Nutmeg launches full advice service

Online investment manager Nutmeg has expanded into personalised advice with the launch of a new pilot service.

The robo-adviser, which was one of the first to enter the market, has levied a staunch criticism of the cost of traditional advice as it says it will offer “tailored financial advice” with “personal recommendations and qualified financial advice”.

Nutmeg says the financial advice industry has been “happy to neglect swathes of the population” to date.

Clients will be able to get a one-on-one review, “providing the insight that can only come from speaking to a professional adviser”.

Nutmeg says an initial discussion about circumstances will be free of charge, and clients will pay £350 for tailored recommendations after that.

Nutmeg did not provide any further detail on ongoing charges or what investment propositions would be available in its statement.

However, it appears that the regulated recommendations may be limited to the firm’s own portfolios. Nutmeg’s financial advice website page reads: “We’ll tell you how and where to invest your money for any Nutmeg products and we’ll help you to implement our recommendation.”

Customers can get started in 15 minutes, the firm says.

Nutmeg head of financial advice Lisa Caplan says: “Everyone has goals in life, whether it’s retiring early, investing for their children, putting money aside for the perfect property or simply making the most of their money. But the scarcity of financial advisers, prohibitive costs and an industry happy to neglect swathes of the population, means many people are faced with making big financial decisions on their own.

“Too few people know what sort of financial advice is available, how it could help them or where to find it. We want to change that and make financial advice accessible to more people.”

Caplan says the firm will be “assessing the same financial circumstances that a traditional financial adviser would” but at “a fraction of the cost they’d face from an IFA” by using technology.

Caplan adds: ” “It’s little wonder that the UK is facing such an enormous savings gap when financial advice has been so slow to adapt to changing customer needs. In the next few years the way financial advice is given is going to radically change. ”

Nutmeg has been eyeing an entry to the advice market since 2015. Assets have passed £1bn but profitability remains a struggle for the firm.


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There are 8 comments at the moment, we would love to hear your opinion too.

  1. Roddi Vaughan-Thomas 31st October 2018 at 8:55 am

    There’s no irony in this at all. None.

  2. Looking at Nutmeg’s IDD this appears a basic service targeted at those with some spare cash to invest in Nutmeg’s portfolios (i.e. no review of existing policies/transfers etc). There’s no doubt some demand for this, so good luck to Nutmeg, but a very different propostion vs an IFA.

  3. Excellent news, a practical solution for many people who cannot access financial advice. It will be interesting to see what the quality of this looks like. We may well see some mystery shopping analysis of the Nutmeg offering.

    I would make one point to Lisa though, which is that advisers are not “happy to neglect swathes of the population” that has been bought about by 30 years of ineffective and expensive regulation.

    Financial planners are in business to make profit by delivering their professional services and to do that have to negotiate huge costs

    I understand that Nutmeg has its own very real challenges in respect of making a profit

  4. This firm seems determined to burn money as if it’s going out of fashion. They have already lost many millions. One wonders at Schroders patience. Do they like chucking away?

  5. When you are in charge of a business that is losing money hand over fist, it may be wiser to keep your trap shut.

    Who knows? She might be wanting a job at one of these more successful businesses sooner than she thinks. Especially when Schroders give her the old “Spanish Archer.”

  6. Except it’s not full advice. More like restricted advice on a restricted product range. As Justin Modray points out, it’s just selling their own ISA and pension to people who meet specific criteria. It appears that there is no advice on protection, mortgages, Wills, IHT, utilising an employers’ pension scheme/existing pension plans, FAD, UFPLS etc etc. I could go on. The below is taken from their IDD:

    “Nutmeg’s Financial Advice service offers ‘Restricted Advice’ on its own range of portfolio services and investment and pension products. It is designed to identify which of these might be appropriate for you given your financial circumstances and goals.

    Our Financial Advice service is only likely to be appropriate if:

    a) you don’t need to reduce your debts;

    b) you keep a reasonable amount aside for emergencies;

    c) you have appropriate insurance to protect yourself and your family if something happens to you;

    d) you can meet your immediate financial needs;

    e) and after these considerations are made, you still have spare income or capital to invest.”

    By the way, I could launch an advice service for 99 pence; the question is whether it is profitable and sustainable. Time will tell in the case of Nutmeg, or maybe Nutmeg’s “advice” doesn’t need to be profitable as it is a loss leader?

    • Interesting list of pre-requirements. I’m guessing the clients are being asked to confirm these points before continuing. However, what do they actually mean in practice?

      Doesn’t everyone need to reduce their debts?

      What is a reasonable amount for emergencies?

      How much insurance do they need and what’s appropriate (life, CI, etc.)?

      How many people are clear on their immediate financial needs?

      Isn’t it the basic part of an adviser’s job to take clients through these points? How many clients are capable of doing this properly themselves without intervention?

      Perhaps they do walk people through this as part of the free initial discussion. However, if the client needs protection, what happens next?

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