Moneyfarm Pursues Growth While Navigating Robo Regulation

Moneyfarm continues to find its footing in the UK, Germany, and Italy. The company now serves more than 27,000 active investors and has £400 million under management.

We can expect Moneyfarm to experience another period of growth thanks to locking down its Series C funding. Led by Poste Italiane (the retail banking branch of Italy’s post office), Moneyfarm has secured €40 million. This is good news for the company, which has high hopes of striking a bigger deal with Poste Italiane.

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An arrangement with Poste Italiane would give Moneyfarm access to all of Poste Italiane’s customers, broadening its footprint inside the country. The company’s latest funding round comes only a year after its Series B.

Another Moneyfarm partner, Allianz Asset Management led the last round, amounting to £40 million and participated in the Series C round. The relationship with Allianz enabled the company to strike a promising partnership deal to operate in Germany.

Unlike traditional wealth management firms, Moneyfarm is a roboadvisor. This means that there is a reduced amount of human contact, with algorithms guiding investment advice. Clients can still reach out to Moneyfarm’s human advisors to get explanations of the guidance they’ve been provided.

The benefit of choosing a roboadvisor is typically lower fees, which in turn can lead to higher yields. According to a report in the Financial Times from November 2018, one-third of investors are opting for a roboadvisor over traditional wealth management.

Moneyfarm offers three types of investment options: individual savings accounts (an investment type created by the UK government), pension accounts, and general investment accounts.

While the company seems poised for growth thanks to Poste Italiane, regulator threats could mute the company’s growth. So far, Moneyfarm has managed to stay on the right side of regulators, but as with any new technology, a change in policy may force a drastic change in availability.