Based in London, UK and established in 2011 by William Todd and Nick Hungerford as a privately-owned entity, Nutmeg, a discretionary investment portfolio management company distinguished itself at the time as the first company in the UK to employ the services of a fully functional robo-advisor. The company invests predominantly in Collective Investment Vehicles (CIS) and primarily Exchange Traded Funds (EFT). In doing so, offering access to the UK’s more than 1800 EFTs as listed by 24 unique providers. ETFs by definition, uncomplicated liquid securities come asset-backed, purposed to track broader market index movements.
The company offers general investment account, individual savings accounts (ISA), retirement accounts, and lifetime ISAs. In contrast to companies acting as trading platforms, investment companies defined as discretionary investment managers retain the right to make executive investment decisions on behalf of its investors. This classifies them as a robo-advisor due to Nutmeg’s utilisation of predictive computer models by company investment managers during their oversight and administration of client investments.
As a result of these proprietary automated service processes offered by the company, users simply need to select their chosen investment and/or savings goals, submit their preferred investment amount before completing a risk tolerance survey to determine a proposed diversified investment portfolio solution.
During the entire process, the advanced levels of automation negate any requirement for human interactioné. However, should the need arise, the company offers the services of representatives to assist with any further potential queries. The core purpose of the investment process automation aims at achieving investment results mirroring those found in the overall market. This simultaneously lowers the cost when compared to similar services and results offered by traditional advisors.
Though for the greater part EFTs commonly hold positions of equity, they could comprise of a diversity of asset categories, including future contracts and bonds. Nutmeg, an independent business entity, can opt to include a variety of assets, holdings, or securities as they prefer since the company holds no established associations to any singular provider.
In accordance with its marketing campaign investment strategies, Nutmeg sets its belief in intelligent allocation of long-term assets over any attempt at predicting and selecting a singular company who may or may not outperform its competing peers. As such the company’s investment management team engages a wide variety of assets to compile their various globally diversified investment portfolios.
Licencing & Regulation
Registered in the UK as Nutmeg Savings and Investment Limited, the company operates under protection of the UK Financial Services Commission Scheme (FSCS) and remains subject to regulatory oversight and authorisation of the FCA. The company offers its services exclusively to UK residents as well as non-UK residents in possession of a British passport with an active UK bank account.
Despite to the discretionary structuring of services that offers no client trading platform per se and as a result disallows any form of self-directed investment, Nutmeg still present its clientele with capacity to access their personal investment account 24/7 via the company’s proprietary mobile app.
Tailored to provide glitch-free compatibility to both iOS and Android software environments the apps are available from Apple’s App Store and Google Play, it allows investors to transact deposits & withdrawals, exchange communications with their investment manager, as well as monitor the performance of their personal investment portfolio.
Brand & Functionality
The company offers no method, or fundamental tool for the historic analysis and charting of performance, however, the company publishes its portfolio performance minus any fees which provides investors with insight on portfolio performance.
According to Boring Money, a well-respected financial advisory site, this year Nutmeg received an award for top-performing robo-advisory investment service. The award arrived in the wake of an analysis into the performance of eight leading online robo-advisory services the results of which confirmed Nutmeg as the top performer when weighed according to criteria considering risk and returns during the previous 12 months.
Since its inception, the company founders, frustrated with red tape and insider jargon, focused on and worked hard toward establishing a brokerage service accessible and affordable to everyone, while it continuously remained transparent in its dealings and operations. Depending on the level and volume of guidance each investor requires as well as the amount they desire to invest, individuals can opt anywhere from a fully managed investment portfolio to a fixed allocation investment portfolio package.
Registering with Nutmeg is a straightforward process requiring you to follow the next steps:
- Navigate to Nutmeg, select the green “Start here” box located in upper left of the page.
- Select your preferred investment option by clicking on any of the green boxes “Select General; Select ISA; Select LISA; Select Pension”, for the purposes of this exercise we’ll select the “Select General” investment option.
- From the two options presented choose your savings goal “Just invest” or “I have a goal”, we’ll use “Just invest” and provide a name for your investment pot and select the green “Continue” button.
- Choose your preferred investment period via the slider (available pre-selected time-scales vary from 3 to 50 years) or fill in your preferred investment period in the designated box, select the green “Continue” button.
- Using the two provided sliders choose your fixed lump-sum starting amount (varying from £500 up to £100,000) and/or your preferred monthly contribution (varying from £0 up to £5,000) select the green “Continue” button.
- Choose any one of the three presented investment styles “Fixed allocation; Fully managed; Socially responsible” by selecting one of the green “Select fixed; Select managed; Select SRI” buttons located at the bottom of each investment style.
- Use the presented slider to select your ideal level of risk ranging from Cautious, to Steady, Balanced, Growth, up to Adventurous, and select the green “Continue” button.
- You will then see a projection of the potential future returns based on the company’s historical performance where-after you have the option to revise your previously chosen options or continue by selecting “Create a Nutmeg account”.
- Complete the required text boxes by filling in your email address and then create your password, select the green “Continue” button.
- Nutmeg will then require you to submit documentation to verify the validity of your account ownership. The required documentation includes clearly legible photocopies of your national government-issued photo ID, driver’s licence, or passport, and statement of utility bill reflecting your address.
Nutmeg, as a UK based and facing brokerage, accepts payments in GBP made via all local commonly utilised payment formats such as Bank Wire/EFTs, Visa, MasterCard. TLS encryption provides solid security protocols covering client communications, combined with a two-step verification process to protect investors while logging into their accounts ensures a comprehensive security blanket.
A detailed FAQ section provides comprehensive instructions covering all aspects of transacting payments via the different desktop and mobile software environments made into the various different investment types, including lump-sum and monthly options.
The range of account types, which includes Standard Investing Accounts, ISAs, Lifetime ISAs, and Pension Accounts, cover all available investment options as well as their minimum and maximum investment amounts on offer at the robo-advisory online brokerage.
Clients receive excellent initial investment guidance to determine their goals, investment amounts, and available time-period via a simple yet comprehensive questionnaire made available in uncomplicated lay terms they must complete as a prerequisite to the registration process.
In addition to Nutmeg’s robo-advisory service clients have the option of consulting with personal advisors if required.
As one of the most important performance aspects of any investment format, Nutmeg offers the benefits of a fully managed investment without the resultant cost drawbacks. The efficiency comes inherent to the discriminatory nature of the investment style, and historically Nutmeg continuously outperforms its peers hence the acclaim bestowed upon the firm this year.
At Nutmeg security and maintaining client trust remains a primary concern. As a result, the company utilises a “custodian bank” for securing client funds. The selected custodian in this instance is State Street, one of the globe’s largest financial custodians having over £18 trillion in secured assets under their custody.
Further to this, State Street holds custodial funds in segregated accounts with no option for third-party lending of such funds. The company currently provides its services to thousands of high-net worth persons, investment managers, and major banking brands globally thereby leaving your funds completely safe and fully protected even should both Nutmeg and State Street declare bankruptcy!
Despite the nature of robo-advisory services which leaves the customer investment support team in a position where they remain unable to provide any direct form of advice, the team provides full guidance to assist clients though the initial setup process to resolve any potential doubts and answer basic questions.
Nutmeg offers no trading platform, and as a result, offers no investment tools usually associated with such services, instead assistive tools includes a Retirement Calculator for Pensions, Investment / Savings Forecaster, Research and Educational Articles, Portfolio Breakdown, Mobile Apps for both Android and iOS software environments, as well as an extensive FAQ section. In addition, Nutmegonomics, a dedicated blog, provides insightful educational and informative articles aimed at increasing client knowledge and confidence amongst beginning and intermediate-level investors.