Multi-asset trading platform eToro has entered the UK ISA market in a collaboration with online wealth manager Moneyfarm. eToro’s UK clients will now be able to open a stocks and shares ISA, with Moneyfarm via the eToro platform.
Unlike many other ISA offerings, the eToro and Moneyfarm product will be a discretionarily managed ISA. Meaning that you put your money into the ISA account, but it’s the experts at Moneyfarm that will allocate and manage the investment on your behalf.
What is an eToro ISA?
ISAs, or Individual Savings Accounts, are tax-free savings vehicles in which UK clients can invest up to £20,000 per annum, under current legislation.
- Need an investment ISA? – Compare the best stocks and shares ISAs
Any capital growth or income generated within the ISA portfolio is exempt from capital gains or income tax.
Moneyfarm offers a range of globally diversified discretionary portfolios, each of which is risk rated. Which, according to the wealth manager, means that customers are matched with the correct investments.
Dan Moczulski, eToro’s UK Managing Director, told us exclusively:
Despite being a global business, we want to take a local approach to the markets that we operate in, rather than working on a one size fits all basis.
In the UK, this means offering financial products that will help our UK clients to have a more complete investing experience. The stocks and shares ISA will help eToro clients to shield a portion of their investment returns in a tax-free wrapper, something which is more important than ever given upcoming CGT changes. We plan to continue developing this offering in the coming months.
- Want to know more? – Read our interview with UK MD Dan Moczulski
Why has eToro launched an ISA offering?
This is the first project in what’s hoped will be a closer working relationship between the two companies. eToro will look to expand its ISA offering, most likely in conjunction with Moneyfarm.
Daniel Giddings, Moneyfarm’s UK head of business development, said the firms would:
“closely integrate the (ISA) propositions over time”
eToro has more than 3.0 million registered users in the UK and will be hoping to entice them into opening an ISA account through the new venture.
The firm hasn’t disclosed the charges for its new service. However, Moneyfarm has a sliding scale of fees based on the amount of money invested.
For example, those with between £500 and £10,000 in a stocks and shares ISA, pay 0.75% per annum.
Whilst those with between £10,000 and £20,000 pay 0.65% a year, and if your portfolio grows in value your fees can diminish further.
eToro and Moneyfarm have taken a novel approach to ISA investing, one that will differentiate them from the competition.
eToro clients are likely very familiar with social trading and following other people’s trading and investment ideas, so buying into a discretionary ISA may not be that much of a leap for them.