Moneysupermarket Launches New Investment Platform for Beginners

Moneysupermarket has launched "Investing by Moneysupermarket," a do-it-yourself investment platform designed for novice investors. The platform provides access to 40 funds and exchange-traded funds (ETFs), including ready-made options like Vanguard LifeStrategy funds and self-directed choices such as funds tracking the S&P 500 index.

The platform offers both a tax-free stocks and shares ISA and a general investment account. Customers can access Investing by Moneysupermarket through its app and will also receive Supersaveclub membership, a loyalty scheme offering cashback and other rewards. The initial three months of investing are effectively free, with monthly platform fees credited to the user's Supersaveclub wallet.

While Moneysupermarket describes its new offering as 'low-cost,' the annual account fee is 0.34 percent. This charge, though small on initial investments, increases as the portfolio grows. For example, a £1,000 pot would incur an annual fee of £3.40. Experts note that other platforms catering to beginners may offer lower costs, with some charging no platform fees at all.

Platforms such as Freetrade, InvestEngine, and Prosper are cited as alternatives that can be more cost-effective for investors, especially as their portfolios expand. Freetrade, for instance, has no platform fees and offers access to Vanguard LifeStrategy funds. InvestEngine focuses on ETFs and also has no platform fees. Prosper further distinguishes itself by refunding underlying management fees on over 30 funds, potentially allowing for zero-cost investing.

AJ Bell Dodl is another app for beginners that offers ETFs and Vanguard LifeStrategy funds, alongside UK and US shares, with a 0.15 percent charge. However, its minimum monthly fee means that Moneysupermarket might be more economical for those with very small portfolios. The break-even point where AJ Bell Dodl becomes cheaper is estimated at an investment value of approximately £3,530.

Lis Barton, chief customer officer at Moneysupermarket, stated that the new platform represents a "major step in our journey to becoming a financial companion for our customers, helping people manage their finances today and take action to grow their money for the future." This launch follows the introduction of "Savings by Moneysupermarket" earlier this year, a savings platform allowing users to compare and manage accounts from multiple banks through a single login.