Vanguard is a bit of an outlier with their very low 0.15% platform fees (perhaps something to do with their huge size and only offering in-house funds). I don’t think there’s another platform with percentage based fees lower than 0.25%?
Having said that Monzo’s 0.45% platform fee is a bit high (it’s a HL level fee without HL level choice or service). I’m a bit surprised Monzo haven’t gone with a platform fee somewhere in the middle (0.25 to 0.35%).
Also, in terms of benchmarking, I think Monzo have looked to undercut and/or better in terms of simplicity/convenience the long-standing robo-advisors Moneybox and Nutmeg by JPM (which are the leaders in their spaces). Makes sense to me, however I agree the fee is too high for some but they wouldn’t be the target market.
According to Monevator’s platform comparison table, Dodl charges a fixed price trading fee (£1.50 per trade on funds) on top of the percentage fee. If true, would not be as cheap as Vanguard and would add meaningful cost for those with small portfolios. However, I don’t see a trading fee mentioned on Dodl’s charges page. Do they charge a trading fee?
No tradings fees whatsoever on Dodl, so Monevator is wrong.
There’s an FX fee of 0.75% on US stocks which is the only additional charge beyond the 0.15% platform fee (min £1 per month).
I’ve been using Dodl by AJ Bell since it’s inception so can be trusted on this aha
Personally I don’t think the fee is that bad. But I do think it’s a very clever way of getting customers to consider plus or premium if they’re wanting to do the investment piece as it should save money or even pay for itself (a reduced fee of 0.35% plus the fund fee is a pretty competitive way to get exposure to the markets I’d have thought).
It will be interesting to see whether the new cashback functionality also comes behind the paywall - some people seem to be getting some really valuable cashback in that thread, so again, could pay for itself and then some - and if Monzo are managing to get third party deal providers to provide the bulk of the funding for the offers, again, another great way of encouraging plus/premium take up (and pure margin for Monzo).
These kind of things can spark a real flywheel of increasing use/engagement across the app, which is exciting to see!
Agreed on the fee not being that bad. 0.45% platform fee matches Moneybox’s 0.45% platform fee while undercutting them by not having a £1/month fee minimum. The cheapest platform fee for Nutmeg is 0.7% so compares well.
The flywheel aspect is a possibility but only for a small subset of users imho.
The fee is high for those who are a bit more price sensitive and are willing to shop around for more choice (both in terms of platforms and available securities); but for the mass market this product is perfectly fine for getting more people’s money invested which is a great thing.
Is it possible to see the investment within Black Rock app?
I think my point is that it doesn’t have to attract Monzo’s whole user base to be a dramatic benefit.
Consider that at the last annual report they had maybe 350k plus/premium subscribers (which loosely translated to 5ish% if I recall).
Jonas previously said (can’t rememember where…) that if they could attract 10% of Monzo customers to plus/premium, that would be a really good result.
These new products could not only drive more plus/premium sign ups, but also make customers stickier or more ‘full Monzo’ type customers, which would have knock-on benefits to increasing their spending and balances held on account.
Monzo having about 10m customers isn’t that far away, and the idea of them garnering 1m plus/premium customers doesn’t seem that unattainable given all these developments.
With account closures seemingly more common… what happens to your Monzo Investments if this was to happen?
I would be interested to know would the funds in the ISA keep their ISA wrapper? this is quite important as after 10 years you would have built up a good amount of funds in this wrapper
More common than what?
All banks close accounts when terms are breached or high risk/apparent fraud has occurred.
The desperation for money given the cost of living has risen, therefore people will claim fraud transactions or do things they think are innocent for personal gain.
The banks pick this up and exit customers, it’s always something the customer has done, to result in a closure.
Be curious to know this though, has the app developed in a way that not having a current account, could mean you keep Flex or Investments active on the app?
Or would it be force closure and you take the loss as consequence?
I had my account closed by Natwest, it was my second account and used for shopping at super markets only, this was before I budgeted with Monzo pots.
The only thing that was different was I sold my car privately and received about £15,000 into the account. About a week later the account was closed and I was treated like a criminal from Natwest.
I would be interested what would happen to my ISA funds if Monzo decided to do the same
The terms related to investment account says that when Monzo or the service partner close your account they give you 60 days notice and then will sell all investments and return the money to you.
As they give notice that’s the same as them closing any other account as in they give you time to organise an alternative account elsewhere. Given that transfer is the only way you can keep the wrapper, you’d have to request a transfer in via another provider pretty sharpish.
Actually, re-reading the terms, an account can be closed immediately if you don’t have a Monzo account or you’ve done any of the things which mean they can close your current account… so that would seem to be an unequivocal no to transfer out in those scenarios. Which to be fair, I wouldn’t expect them to offer - and the terms on my past Virgin ISA suggest the same is true elsewhere
I haven’t looked into Monzo’s investment offering in detail, as it’s too expensive to begin with. However, often these funds will have their charges hidden, as they are essentially fund of funds. So Blackrock might only charge 0.15% or whatever to the customer, but the funds they are investing in (some of which could be Blackrock), could be charging the main fund (and therefore the customer). Not sure if this the case here or not though.
Also, ashamed to admit, but I used to work for Blackrock and I can assure you they use every trick in the book.
Hi @andys
The scaling on my investment chart has gone wonky. Looks like the y-axis is not in scale with the data points being displayed…
Sadly, that is my understanding of how funds which invest in other funds usually work.
The platform fee Monzo charge is separate from any fund manager charges.
Yup, that’s both my understanding, and my experience with other similar products too.
Extremely unlikely that there would be uncapped fund charges over and above what’s stated to pay for the fund of funds.
More likely is any underlying funds fees are paid from the overall fund fee which Monzo state.
