higher proportion of bonds (which are generally less volatile).

It’s worth calling out that Moneyfarm is also regulated to offer investment advice. At the beginning of your journey with Moneyfarm, they ask a range of questions aimed at understanding your financial goals, risk appetite and current experience of investing, all with the purpose of recommending the most suitable portfolio for you.

excerpt of moneyfarm's investor questionnaire
Screenshot of one page of Moneyfarm’s investor questionnaire

Not only that, but you will also get access to your own dedicated investment consultant who can help with any questions you may have.

The Moneyfarm portfolios are actively managed, which mean the investment team monitor your portfolio and rebalance where needed.

Nutmeg have a range of portfolios based on 1) your risk appetite and 2) the investment style you want. They summarise these as their “investment styles”. Within each style, you can select a risk level for your portfolio. This essentially influences your asset allocation, with generally a higher risk portfolio investing more into the equity asset class (stocks and shares), with less of a weighting towards bonds.

  • Fixed allocation. You can choose one of 5 risk levels to match your risk appetite, and is the Nutmeg offering of a passive investment. This is where they don’t try to actively manage the fund or guess the market, instead, they stick to a fixed allocation between stocks, bonds and other asset classes (i.e more stocks = higher up the risk scale due to volatility). Due to the lack of active management, these offer lower fees than Nutmeg’s alternatives.
  • Fully managed. This is an actively managed portfolio (where investment experts proactively manage the fund). For this “style”, you can choose one of 10 risk levels.
  • Socially responsible. A fully managed portfolio with an “ESG focus”. These are actively managed and monitored portfolios. Just like Moneyfarm, Nutmeg uses data from MSCI to help monitor companies within their portfolio for performance against a set of ESG metrics. A similar drawback to Moneyfarm though is that even though you have visibility of the ETFs you’re invested in, there isn’t an easy way to find a listing of all of the individual companies. So if you’re looking for full control, neither of these solutions are right for you and I would look at alternatives like Hargreaves Lansdown or Freetrade.
  • Smart alpha. These are also fully managed global portfolios, but also utilise the knowledge of the JP Morgan Asset Management team.

I haven’t pulled out the figures for past performance of investment growth, as past performance is not a reliable indicator of future performance. If you would like this, you can find it on both of their websites for their various portfolios.

Winner: Nutmeg. Due to offering a fixed allocation portfolio alongside its fully managed portfolios.

Round 2: Ethical investing

Moneyfarm offers a socially responsible version of each of its “standard” investment portfolios. These are constructed using data from MSCI which is a leading global research firm focusing on environment, social and governance practices, known generally as “ESG”.

The funds that are used in these socially responsible portfolios are selected (and then monitored) based on things such as:

  • companies’ voting policies (i.e its governance structure)
  • involvement in social controversies
  • future exposure to ESG-related risks

As well as using the data from MSCI, Moneyfarm has its own set of screening. For example, eliminating all companies which do not operate, at a minimum, in ways that meet their fundamental responsibilities in areas such as labour, human rights, anti-corruption and the environment (as laid out in the United Nations Global Compact).

These are actively managed portfolios and so they are monitored on an ongoing basis to ensure compliance with their ESG parameters.

However, if you’re looking to know exactly which companies make up your investments you’ll be hard-pressed. If you are looking for that level of detail of your investments, then you may need to look into alternative options such as building your own portfolio using a DIY investment platform like Hargreaves Lansdown. If you’re looking for the convenience of a robo advisor, then there is a level of loss of control you’ll need to accept.

Nutmeg also offers a set of socially responsible portfolios, using data from MSCI to monitor and manage the performance of the portfolio.

They’ve explicitly called out some industries/activities they exclude in their funds for any companies which are involved in:

  • have significant exposure to the tobacco industry
  • production of nuclear weapons
  • the production of “controversial weapons such as landmines, cluster bombs, or chemical and biological weapons”
  • alcohol production
  • adult entertainment
  • significant involvement in the gambling industry
  • and others such as nuclear power, genetic modification and civilian firearms industry.

Nutmeg has published a whitepaper that gives you more details on their socially responsible portfolios. So if this is an area you’re keen to invest in, I would highly recommend giving it a read.

Another more critical read on ethical investing is this explosive 3-part blog post from an ex-chief investment officer of Blackrock (the world’s largest asset manager). He provides a useful criticism of the effectiveness of the industry’s offerings and its ability to actually affect positive change. It’s a bit of a long read, but I highly recommend it.

Winner: Draw. Both offer socially responsible portfolios, but you have little control on the composition of these as they are managed for you.

Round 3: Accounts available

Moneyfarm have the following accounts available to open:

  • General Investment Account
  • Stocks and Shares ISA
  • Personal Pension

Nutmeg offer the following accounts:

  • General Investment Account
  • Stocks and Shares ISA
  • Stocks and Shares Lifetime ISA
  • Junior ISA
  • Personal Pension

A Lifetime ISA provides a 25% government bonus on deposits up to the limit of £4,000 per year, however, there are restrictions on what/how you can withdraw. Typically you can only withdraw the money (without incurring penalties) if you are buying your first property or are retiring.

Winner: Nutmeg as they also have lifetime ISA availability

Round 4: Fees

Moneyfarm has a tiered pricing structure, made up of two components. 1 is the management fee on the investment amount, and then there is a fund fee relating to the underlying funds/investments.

The management fee reduces the higher the investment, in tiers as below:

  • From £500 – £10,000: 0.75%
  • £10,001 – £50,000: 0.6%
  • £50,001 – £100,000: 0.5%
  • £100,001+: 0.35%

But the fee on the underlying investments remains flat at 0.29%.

This means that if you had invested £10,000, you would be charged an annual fee of 0.75% for the platform fee and up to 0.29% for the underlying fund charges, for a total of 1.04%.

With Nutmeg, the fees charged depends on the style picked (i.e fully managed or fixed allocation).

The management fee reduces once you have over £100k invested, but for ease of comparison I’ll compare the fees assuming you invest £10,000.

If you had invested in:

  • Fully managed: 1.03% (0.75% management fee with the rest from the underlying fund charge and market spread)
  • Smart alpha: 1% (0.75% management fee with the rest from fund costs and market spread)
  • Socially responsible: 1.09% (0.75% management fee with the rest from fund costs and market spread)
  • Fixed allocation: 0.71% (0.45% management fee with the rest from fund costs and market spread)

Winner: Draw. Even though Nutmeg has the much cheaper fixed allocation portfolios, for the actively managed portfolios Moneyfarm has cheaper socially responsible portfolios, and even though at the £10,000 investment level is slightly more expensive than Nutmeg, this will reduce once you go over the £10k investment mark as Moneyfarm drops to 0.6% for that bracket.

Round 5: Existing customer reviews

Moneyfarm have an average 4.7/5 on Trustpilot from 655 reviews at the time of writing. Positive reviews discuss things such as the professional design of the platform, and that it feels like you have your own financial advisor (due to the questionnaires and on-hand investment expert). The poorer reviews mainly revolve around investment performance, but there are also some complaints around slow handling of withdrawals and transfers, which is something to bear in mind.

Nutmeg have an average 4.4/5 on Trustpilot from 1.1k reviews at the time of writing. Positive reviews discuss the design and ease of use of the platform, as well as a few call outs for specific customer service agents. On the negative side, they revolve around the theme of slow withdrawals and issues with transfers in/out (such as slow transfer out to a new provider) and a few comments around poor customer support.

Winner: Moneyfarm. Higher rating although bear in mind fewer reviews, both had similar themes in the review comments.

Round 6: Minimum deposit requirements

Moneyfarm requires a minimum investment of £500.

With Nutmeg, you can start investing from £100 in a Lifetime ISA or £500 for General Investment Accounts, Stocks & Shares ISA or Personal Pension.

Winner: Draw. Even though you can invest with a lower starting on the Lifetime ISA with Nutmeg, the comparable GIA/S&S accounts have the same minimum investment amount between the two.

Round 7: Withdrawal restrictions

For Moneyfarm, there are no restrictions on the accounts (other than the standard Pension restrictions where you cannot withdraw until you are 55). Withdrawals take up to 7 working days, and there are no fees or penalties.

Similarly, with Nutmeg, you can withdraw from your GIA and Stocks & Shares ISA whenever without any penalties or charges. The pension and Junior ISA you can only withdraw at maturity (i.e Junior ISA when the child turns 18 and for the Personal Pension when you turn 55).

The Lifetime ISA has restrictions on its usage from the government, explained by Nutmeg here. If you’re using your money as a deposit for your first time property purchase or when you’re 60+ (or if terminally ill), then there are no penalties. However, for any other reason then there is a government imposed penalty of 25%. So if you’re not going to use your money for either of those purposes (first time house deposit or retirement), you may be better off in another product such as a standard Stocks & Shares ISA.

Winner: Draw.

Round 8: Platforms available

Moneyfarm has a web app (so you can access via your browser), as well as a Moneyfarm app on iOS and Android.

Nutmeg also has a web app that you can access on your browser, as well as an iOS and Android app.

Winner: Draw

Round 9: FSCS Protection

Moneyfarm is covered by FSCS protection up to the first £85,000 are covered by the UK deposit guarantee scheme.

Nutmeg is also covered by FSCS protection (so up to the first £85,000 is covered).

Winner: Draw

Conclusion: Moneyfarm vs Nutmeg

Both of these robo advisors offer an impressive service, with a level of active management and beautiful portals with which to manage your investments.

When it comes to their actively managed funds, it is hard to tell them apart on most dimensions. They have similar reviews, they have similarly beautifully designed customer experiences and dashboards, they have similar minimum investment amounts. There are a few areas of difference though. Nutmeg has a longer trading history and is backed by JP Morgan (this may or may not be a benefit for you), as well as the fact Nutmeg offers a Lifetime ISA. Moneyfarm offer an on-hand investment consultant to help guide you, as well as help with finding your risk appetite via their onboarding questionnaire.

However, if you’re looking for an actively managed fund, and are investing between £10,000 and £100,000, you’ll find cheaper fees at Moneyfarm*. Under £10,000 and Nutmeg is cheaper.

If you’re looking to invest in a passively managed portfolio (i.e it just tracks the underlying assets without proactive intervention), only Nutmeg offer a fixed allocation portfolio out of the two.

What I would say though is if you are looking for a fixed allocation portfolio, there are some seriously cheaper options on the market than Nutmeg.

Take a look at Vanguard. Or build your own ETF portfolio using an app like Freetrade.

Both of these will need a little more experience and understanding to build, compared to the beginner’s appeal of a service like Nutmeg, but you will be rewarded with lower fees that can make a handsome difference over a lifetime of investing.

Alternatives to Nutmeg and Moneyfarm

Looking for alternatives to Nutmeg and Moneyfarm? Well, you’re in luck as there are lots of alternatives. Worth pointing out that for more experienced investors who know what they want to invest in, or are happy managing their own investments, there are alternatives that have much cheaper fees than Moneyfarm and Nutmeg.

If you’re new to investing, check out our round-up of the best investing apps for beginners here.

For other UK investors, try:

Have you used either of these services, Moneyfarm and Nutmeg? I’d love to hear your opinion on who wins in the head to head; Moneyfarm vs Nutmeg in the comments below.

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