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Robo-adviser Moneyfarm launches Sipp

Moneyfarm has become one of the first robo-advisers to launch a pension wrapper.

The Moneyfarm pension has a tiered fee system, ranging from 1 per cent for the first £10,000 invested and reducing to 0.72 per cent for £2.5m and over.

Fund costs are fixed at 0.3 per cent.

The pension can sit alongside an existing Moneyfarm stocks and shares Isa and general investment account.

Management fees could decrease if a customer invests though a pension, Isa or GIA at the company.

Fees are taken at an account level rather than through an annual pension charge and look at the total amount invested across all Moneyfarm portfolios.

Moneyfarm did not reveal the investment mix or where the funds might go. The Sipp is offered on a non-advised basis.

The Italian firm says customers will be able to set the retirement date and the portfolio asset allocation will adjust to ensure suitability right up until investors are ready to drawdown.

Moneyfarm also takes on the up-front cost of basic rate income tax relief for its investors to avoid a delay in customers receiving tax relief from HMRC.

Moneyfarm chief executive and co-founder Giovanni Daprà says: “By asking customers to set a date for their retirement, we can provide more personalised automated financial advice through our digital platform and encourage future planning and money mindfulness as part of everyday life.”

Managing director at Chelsea Financial Services Darius McDermott says the Sipp is not priced very competitively.

He says: “The charging structure looks quite expensive at 1 per cent for a non-advised offering.

“The non-advised market is broadly growing, but I don’t know how people will feel about feel about having a robo-option for their stocks and shares – they could find it a little confusing.”

Finance & Technology Research Centre director Ian McKenna says: “The initial round of robo propositions tended to focus on investment rather than pension wrappers. It is good to see this now being expanded to allow consumers to use a wider range of savings vehicles.”

In July, BlackRock-backed robo-advice firm Scalable Capital said it was preparing to launch a white-labelled Sipp offering. Fund giant Vanguard also said it has plans to launch a Sipp in 2018 for its new direct to consumer platform.

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