Nutmeg Review

We cover the popular UK Robo-advisor.

Updated: June 13, 2024
Matt Crabtree

Written By

Matt Crabtree

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Nutmeg starts with algorithm-based UK financial service offerings for a variety of account types, namely Individual Savings Accounts (ISAs) and Employer-Matching Pensions, which also attract a 25% governmental bonus.

Each is tax-exempt up to £20k annually. And as you climb up the investment tiers, you’ll benefit from Nutmeg’s transition from wholly computerized to hybrid—supervised by human professional investment advising.

Although we will also discuss these levels, we’ll focus on automated accounts (-Top Robos Guide-) generated and maintained. Continue reading for our simple Nutmeg review—so that you can quickly know if it’s for you!

Nutmeg Review – Overview

Positives – Automatic rebalancing and reinvestment of dividends, great variety of accounts, access to human advisors at premium tiers. 

Drawbacks – Fees can be high for fixed allocation levels, but has minimal management. 

User Friendliness: Great

An easy, well-designed enrolment procedure is offered by the Nutmeg stock trading app. A brief survey that asks about your objectives, investment horizons, and initial and ongoing contribution amounts—whether made with cash, from other people, or with employment contributions—needs to be completed by you (for pension accounts). 

After completing the survey, you are required to select one of 3 investing styles: fixed allocated, fully managed, or socially conscious. The bottom tier is entirely automated, whilst a human finance staff manages the higher tiers actively. You must carefully study the small print before choosing because fees differ for each tier.

A straightforward toggle with “low risk/reward” and “large risk” options may be found on the last induction screen.

You must select one of the 5 risk-sensitive tiers (conservative, stable, balanced, growing, or aggressive), with your decision affecting the suggested asset allocation's stock and fixed income mix. In order to account for market volatility, the algorithm then generates a graph showing your asset composition and expected returns over the investment period.

Then you’ll be able to check out the suggested portfolio's holdings, which in one test included around 20 stock and corporate/government bond ETFs for an investing account across a decade-long time window. Because there are so many separate ETFs, additional expenses could arise as you are responsible for paying spread fees.

Self-Service Features: Competitive Goal-Setting, but ‘OK’ Tracking

Goal planning is efficient in Nutmeg, however, goal tracking/monitoring is not as advanced as it is on a few other platforms. Throughout account creation, new customers choose objectives from a long list, and a research area offers ISA and retirement account calculations that provide advice on the asset amounts required to meet income or retirement priorities. 

Before opening an account, Nutmeg also provides both free and paid analyses of investments made by other parties, with both services serving as marketing tactics. The information on an overall financial blog can help with goal setting and monitoring.

From your account, you can adjust values to meet those objectives by seeing a full graph of possible results for the investment horizon and future years in Nutmeg's portfolio allocation summary.

However, fully managed and socially conscientious users can interact with financial advisers at any moment. After profiles are created at the set allocation tier (automatic) level, there is no longer any close mentoring or clear-cut guidance provided.

Human Services: Useful for Getting Started

With just a username and email address, you may use Nutmeg's Portfolio Review Service to submit third-party reports and receive a free assessment from a member of the investing team. For a longer, 45-minute review and discussion with a financial consultant who would assist the customers define their goals, they charge £163.

You may pick cash amounts, set up regular deposits, and have access to a wide range of free internal instructional materials.

On request, Nutmeg will also do third-party free account transfers, albeit the original brokerage may still charge fees. ISA and private pension account transfers may be subject to statutory fines, whereas regular account withdrawals are no-cost, although they need up to 7 working days for processing money.

Assets: Competitive ETFs

The components of Nutmeg's fixed-allocated portfolios are typical for robo-advisors. Asset distributions are divided into the following seven clusters by Nutmeg:

  1. Developed stocks
  2. EM stocks
  3. Global stocks 
  4. EM government bonds 
  5. Developed business bonds
  6. Standard business bonds
  7. Commodities

As previously indicated, before creating an account, you can explore various examples of fixed-allocated portfolios. The portfolio allocation produced by Nutmeg's risk categories can range from the vast majority in bond ETFs—with one approach—to almost all stock equities (through the ETF vehicle rather than stocks directly) at the other.

If a certain example portfolio piques your attention, you can click the allocation to get a detailed list of the ETFs used.

The robo-advisor purchases and sells fractional shares of ETFs to build portfolios after an account has been filled. These ETFs are offered by a wide range of providers from different regions.

Hand’s-On Portfolio Management: Reasonable

Diversification and other MPT elements are integrated into all portfolios. The first time you begin your investing journey by setting it up, the completely automatic preset allocation level offers you a diverse portfolio and regularly rebalances if you have too many inefficiencies.

All dividend payouts that an item in your portfolio pays out are also instantly reinvested. At the upper stages, personal advisers offer assistance past that point, such as tutoring on boosting commitments to stay on track.

The asset allocation for the remaining two layers is roughly broken down as follows:

  • Fully managed accounts are handled by a core professional team that regularly makes strategic changes to your plan with the aim of mitigating risk and enhancing profits.
  • In addition to investing in environmentally friendly products, socially conscious accounts are actively managed by a professional investment team. This team makes frequent strategic changes to your strategy in an effort to protect it from losses and increase returns.

Integrations with money-saving apps… Users can view their Nutmeg ISA, Lifetime ISA, retirement, regular investment account, and Junior ISA amounts on the applications along with other investment vehicles they own thanks to Nutmeg's integration with Yolt, Emma, and Money Dashboard.

User Experience: Room for Improvement

Using a Mobile Device

For the Android and iPhone users, Nutmeg offers specialised software products with extensive account features. The firm was first introduced in 2012 as an app-based robo-advisory, therefore it has experience with mobile business delivery.

Desktop Environment

Nutmeg’s main site is simple to use and highlights the key account options, offerings, and disclosures. There are many helpful and comprehensive support materials available, including calculators and a blog with thousands of posts on general finance.

Consumer Assistance

Each webpage includes quick links and contact details: their phone number, email forms, and live chat links, making it simple to get in touch with customer support personnel. Additionally, there is a useful “call back” option that enables new and potential clients to select a time for a representative to contact them. 

The specified phone service hours are 8 a.m. to 7 p.m. Monday through Thursday and 8 a.m. to 4 p.m. on Friday. Additionally, clients can plan a trip to the London office.

Security & Education

Materials, tools, and a blogging page are just a few of the free educational resources provided by Nutmeg. The popular blog offers market research based on recent news in addition to a wide range of e-learning.

The Nutmeg Investor Update is a video-based monthly content item that provides a synopsis of current market news and connects it to Nutmeg's product. 

Considering how vast it is, a better-structured contents table and search index would be helpful. The platform also provides 2FA for online and mobile accounts, and fingerprint and facial recognition technology is used in mobile apps to enhance further protection.

What About Fees: Slightly More Than Average Compared to the US Apps

You pay a 0.45% commission on Nutmeg's automatic fixed allocation level for the initial £100,000 in assets under administration; the price drops to 0.25% after that. For the features that Nutmeg offers, this is a little pricier than typical. The cost for the managed service and socially conscious levels is 0.75% for the first £100k in holdings and drops to 0.35% after that. 

Estimated yearly ETF costs for the set allocation level are 0.17%, it’s 0.19% for the managed service, and for the socially conscious level, they are a hefty 0.33%. Additionally, Nutmeg pegs the typical market spread as 0.07%.

Nutmeg Review: UK Verdict

If you live in the UK and want automated investing, Nutmeg provides a reliable option at a fair price. There are certainly a lot of robo-advisors that provide MPT-based accounts with identical automatic capabilities (and extra features too), but many of them are designed to cater to Americans.

Nutmeg does not appear to be under as much obligation to compete on prices or extra services and features due to the absence of any comparable amount of rivals in the UK.

However, if Nutmeg's algorithms acted more once your account has been set up, it would be simpler to defend it's somewhat higher than normal 0.45% cost for the automatic tier. Nutmeg is, though, on the cheaper side of things relative to robo-advisor services in that market in the UK and just 0.1% over the US median.

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