Investing

All FAQsInvesting

How much can I make if I invest?

The returns on your investments depend on:

  • How long you invest for  
  • How much risk you’re comfortable taking with your investments  
  • How the market performs  

With OpenMoney, all of our portfolios are diversified to avoid high-risk investing. As with all investments, your capital is at risk and you may get back less than you originally invested.

Why should I have a cash safety net before saving for anything else?

A cash safety net supports you with enough money to handle unexpected costs. It could be unemployment, a broken car or poor health. Having 3 months’ worth of expenses as easy-access cash protects you in the short-term, so you can save for the long-term without compromising your wellbeing.

How much does it cost?

At OpenMoney our total charges are 0.50% or less* per year and includes ongoing advice, management of your investments, access to our free money management app and VAT.  

* = our charges as of 20/04/2021

I work in financial services, so I’m not allowed to choose my own assets - are OpenMoney able to provide confirmation that my investment will be managed on a discretionary basis?

Yes, of course! Just get in touch with our web chat team below or send an email to hello@open-money.co.uk.

How often do OpenMoney invest?

We invest 4 times per month. Our Direct Debit collection dates are 1st, 8th, 15th and 22nd; this is when we take the money from your bank account. Once the clearing period ends, we submit buy orders to purchase your investments. You’ll see the purchases and investment value in your portal with four days after the trades have settled.

What does discretionary investment management mean?

It means that we are able to make changes to your portfolio to help keep them in line with your risk appetite. This might mean that we change the amount you have invested in a certain type of asset, such as cash. Or, it could mean that we change a fund in your portfolio for a different one. A reason for this might be because the new fund is cheaper, and so we can keep your fees low.

How do I top up my investment or change my current direct debit payments?

Investment customers can top up their current investments with one-off or monthly payments and edit existing payments in their OpenMoney portal.

To set up a top up payment, log in to your OpenMoney portal and select ‘Manage payments’. Before setting up a new payment, we will ask you to confirm a few financial details to make sure your new payments are suitable and affordable.

To edit an existing payment, log in to your OpenMoney portal, select ‘Manage payments’ and select the pencil icon next to your existing payment to edit. When editing payments, we will advise on whether the payment will take you over your yearly allowance for ISAs or Pensions.

Please remember that it’s your responsibility to make sure you do not pay more than your annual personal allowance into either an ISA or Pension.

Will you recommend that investing is right for me?

We only advise you invest if you are willing to invest for a minimum of 5 years and have sufficient money in accessible cash in case of emergencies. Investing should be seen as a medium – long term commitment and therefore working with these principles should help to ride out any short-term fluctuations in the value of your investment.

Where do OpenMoney invest?

We invest in assets from all over the world! We want our portfolios to be well diversified, which means we like to have shares and bonds in companies and governments from all over the world. This means that if an event impacts one area of the world, for example an election in the US, or natural disaster in Asia, it shouldn’t have a massive impact on your overall investment.

Is my capital at risk even with your lowest risk portfolio?

With any investment, your money (or ‘capital’) is at risk, and this applies to all our portfolios. This means that you could get less money back than you invested, depending on how the investments perform. With our lowest risk portfolio, we hold more of your investment in lower risk assets, which means it has the lowest risk of capital loss of our portfolios.

Can I pick my own investments?

Our investment committee carry our extensive research in maintaining our portfolios. As we offer a managed service, changes can only be made where the investment committee see fit,. Currently our customers are unable to adjust the holdings or ‘pick and choose’ their own investments. As an advised service, we don’t recommend investing to everyone, if we believe investing is right for you then we will advise on which of our portfolios suit your risk profile.

Do you offer an ‘ethical’ investment portfolio?

Our portfolios are invested in several mutual index funds, meaning they track global market indexes like the UK FTSE All Share and the US S&P 500. Currently we are unable to remove specific investments which may be considered unethical from these funds. Whilst this market progresses, our investment committee are keen to explore the low cost sustainable options available for our customers.

Where can I find the past performance for OpenMoney’s portfolios?

The past performance of each of our portfolios can be found in our portfolio factsheets. These contain useful information on the funds we use, the asset allocation and the past performance of each portfolio. If you wish to view these, please get in touch and we will have these sent across to you. Please remember that past performance provides no indication of future performance.

What is diversification?

Investment diversification is key to any investment strategy. The principle suggests that spreading your investment across a wide range of asset types will help manage the overall risk of the investment. If you’re familiar with the phrase ‘don’t put all your eggs in one basket’, this might help you to understand diversification. Our investments are globally diversified so an investor in one of our model portfolios can be invested in over 70 countries and 2,500 companies.

What determines the risk level of a portfolio?

It’s down to the asset allocation; the type and proportion of each asset class. There are several different assets that you can invest in, such as Equities (Shares) and Property, which are considered high risk in comparison to Cash and Bonds. So our low risk portfolio contains a higher proportion of Bonds than Equities, whereas our high risk portfolio has a higher weighting towards Equities than Bonds. The use of different asset classes in a portfolio aims to reduce the overall risk of the investment and provide better returns for our invested customers.

What is a portfolio?

At OpenMoney, when we say ‘portfolio’ we simply mean a collection of investments. These are created and reviewed quarterly by our investment committee. Customers who we believe are in a position to invest, are recommended one of our three model portfolios, each portfolio represents a risk levels; 1 – Low Risk (Cautious), 2 – Moderate Risk (Balanced) and 3 – High Risk (Adventurous).

What are mutual funds?

A mutual fund is a type of financial product that pools investors’ money together to purchase financial assets, such as Equities (Shares) and Bonds. These track the performance of its relative benchmark and requires minimal human intervention from the fund manager. As such, these funds are significantly cheaper than active funds. Our use of mutual funds is the core to our passive investment approach.

What is OpenMoney’s investment approach?

We use a passive investment strategy when managing our portfolios. We invest in passive mutual funds which track market indices; like the UK FTSE All Share and the US S&P 500.  

Passive funds allows exposure to various global markets and are less costly than active funds. In the attempt to outperform their benchmarks, active fund managers levy higher costs to cover increased research and transaction costs. We believe that market performance is impossible to predict, so we don’t make changes in response to political or economical news. We make changes when we believe it is in the customer’s best interests.