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In recent years there has been a proliferation of robo advisor firms popping up offering investment services to clients in the United Kingdom. One of these firms that has opened for business recently is Munnypot.
Established in early 2017, Munnypot was started by three individuals with extensive experience in finance, fund management and financial advice. Tired of the traditional, and expensive, investment management business they created Munnypot to provide the 'forgotten-majority’ with quality, well researched advice that has not been accessible to the majority of UK residents in the past.
Munnypot features one the nicest interfaces available to customer both with respect to the sign-up process as well as the ongoing monitoring. In addition to these benefits, here are the quick facts about Munnypot that you need to be aware of.
The trouble with most traditional investment management firms is that it takes a large minimum investment to get professional level advice. For example, many investment advisors require £50,000 to even get started.
Munnypot makes professional level advice way more accessible by requiring only a £250 minimum initial investment, or simply by setting up a £25 per month automatic investment plan. This low hurdle to use their services is one of the key factors the founders insisted on to make sure good investment advice was available for the ‘forgotten majority’ of U.K. investors.
Munnypot’s Portfolio and Asset Allocation Details
Munnypot uses Vanguard’s Life Strategy funds to invest client’s money. Depending on the risk profile and time horizon of the investor, a Life Strategy fund is chosen for the client and their investment dollars are placed into that fund.
Each of these portfolios include asset allocation, broad diversification and automatic rebalancing, which carefully balances risk, return and cost for the client.
Here is a snapshot of the various funds offered by Munnypot with details on the breakdown between equities and bonds, as well as the risk profile.
Through Munnypot’s questionnaire that is provided when client’s set up their accounts, the right fund will be chosen for them.
Munnypot has one of the more complicated fee structures in the robo advisor industry. They are still low, however they are different from most other firm’s simple percentage of asset under management model. Instead, Munnypot charges clients an initial sign up fee, followed by an ongoing monthly maintenance fee to continuing monitoring the account. Here is the table from the Munnypot website explaining these fees:
As you can see, depending on the amount invested with Munnypot, there is a one-time set-up fee and a monthly monitoring fee required to use their service.
Munnypot offers one of the widest selection of account types available for investors. In addition to a General Investment Account (GIA), clients can sign up for:
• Stock and Shares Individual Savings Account
• Junior Individual Savings Account
Unfortunately, at this time they do not offer a Self-Invested Personal Pension (SIPP), however they are looking into providing this option in the future.
Munnypot is easy to get started with. Unlike traditional investment firms, the process is done completely online and can usually be done in one sitting. Here are the steps required to get going:
1. Using the 'WhatsApp' style chat, clients select their investment goal.
2. Clients then select their risk level so Munnypot can choose the most suitable Vanguard fund for them. A clear benefit to investors is that Munnypot will contribute to the Individual Savings Plan first is there is contribution room available to that tax relief is maximized.
3. Clients then review the personal suitability report, which contains the important information needed before proceeding with the investment plan.
4. If comfortable with the asset allocation and portfolio suggested, clients then start investing with as little as £25 monthly and/or £250 single payment or by transferring in an existing ISA.
5. Clients can then review the account anytime, 24 hours per day, 7 days a week.
Finally, the investment funds are held with SEI who acts as the custodian, ensuring the funds are safe regulated by the governmental bodies to ensure all the required protections are in place.
If you are looking for a robo advisor, especially one that uses Vanguard as the chosen investment platform, then Munnypot is a good option.