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Nutmeg: ‘We are not threatened by Vanguard’

shaunnutmegOnline investment manager Nutmeg is not threatened but “excited” at Vanguard’s breakthrough into the UK direct-to-consumer market, Nutmeg chief investment officer Shaun Port says.

Earlier this month Money Marketing revealed Vanguard will launch its D2C offering within six months.

Port told Money Marketing: “We don’t look this as a threat at all. This is a market creation, not competition.

“This is going to increase brand recognition for us. There’s a huge amount of people in the UK that only save in cash Isas for instance, more than seven million people that could access a service like ours. It is good to see others replicating what we are doing”.

Port, who has been at Nutmeg since 2012, adds: “We have always said we wanted more people in the market and for us Vanguard with their giant reputation and quality products is really encouraging and we are really excited about it because opens the market to a wider audience.

“But it is not only Vanguard, others are doing the same, like UBS. We think there will be more entering this market, many said they will but still haven’t.”

Port says Nutmeg’s in-house infrastructure remains a key differentiator, enabling it to respond to customers “much quicker”.

He says: “Where we win is our agility to engage with customers to get products rapidly to market to reinvent ourselves every few years.

“If you imagine that the benchmark for proposition is Amazon, everyone falls short of that. We believe we can develop faster and get closer to customer expectations, especially in a digital world.”

Seven Investment Management co-founder Justin Urquhart Stewart says Vanguard will have “a significant impact” in the industry but should not just rely on their low cost offering.

He says: “A beast of that size with pricing power will of course make a significant impact. The industry must radically and rigorously address not just cost but primarily service and performance.

“Vanguard’s low cost models will be tested in volatile markets, while Nutmeg and others will have to prove their capability in such times and prove that service and performance outweighs a fixation on cost.”


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Money Guidance CIC 20th October 2016 at 1:27 pm

    Nutmeg: ‘We are not threatened by Vanguard’
    You should be: they`ll be eating more and more of your lunch.

  2. a bit like some krill saying they are not threatened by a blue whale. They will have to be around long enough to be threatened

  3. An unprofitable loss making company with a short history isn’t threatened by a profitable market leader who whilst only arriving in the UK recently has been around in the US for decades…. Ha, ha
    Parmenions offering looks better than UBS by miles.

  4. This is the telling part… “Vanguard’s low cost models will be tested in volatile markets, while Nutmeg and others will have to prove their capability in such times and prove that service and performance outweighs a fixation on cost.” Performance and a fixation on cost are the important pairing. There is a reason why Vanguard funds on-average beat over half of their peers each year, 80% or more over 3 years, and over 90-95% over 10 years. The factor, COST! good luck keeping up! Don’t think that volatile markets are going to make your case, either. Vanguard is very good at keeping clients that align, and they PREACH the gospel of diversification and staying-the-course. Volatile markets mean more rebalancing opportunities and incremental benefit accrued to the investor. Market scares affect Vanguard investors significantly less than other investors who take a tactical posture. Also, changing allocations based on market news has shown a high correlation of lower investment returns.

    Again, good luck competing! And it WILL be competition, their market may not seem like it overlaps as of yet. That will soon change.

  5. It would seem that nutmeg is going to be clobbered by the mace of Vanguard.

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