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Nutmeg advice boss on where guidance stops and planning starts

Nutmeg head of financial advice Lisa Caplan tells Money Marketing how the controversial service is shaping up four months in

When digital wealth manager Nutmeg announced its expansion into personalised advice last October, industry heavyweights were quick to criticise what it counted as “advice”.

Nutmeg’s advice proposition includes a free initial consultation followed by a £350 charge for recommendations and an additional £350 charge for any ongoing consultations or management, but is limited to recommendations on Nutmeg’s own investment portfolios, and will not handle discussions on tax planning, protection, transfers, drawdown and other areas.

We polled readers in November on whether they thought Nutmeg’s long-planned entry into advice would help pull it out of its profitability struggles.

Just 21 per cent said the venture would be a success, against 67 per cent who voted “no” and 13 per cent who were “unsure”.

Speaking to Money Marketing, Nutmeg head of financial advice Lisa Caplan says the service has been more guidance than advice so far, but a success nonetheless.

Caplan says around two thirds of enquiries received to date have only needed guidance. Of the third that have taken fuller advice, the majority are men.

She says: “They are also very dispersed across the country compared to our client base which is very London-heavy. We’ve seen many people with a real need for advice and we’ve taken that on and they will need a full recommendation and plan and advice service.”

The original mantra behind Nutmeg’s proposition was that it was built for people “shut out” from traditional advice. Caplan says those being served currently have reiterated that view and their needs lie mostly in retirement planning and tax advice.

Caplan says: “People want to know how well they are set up for when they eventually stop working and for almost all the others, the advice centres around what they can do now to maximise their money that’s beneficial and within the rules, so it’s tax-based advice.”

She is one of two advisers working on the proposition along with one paraplanner, one product manager, a technology designer and an extended data team.

Caplan says: “We are going really well in line with expectations and we’ve seen a great deal of interest, with over 1,000 people registering their interest. We have spoken to a large variety of people, a mixture of existing and potential customers.

“The people who have gone on to take advice with us do have plenty of money for us to be sorting out.”

For those that do not need the technical help, the opportunity to speak with an adviser has yielded positive feedback for the service regardless.

Caplan says: “I’ve spoken with people on the phone who I’ve ended up just giving guidance to and they had no idea about their pension, for example. Once we explain a few basic terms, they go away feeling a lot better and we feel we have provided a useful service.

“It’s clear people want to talk to people and this is a successful way [to do that].”

When Nutmeg announced its entry to the advice market, the idea for mortgage advice was flagged as “under review”.

No progress has been made on the idea to date, however.

Caplan says most customers are focused on “broader picture” advice rather than specifics, although the service has fielded enquiries about impact investing.

Nutmeg launched a 10-strong range of socially responsible portfolios two weeks after announcing its entry into advice.

Caplan says that 12 months down the line, Nutmeg will have found a solution to onboard more customers based on the initial interest so far.

She says: “We have a huge workload and we are approaching sorting that in two ways.

“First, talking with a technology team to identify what we do manually and whether or not we can automate that and switch up processes to be faster and better for more customers.

“The other part of the process is looking for more paraplanners and advisers, although we are not yet decided on how we will go about it.”

Whatever way Nutmeg does decide to progress, Caplan confirms it will not be through external acquisitions. Rather, the group may look to hire advisers into the wider business.

Caplan says: “This is us doing our part on industry-wide education. Everyone worries about saying too much or crossing that line from guidance to advice, but we need to find a way around that and help people while staying within the rules.

“I was an adviser, so I know and believe in the value of good advice. Our advice customers didn’t know how to access advice and now through Nutmeg’s proposition, it’s solved their problem.

We want to make advice available to anybody.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. I think the content of the second paragraph tells it all……just look at all the areas of exclusion from advice! The fact is comprehensive financial advice today is a highly bespoke, nuanced and labour intensive service.
    For these reasons and the regulatory overlay quite a costly provision too! As laudable as any attempt is to mitigate exclusion the reality is the cost of advice shows no sign of tumbling any time soon! A sad fact I know, but true!

    • @Duncan – Exactly what I was thinking with those exclusions!!!!!

      It would be quicker to list what they do rather than what they don’t do!

      That’s not advice, it’s just risk assessing and matching to asset allocation….. all the excluded stuff they DON’T do is the true advice that real clients are looking for and/or appreciate.

  2. At Duncan Jones. This is the age old problem of cutting down advice – for the many, and lacking in adressing their real concerns, their true Needs and Requirements – in return for fees and charges which are not proportiate with the minimal work they conduct. Product floggers to the exclusions of Appropriate or suitable advice.

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