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With MeManaged, MeDirect claims to make investing as simple as saving money. Choose a portfolio, deposit €5,000, and their experts will manage your investments for you. No need to worry about picking stocks or rebalancing your portfolio.
But MeManaged has limitations that could affect your returns. Their 1.3% annual fee is higher than alternatives, and they only work with funds from one provider: BlackRock.
Let's take a detailed look at what you get with MeManaged, its pros and cons, and whether it's right for your investment goals. We'll also see how it compares to similar offerings in Belgium.
Pros and cons of MeDirect MeManaged
Read on to get the full low-down of MeDirect MeManaged.
The story of MeManaged
MeDirect was originally started back in 2004 and operated under the name "Mediterrean Bank". The current form of MeDirect was created in 2013 and initially offered a new type of savings account specifically for Belgians.
They have around 80,000 clients and more than 3 billion euros under management. You can do basic investing through ETFs, funds and bonds using their brokerage service but they also launched their own "discretionary portfolio management" service which is MeManaged.
How MeManaged works
It's fairly simple. You create your MeManaged account by completing a questionnaire and they will then assign a portfolio to you. This portfolio is developed by "experts" and they will then manage it for you. In finance speak, this type of service is called discretionary management. The day to day decisions are then made by MeDirect to maximise the returns of your portfolio. However, MeDirect outsources these decisions to BlackRock who run the funds.
How your money is invested with MeManaged
Let's first take a look at the four portfolios on offer.
They only work with BlackRock
The portfolios are set for you. MeManaged offers four different portfolios with a variety in asset allocation between bonds and stocks. The funds have been selected by MeDirect's "experts" in line with their criteria: performance, risk, diversification (geographic and sectorial) and sustainability preferences. They exclusively work with BlackRock funds.
We're writing this as of December 2024 and allocations can change. Do check MeDirect's website for the latest up to date information.
Essentially they offer four different portfolios with slightly different weighting:
The more stocks you have, the more risky the portfolio will be. However, their riskiest portfolio still includes 10% in bonds.
Fees
You pay a 1.3% fee per year
It's cheaper than many actively managed funds offered by banks. Yet it's still a bit pricey in comparison to some automated investment options in Belgium.
You pay a 0.90% fee to MeDirect and then the funds have a cost of 0.40% which goes to BlackRock so in total you're paying 1.3% per year.
Portfolio updates
MeManaged will oversee your portfolio. You can track the performance of your investment via their app. MeDirect say they'll make regular market comments to keep you up to date with market evolutions.
Now let's take a look at some other aspects of the MeManaged starting with the convenience of using their platform.
Convenience of MeManaged
As MeManaged is an investment service offered by MeDirect Bank, it covers a lot of the heavy lifting for you as an investor:
TOB ("beurstaks" / "taxe boursière")
Similar to Curvo, there is no TOB applied for their portfolios as they use index funds. This is a nice saving for you as a customer.
Dividend tax
There’s a 30% tax on dividends that you perceive through shares that you hold. This tax is applicable to individual stocks but also to distributing funds.
MeDirect automatically withholds and declare the dividend tax for you.
Reynders tax
For ETFs that consist of at least 10% bonds, there is a 30% tax on the profits made when selling. For example, if you bought a bond ETF at €100 and end up selling it later for €130, your net profit will only be €21. The other €9 will go to the Belgian state through this tax.
MeDirect handles the Reynders tax for you so you don't have to worry.
Does MeManaged require declaring the account to the NBB?
No need, as they are based in Belgium and part of MeDirect Bank.
Automated savings plans
Yes. You can automate your investment plan using MeManaged. When you choose to add a monthly contribution to your portfolio, MeDirect will automatically debit your MeDirect Cash account on the 27th day of each month with the specified amount.
When the account does not have sufficient balance, the investment will not be executed. You can amend or cancel the monthly contribution at any time.
Customer support
They have a phone line you can call from Monday to Friday between 9.00 and 20.00 with any questions or queries. They also have an option to send an email. We've found them quite easy to get in touch with.
Fractional shares
Yes. As you can invest from as little as €100 per month, all your money can be invested through the MeManaged BlackRock portfolios.
Create an account through the app
Besides a web platform, MDirect also offers a mobile app for both iOS and Android. Note that you can only access MeManaged by having a MeDirect Bank account.
Ease of use: 4/5
As it offers an automated way of investing your money and uses itsme, you can create a MeManaged plan fairly quickly. It's a smooth process.
Setting up an account
Let's dig into the details of setting up your MeManaged account for the first time.
MeManaged uses itsme
You can create a new MeManaged account using itsme. You must create a MeDirect Bank account in order to set up a MeManaged plan. Using itsme speeds up the process of creating an account, as the old way was very slow. It even says that manual verification can take longer.
You'll have to fill in a short "knowledge and experience" test before you can start investing. It's fairly standard and only takes a few minutes to complete.
Start investing from €5,000
The minimum investment is €5,000. Once you have deposited over €5k, you can then set up a monthly contribution from €100/month.
Does MeManaged offer children accounts?
No it doesn't offer any option for children yet.
Does MeManaged offer joint accounts?
You can set up joint accounts, which is handy for couples looking to invest together.
Can I have multiple MeManaged accounts?
No, you can only have one MeManaged account.
Safety of MeManaged
As we’re dealing with our long-term savings, safety and trust is vital. Let's take a look at MeDirect Bank which offers MeManaged.
Who is the regulator?
MeDirect is a regulated entity in Belgium. Essentially this means that the FSMA oversees them.
Have they had any issues with the regulator?
Based on our research, we can't find any information that MeDirect has had any issues with any regulator.
How much of your assets are protected by the investor protection scheme?
Assets on your MeManaged account are protected by the European investor protection scheme up to €20,000. Note that your investments are held in segregated investment accounts with custodians. Such accounts are held in the name of MeDirect as nominee for you as a client. As a result, no matter what happens to MeDirect or MeManaged, all investments will remain on these segregated accounts which means you're protected from bankruptcy.
Is your cash protected by the deposit guarantee scheme?
Yes, your cash on MeDirect is protected up to €100,000 by the Belgian Deposit guarantee scheme.
Does MeDirect do securities lending?
They do not do securities lending. This means you don't risk certain types of counterparty risk.
Does MeDirect do payment for order flow?
They do not do payment for order flow. PFOF is a notable source of income for many new brokers, including Trade Republic. This practice involves routing your orders to certain market makers, who then pay the broker for the right of executing these orders. PFOF can work at your detriment, as brokers may prioritise payment over executing the best possible trade for you.
A more transparent alternative: Curvo
We created Curvo to provide a better option for Belgian investors. Index investing, also called passive investing, is a tried and tested method for growing your wealth. It’s based on the observation that rather than picking individual stocks and trying to buy and sell at the right time, it’s usually more profitable to invest in the stock market as a whole. Instead of finding the needle in the haystack, you buy the entire haystack.
When index investing, you invest in a type of fund called an index fund. Each index fund tracks a specific index, which is a collection of stocks with strict rules on which stocks are included and how much of each company the index contains. An index fund invests in the companies dictated by the rules of the index.
The most famous index is the S&P 500, which contains the 500 biggest American companies. Large companies such as Apple, Google or Amazon are represented in the S&P 500. The main index in Europe is the EURO STOXX 50, and the Belgian BEL 20 consists of the 20 largest companies in the country.
Ever since the first index fund was created in 1976, index investing has proven to be a great way to invest. By effectively becoming part owner of thousands of stocks across the world, index investing lets anyone earn a dividend off of the growth of the world economy. The graph below shows the growth of the S&P 500 index since 1992. A €10,000 investment in 1992 would have resulted in over €220,000 by the end of 2022, or an average 10.6% return per year!
In the past, all investing was active investing. In active investing, you intentionally pick certain stocks to invest in. You hope that these stocks are undervalued when you buy them, and that you can sell them with a profit later.
Index investing takes the opposite approach. Rather than picking certain stocks that you think are going to be winners, you try to invest in all stocks at once. This way, you earn a return that corresponds to the average return of the whole stock market.
And it turns out that index investing almost always beats active investing. Curvo was created to offer index investing in a simple and transparent manner.
Portfolios tailored to you
Rather than just working with one fund provider like BlackRock, at Curvo you invest in a portfolio that is tailored to you and your goals. These portfolios are composed of globally diversified index funds, meaning you earn a piece of the growth of the global economy, and they're best suited to make the most of your savings long term. They're also tax optimised so you don't have to worry about the finer details. As well as BlackRock, we work with Amundi and Vanguard to offer the best funds.
Pay less through Curvo
MeManaged is more expensive than going through Curvo.
We believe that investing is an important tool for our generation to improve our financial well-being and to prepare for our future. We are building Curvo to fulfil that vision, by making good investing easy and accessible to all:
- Diversified portfolio set up for you: The best portfolio for you is built based on your time horizon and financial goals. Simply answer a short questionnaire and you’ll get everything set up for you.
- Automated savings plans: Through Curvo’s app you can set up a monthly contribution from €50. That means that money is automatically invested for you in your portfolio. Put your savings on autopilot!
- Fractional shares: All the money you send towards your portfolio is fully invested. No cash is left on the side.
- No TOB: Significant savings as the portfolios aren’t liable for the Belgian transaction tax (or "TOB"). This saves you between 0.12% and 1.32% for every time you buy or sell!
- Sustainable investments: Your investments focus on one guiding principle: don’t invest in companies that are considered destructive to the planet. This means that sectors like non-renewable energy, vice products, weapons and controversial companies are all excluded.
- Project yourself into the future: Through Curvo you can see how much your portfolio is expected to be worth in the future. You can answer questions like “how will increasing my monthly contribution by €50, €100 or €200 affect my long-term savings?” to give a concrete idea for the “future you”.
Learn more on Curvo's offer.
Conclusion
MeManaged stands out with its straightforward approach to investing and comprehensive tax handling. While it offers a decent automated investment solution, the limitations of working only with BlackRock funds, the €5,000 minimum investment, and the 1.3% annual fee might not suit all investors. You might want to explore other options that offer more flexibility, lower fees and minimum investments. Check out how Curvo's globally diversified portfolios could help you reach your financial goals more effectively.