In the UK, one of the fastest-growing industries in the investment world is Robo-advisors. In fact, more first-time investors and seasoned investors alike are turning towards online options to manage their finances and lower their expenses at the same time. Traditional financial advisors are still around, but their high fees and short services times are no longer desired among the younger generation.
One of the top Robo-advisors on the market in the UK is Nutmeg, which has captures the hearts of millennials, first-time investors, and even global investors looking to break into the UK market.
In our Nutmeg review, you will learn how this company takes the guesswork out of investing and also transforms this into an online-friendly platform.
Robo-investors are not only easy to use, but their services are also automated and much more affordable than dealing with a certified financial advisor in person.
It is worth noting that with so many new Robo-advisors hitting the market, it can be hard to know which ones are legit and which ones will actually help you garner a good return for your investment.
Our Nutmeg review will show you how this platform ranks in comparison with others on the market so you can make an informed choice that will help you secure your future.
Table of Contents
What is Nutmeg Invest?
Before we get into our Nutmeg review, let’s talk about what Nutmeg Invest actually is. In the United Kingdom, Nutmeg is the first discretionary investment management company that has been launched online.
It was first launched in the spring of 2011 by a team of two investors who were tired of how difficult and murky the world of investments in the UK had become.
Today, they manage more than 1.5 billion dollars of work of assets. To date, they boast just over 60k customers, almost half of which were first-time investors when they created accounts with the management company.
They are now the world’s 8th largest managers of wealth in the UK.
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All About How Nutmeg Invest Works
Nutmeg invest uses smart algorithms paired with in-house market analysts to tailor investment portfolios to meet the needs of each of their clients. The portfolios will contain ETF’s that are intended to diversify existing portfolios or to create new balanced portfolios for first-time investors.
Portfolios are built according to the investment amounts and the risk appetite of each client. If you are a beginner or a passive investor who wants moderate growth, there is a portfolio option for you. For those interested in taking a more adventurous approach to their investments, there are higher risk portfolio customization options available.
The team behind the company has provided a list of more than 1800 ETFs for the investment pool. This team will also assign specific ETF’s they consider the best for each particular class, region, and industry sector. Your assessment questions will help choose which ETF’s from this pool are best suited to your risk appetite, and then they will be added to your customized investment portfolio.
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How to Sign up For Nutmeg Invest
As part of our comprehensive Nutmeg review, we will also cover account creation and sign up for the service.
Nutmeg is mainly for investors in the UK; however, some non-UK residents can also create accounts as long as they maintain a UK bank account and hold a British Passport. US citizens are no longer able to create new accounts due to complications with the tax law. However, existing US-based accounts are allowed.
To get started, first take a look at the available portfolio options. Once you find one that fits your investing style, click the “invest now” button located on the website’s homepage. You will need to choose your account type. The options are:
- General investment account
- Lifetime ISA
- Stocks and shares ISA
- Personal pension
Once you select your account type, you will need to take a short survey to help determine the risk tolerance setting for your portfolio. The questions will cover how much you plan to invest, your intended length of investing, the reasons you are investing, the amount you plan to deposit upfront, as well as monthly if any.
Once you answer these questions, you will get a portfolio projection. This is just a general idea of how well your estimated portfolio is expected to perform.
The onboarding process is very smooth and intuitive. Once you identify your deposit levels and investment horizons, consider your choice of a hands-on portfolio that is managed by a human team or one that is automated. Fees will vary depending on the tier and style of management you choose.
The final page has a slider that lets you choose your risk & reward level ranging from low to high. The increments are separated into five segments starting at cautious and ending at adventurous. What you choose will influence the asset allocations within your investment tier.
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Is Nutmeg Invest Legit?
Nutmeg Invest, according to our nutmeg review, is a legitimate investment tool. The company is licensed and registered to conduct financial transactions both locally and internationally.
The business falls under the regulations of the SEC, among others. Nutmeg Invest, like most Robo-advisors, has joined FINA (Financial Industry Regulatory Authority). Though this is a self-regulatory organization, it allows investors to check the legitimacy and performance records so that a human advisor can be cross-referenced.
As far as the SEC is concerned, Robo-advisors retain the same legal status and responsibilities as traditional human investment advisors.
They must be legally registered and in good standing with the SEC to provide services to the public. They are also subject to the same rules, regulations, and securities laws as traditional investment brokers.
Consumers can look up Nutmeg Invest on BrokerCheck to find more detailed information regarding their services and status with the SEC. It is important to note that any assets held or managed by Nutmeg Invest on your behalf are not FDIC insured since they are investment funds and not traditional deposits.
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Nutmeg Invest Pros
If you are looking to spend time investing, there are many reasons to move forward with Nutmeg. One of the best reasons to choose the platform is that it offers a very easy-to-use interface that even those new to investing will understand. People who are not tech-savvy will find the interface intuitive, making it one of our favorites in the ease of use category.
Fees can easily become a problem with any investment, but with Nutmeg, not only are the rates affordable, but the fee structure is also transparent and easy to understand. Everything is listed on the main feed page, so you know in advance how much you will pay instead of worry about your profits being eaten up by hidden charges.
Once your account reaches the higher tiers, you will also have access to live financial advisors to help your returns grow even more. Rebalances and dividend reinvestment is also automated, so you never have to worry about your portfolio growing stale or getting lopsided, which would increase your investment risk. Like many Robo-advisors, there are plenty of socially conscious investment options to add to your portfolio.
You can also create a broad range of account types to help you reach your investment goals. Account setup is quick and easy, and you can personalize your investing option according to your specific risk appetite.
Last but not least, customer service is top-notch, so if you ever run into a problem, someone is standing by to talk you through it.
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Nutmeg Invest Cons
As effective as Nutmeg is as a platform, it still has some negatives that are worth noting. The most prominent among them is the high requirements for investment.
For general and ISA accounts, there is a £500 minimum upon account creation. In addition, users will have to a monthly deposit of at least £100 until there is £5,000 in the account.
These rates price many new and fixed-income investors out of the market, which is never a good thing. There are also high fees for the automated fixed allocation tier compared to other platforms that offer the same or similar services.
Another issue many users noted is that once an account is set up in the fixed income tier, very few services are available to say users. Marketing is also focused on those in the higher tiers, wmakinglower-tier users feel neglected and unwelcome.
Many other Robo-advisors offer critical tools such as tax optimization, but this feature is not present on Nutmeg despite the high fees. One of the most important things to note is that there is no third-party research regarding any of the stocks or services located on the website. The available materials are basic and only provide the bare minimum of information.
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Nutmeg Invest Fees
Nutmeg Invest has a £100,000 minimum investment and charges an account management fee.
0.45% annually regardless of account level for their fixed allocation portfolios. Once the account balance exceeds £100,000, the management fee drops to 0.25%.
On par, the investment expense ratio is an average of 0.17% with an average market spread charge of 0.07%. Nutmeg Invest charges fully managed portfolio accounts a fee of 0.75% for balances £100,000 and below, the fully managed account fee for balances over £100,000 is 0.35%.
Additionally, the investment expense ratio is an average of 0.19%, with an average market spread of 0.07% for their fully managed accounts.
For clients with a socially responsible portfolio, the fees are 0.75% for balances of £100,000 and under and 0.35% for balances above the minimum. The market spread fee is the same as other account types, and the investment expense ratio is an average of 0.33%.
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Nutmeg Invest Performance Ratings
Nutmeg is often in the headlines, but thankfully for good reasons. The company boasts a large client base and its extremely fast growth in the last couple of years. Though they have yet to profit despite increasing their client base, the founders confirm that the company is on track.
Most of the investments are solid, and the profits are instead put back into the business so that Nutmeg can further establish itself in the market as a global leader.
Despite the company itself not turning a profit, the investors have seen moderate to strong returns in their portfolios. All investments are held by State Street Corporation and are also covered by FSCS, making this a strong choice for your investment account dollars.
- Ease-of-Use – 4
- Features – 3
- Customer Service – 5
- Value for Money – 4
After looking at all the angles during our Nutmeg review, we have to say it is a great option for those living in the UK. It is no longer open to people in the US, but that doesn’t stop the company from expanding its market reach. The high minimums make it a bit more restrictive, but if you are starting or don’t have much to invest in, there are other options out there.
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Nutmeg Invest Referral
If you are looking for a way to make your money go the distance, investing with Nutmeg is a pretty good option. The platform is easy to use and takes care of most of the hard work on your behalf.
The fees as low, and all you have to do is supply the funds and watch your money grow. For those interested in starting an ESG investment portfolio but are unsure how to go about it, Nutmeg Invest makes getting started with an investment portfolio simple and affordable.
You can click (here) for a referral discount, or you can sign up with the website directly at full price.