Vanguard vs Moneyfarm: 2024 Comparison

Are you a budding investor in the UK looking for a beginner-friendly broker and confused about whether to choose Vanguard or Moneyfarm for your investing needs? 

Perhaps you’ve heard about Vanguard thanks to its status as the second-largest asset management firm in the world, with a 48-year history and 50 million customers on its books. Maybe Moneyfarm has come across your radar due to its range of ETF-based portfolios designed around your risk tolerance and free access to your own investment consultant. You might even be familiar with both and torn between the two!

Well, you’re in luck. In this side-by-side comparison, we analyse Vanguard vs Moneyfarm to enhance your understanding of how these platforms compare regarding their important features and help you to make a better-informed decision about the best broker for you.

Below, you’ll find the pros and cons of each broker, as well as a comparison table that features the different fees charged, the financial instruments supported, the regulation, and more. Keep reading!

Vanguard vs Moneyfarm in a nutshell

To summarise, here’s our verdict: 

Broker	Best for…
Vanguard	Do-it-yourself approach: invest in low-cost, diversified funds and ETFs
Moneyfarm	Beginner investors who prefer a hands-off approach with actively managed portfolios and free access to an investment consultant

The main difference between Vanguard and Moneyfarm is that Vanguard only allows you to buy and sell investments like ETFs (you have to decide where to invest), while Moneyfarm is a digital wealth management service, also called robo-advisor, which means that Moneyfarm will automatically create and manage an investment portfolio for you.

Vanguard has lower fees, but Moneyfarm has a mobile app (Vanguard doesn’t), and picks investments based on your risk appetite. 

Neither will be suitable for investors who wish to invest in individual stocks and shares (you’ll need a stock trading broker for that).

All in all, Moneyfarm is best for beginner investors who prefer a hands-off approach with actively managed portfolios and free access to an investment consultant.

Vanguard is best for investors who want to invest in low-cost, diversified funds and ETFs.

Vanguard vs Moneyfarm: side-by-side comparison

Broker	Vanguard	Moneyfarm
Founded in	1975	2011
Demo account	X	✓
Stocks and Shares ISA	✓	✓
Minimum deposit	£500 (or £100 per month)	£500
Mobile app	X	✓
Interest on uninvested GBP cash (annually)	2.6% (managed rate)	0%
Individual Stocks	X	X
ETFs	✓	✓ (*within their portfolios)
Individual Bonds	X	X
Funds	✓	X
Options	X	X
Futures	X	X
CFDs	X	X
Leverage Products	X	X
Forex	X	X
Cryptocurrencies	X	X
Commodities	X	X
Account Fee	0.15% per annum of the value of your account holdings, including cash, up to £250,000, with a maximum annual charge of £375.	Between 0.35% and 0.75% per annum for actively managed portfolios Between 0.25% and 0.45% per annum for fixed allocation portfolios
Funds / ETFs	0.2% per annum on average for ongoing costs	0.2% on average for the underlying fund costs
Transaction fees	Between 0.01% to 0.86%	0.1% on average
Inactivity fees	£0	£0
Withdrawal fees	£0	£0
Regulator in the UK	FCA	FCA
Investor Compensation Scheme  (per person, per institution)	Up to £85,000 (assets + cash)	Up to £85,000 (assets + cash)

Vanguard: In a nutshell

Vanguard is a well-established broker with an excellent range of diversified funds and ETFs for investors who are happy to confine themselves to Vanguard products. Renowned for its low fees and easy-to-use website, Vanguard could be a great choice for a beginner or intermediate investor. Unfortunately, however, Vanguard currently does not offer a mobile app in the UK. 

As well as providing the option to invest in ETFs that track major stock market indices like the S&P 500 and FTSE 100, Vanguard also offers ready-made portfolios. These include its popular LifeStrategy series and Target Retirement Funds. In addition, Vanguard provides a Managed ISA service if you’re an investor who would prefer to have an expert pick investments on your behalf. 

Overall, Vanguard could be a good choice if you value an established brand and are looking for an easy, low-cost way to build a diversified investment portfolio. It’s worth taking a closer look at Vanguard’s full list of products to get a better idea of whether this broker might be suitable for you.

Vanguard has a 4.1 out of 5 rating on Trustpilot. 

Vanguard: Pros and Cons

Pros	Cons
✓ Longstanding reputation and history	X You can only invest in Vanguard products
✓ Competitive fees, especially for smaller portfolios	X You can’t buy individual stocks or bonds
✓ Good range of ready-made portfolios	X No mobile app in the UK
✓ You can choose from over 85 funds	X £500 minimum investment (or £100 per month)
✓ Interest on cash	X Limited website interface and charting tools
✓ Simple, easy-to-use website	X £7.50 fee per trade to buy ETFs at the market price
✓ Good product range: Stocks and Shares ISA, Junior ISA, General Investment Account and Self-Invested Personal Pension (SIPP)
✓ Good range of ESG funds
✓ A good option for investors who want to invest in diversified funds
✓ Owned by its customers
✓ Managed ISA service

Moneyfarm: In a nutshell

Moneyfarm is a younger broker than Vanguard, but it still has a track record of managing investors’ portfolios for over a decade. Moneyfarm offers four different ways for you to invest, including: active management, ESG, thematic investing, and fixed allocation portfolios. Moneyfarm’s actively managed portfolios are given risk ratings from 1 to 7, designed to fit around your investor profile.

Moneyfarm won’t be suitable for investors who prefer to take a more hands-on, DIY approach to their portfolios, since the broker doesn’t allow you to invest in individual stocks, funds, or bonds. However, for beginner investors who are seeking free guidance from an investment consultant, Moneyfarm could be a great choice since this is part of their offering.

Overall, Moneyfarm might be an attractive option if you are looking for actively managed, diversified, ETF-based portfolios. It’s worth taking a closer look at how Moneyfarm invests your money to get a better idea of whether this broker can meet your investment needs. 

Moneyfarm has a 3.8 out of 5 rating on Trustpilot. 

Moneyfarm: Pros and Cons

Pros	Cons
✓ Range of 7 ETF-based portfolios matched to your risk tolerance	X You can’t buy individual stocks or bonds
✓ A good option for beginner investors who want to take a hands-off approach	X No interest on cash
✓ Free access to an investment consultant for guidance	X £500 minimum investment
✓ Good product range: Stocks and Shares ISA, Junior ISA, General Investment Account and Self-Invested Personal Pension (SIPP)	X Limited investment selection
✓ Mobile app	X Higher fees for actively managed portfolios
✓ Good range of ESG portfolios
✓ Lower fees for fixed allocation portfolios
✓ Easy-to-use website

Conclusion: Comparison verdict

To summarise, here’s our verdict: 

Vanguard	Best for a do-it-yourself approach: invest in low-cost, diversified funds and ETFs
Moneyfarm	Best for beginner investors who prefer a hands-off approach with actively managed portfolios and free access to an investment consultant

Choosing between these two online brokers won’t necessarily be easy and much will depend upon your own investment goals and objectives. Neither will be suitable for investors who wish to invest in individual stocks and shares, but if you prefer to invest in ETFs then Vanguard and Moneyfarm have plenty to offer. Plus, Vanguard offers funds too. 

Do you want a wide range of funds and ETFs to choose from? How about access to a free investment consultant? How important do you consider a mobile app is for you to keep track of your investments? Only you can answer these questions! 

So, feel free to explore the comparison tables above, as well as the brokers’ own websites, and decide which would be the most suitable one for you.