Moneyfarm cashback offer
Moneyfarm is offering new customers the opportunity to receive cash back for opening a new account with the firm. The offer is tiered with rebates rising in line with the size of the account.
Clients depositing and investing £5000.00 will get £50.00, whilst those who can deposit and invest £50,000 will earn £400.00 cashback. The offer will run until 23.59 London time on the 30th of April.
The offer only applies to UK and Northern Irish taxpayers who are new Moneyfarm clients and excludes existing Moneyfarm customers, and customers of Wealthsimple, who transferred to Moneyfarm, when Wealthsimple retreated back to Canada, in December last year.
Investment cashback deals
Moneyfarm has decided to offer cashback deals to try and entice new customers to join the service. The idea of cashback is nothing new, though it’s not that common in financial services anymore, especially since the FCA and ESMA banned the use of cash incentives and bonuses as a way to attract clients into leverage trading.
That said some banks will pay a cash bounty to customers who transfer their current accounts.
In essence, its marketing ploy, financial services firms spend large sums on customer acquisition a 2020 study found that in the US the cost of acquiring a new wealth management client can run to more than $3000 or £2200.
That spending would be on an affluent or high net worth individual by a full-service wealth manager. For digital wealth managers such as Moneyfarm, the cost of acquiring a client is likely to be a fraction of that amount. Nonetheless, marketing and retention spending are some of the biggest costs that financial services providers face.
Paying £400.00 to secure a £50,000 account makes commercial sense, after all, it represents just 0.80% of the account value.
Moneyfarm charges 0.60% per annum on accounts that are worth £10,001 to £50,000 (note that you also pay 0.75% on the first £10,000) so it is effectively waving just under 1.3 years’ worth of management fees, to secure the account.
Moneyfarm clients will also pay a spread or commission on the funds in which their money is invested, and Moneyfarm earns some revenue from that, as well.
If you were considering opening an account and investing with Moneyfarm already, then the cashback offer may help you to make up your mind, however, it’s not a reason to invest money or open an account in its own right.