Nutmeg Review

Written by Sam Hodgson
Last updated: 18th November 2023

A Comprehensive Nutmeg Review – All You Need to Know

In this extensive Nutmeg review, we will delve into Nutmeg investments, exploring its diverse account types, unique investment styles, fees, and more to help you make an informed decision for your financial future.

Key Takeaways

• Nutmeg offers a range of investment accounts, styles & portfolios with varying risk levels.
• Fees vary depending on the style and are transparently disclosed. They are more expensive than DIY investment portfolios, but you benefit from expert portfolios.
• Nutmeg provides extensive safety measures, customer support options & educational resources to help you make informed decisions about your investments.
• Good historical track record.

Nutmeg’s Investment Accounts Overview

As a digital wealth manager, Nutmeg offers a range of investment accounts to suit different financial goals and tax advantages.

The General Investment Account (GIA) is a standard investment account without tax-free perks, but there are no limits to how much you can invest.

If you’re looking for tax-free benefits, Nutmeg provides the following investment options:

• Stocks and Shares ISA: You can invest up to £20,000 per year tax-free.
• Junior ISA: A tax-free investment account managed on behalf of your child until they turn 18.
• Lifetime Stocks & Shares ISA: receive a 25% government contribution bonus, but ring-fenced for buying a first property or retirement.

Finally, the Nutmeg Personal Pension (SIPP) offers a specialised option for retirement savings where you get tax back on your contributions, but remember that you cannot access your pension until reaching 55 (rising to 57 in 2028).

Nutmeg allows you to select your risk level, irrespective of the investment account you opt for, promising a personalised and comfortable investment journey.

Whether you’re a cautious investor or seeking higher returns, Nutmeg has an option for you.

Nutmeg Investment Styles Explained

Nutmeg provides four unique investment styles designed to suit various preferences and risk levels:

• Fully Managed
• Smart Alpha
• Fixed Allocation
• Socially Responsible

Each style focuses on Exchange Traded Funds (ETFs) as part of their investment strategy: lower-cost, diversified (lower-risk), easy to trade, and accurately track market movements.

Nutmeg’s risk scale of 1-10 empowers you to identify the investment style that aligns with your comfort level, helping you understand how much risk you’re willing to take. 

This flexibility allows you to invest according to your financial goals, whether for a short-term purchase or long-term wealth accumulation.

Fully Managed Portfolios

A fully managed portfolio, also known as an investment portfolio, is actively managed by a team of experts who work asset allocation and management.

They continuously monitor and adjust the portfolio to keep up with the market and changing trends, ensuring an optimal market spread.

These portfolios typically contain a mix of stocks, bonds, and other securities for minimising risk through asset diversification.

If you favour a hands-off approach to investing, this investment style is ideal as the expert team handles all the intricate details.

Nutmeg’s Fully Managed portfolios allow you to relax while the professionals manage your investments.

Smart Alpha Portfolios

Smart Alpha portfolios, developed in collaboration with J.P. Morgan Asset Management, aim to outperform the market using a combination of human expertise and robo-advisor technology.

These portfolios provide access to J.P. Morgan’s market insights and research expertise, ensuring you maximise your investment.

Available for Personal Pensions, ISAs, and General Investment Accounts, Smart Alpha portfolios consist of five options ranging in risk level, each containing passive and active exchange-traded funds.

While this offering is relatively new and has no accurate track record, the collaboration with J.P. Morgan provides a promising investment opportunity for those seeking an edge in the market through investment platforms.

Fixed Allocation Portfolios

Fixed Allocation portfolios use technology to make investment decisions, offering you a lower-cost alternative to active management.

With a combination of different asset classes like stocks, bonds, and cash in predetermined ratios, these portfolios provide risk diversification and access to ETFs.

While Fixed Allocation portfolios may not capitalise on market opportunities as actively managed portfolios do, they offer cost-saving benefits and easy management for those looking for a more hands-off approach to your investments.

Socially Responsible Portfolios

Nutmeg also offers Socially Responsible portfolios for those who prioritise environmental, social, and governance (ESG) factors.

These portfolios focus on investing in companies with positive ESG factors, ensuring that your investments align with your values and contribute to a better world.

By choosing a Socially Responsible portfolio, you can positively impact society while aiming for financial returns. 

This investment style is perfect for those who want their investments to reflect their commitment to sustainable and responsible practices, and it offers various socially responsible investment options.

Fees Breakdown

There is a £500 minimum investment for GIAs, ISAs and SIPPs. Lifetime ISAs, however, have a minimum of £100.

For fully managed, thematic, Smart Alpha and socially responsible investment portfolios, Nutmeg charges 0.75% of portfolio value on the first £100k and 0.35% after that.

Fixed allocation costs are lower, with Nutmeg charging 0.45% on the first £100k and 0.25% on the portion beyond.

In addition to the management fees, you will be charged for the underlying fund costs, ranging between 0.22-0.36% depending on the funds, and market spreads, at 0.04%.

To help you better understand the fees, Nutmeg offers a fee calculator that makes their rates transparent and easily comprehended.

Remember that while Nutmeg’s fees might be higher than those of some other digital investment providers, the unique investment styles, expert management, and diverse account options may justify the additional cost for many investors.

Nutmeg Performance Review

Nutmeg’s investment performance is often compared to competitors such as Wealthify, Moneyfarm, and &me.

In the past five years, Nutmeg hasn’t performed as well as the industry average in all but the highest risk level and has lagged behind Moneyfarm in every risk category.

However, keep in mind that past performance doesn’t guarantee future results. Nutmeg has a solid 10-year record for its fully managed portfolios, and its Smart Alpha portfolios, developed in collaboration with J.P. Morgan, show potential for future growth.

Safety and Security Measures

Nutmeg places utmost importance on safety and security. It is a regulated financial services company in the U.K. by the Financial Conduct Authority (FCA).

Additionally, Nutmeg is protected by the Financial Services Compensation Scheme (FSCS). This regulation ensures that your investments are safe and secure.

Nutmeg implements safety measures like multi-factor authentication (MFA) and strong password requirements to protect your assets.

With their focus on cybersecurity and safeguarding your assets, you can trust that your investments are in good hands with Nutmeg.

Nutmeg Customer Support Options

A variety of customer support options are available at Nutmeg, including:

• Phone
• Email
• Live chat
• In-app messaging

This range of support channels ensures you can get the help you need whenever needed.

While Nutmeg has an impressive rating of 3.6 out of 5 stars on Trustpilot, some customers have mentioned experiencing slow email response times. However, the overall opinion of Nutmeg’s customer support is positive, with many praising the knowledgeable and helpful support team.

Considering the positive and negative aspects of Nutmeg’s customer support is crucial when determining if the platform suits your needs.

While some customers may have experienced slower response times, the overall satisfaction with Nutmeg’s support options speaks to the quality of their service.

With a hands-off investment solution like Nutmeg, you may need less ongoing support and service compared to more DIY investment platforms where you’re building your own portfolio.

Comparing Nutmeg to Other Providers

A few key differences come to light when comparing Nutmeg with other investment providers like InvestEngine, Wealthify, Lightyear, Moneyfarm, and &me.

Regarding fees, Nutmeg is known to be one of the pricier digital investment providers than others. However, the unique investment styles, expert management, and diverse account options may justify the additional cost for many of you.

In terms of performance, Nutmeg has a solid track record for its fully managed portfolios, but it has lagged behind some competitors in specific risk categories. However, the potential for growth in Nutmeg’s Smart Alpha portfolios, developed in collaboration with J.P. Morgan, should not be overlooked.

Lastly, Nutmeg offers features that set it apart from other providers, such as automated rebalancing and tax-loss harvesting.

It’s crucial to carefully weigh the pros and cons when comparing Nutmeg to other providers and determine what you value most in an investment platform.

Educational Resources and Tools

Nutmeg provides a range of educational resources and tools to assist you in making knowledgeable investment decisions.

Their goal planning section is an excellent feature in the app, demonstrating the power of long-term investing and the impact of small increases in monthly contributions on your net worth.

In addition to the goal planning section, Nutmeg also provides a blog, jargon buster, and articles covering various investment-related topics.

These resources can help you expand your investment knowledge and make better decisions for your financial future.

Summary

In conclusion, Nutmeg offers diverse investment accounts, styles, and features tailored to different financial goals and risk preferences.

With its user-friendly platform, knowledgeable investment management, and commitment to safety and security, Nutmeg is a solid choice for beginner and experienced investors.

Although charging slightly higher fees than competitors, it offers unique extra services and incorporates a streamlined, easy-to-use app.

Frequently Asked Questions

Is it worth using Nutmeg?

Based on reviews, Nutmeg can be a great choice if you understand the risk and take necessary precautions. It can provide good value for money and is worth considering for your portfolio.

Can I trust Nutmeg?

You can trust Nutmeg as they are regulated by the FCA and protected by FSCS up to £85,000, plus they have high-level banking-style security in place.

Is Nutmeg better than Moneyfarm?

Nutmeg offers more diverse investment options than Moneyfarm by providing a lifetime ISA (LISA) and charges lower rates in the account value range of £100,000 to £250,000.

Does Nutmeg protect your money?

Yes, your money is protected by Nutmeg due to their FCA regulation and their cover by the Financial Services Compensation Scheme.

Additionally, any uninvested cash is kept with Barclays Bank, which is segregated from Nutmeg’s and Barclays’ funds.

How do you withdraw money from Nutmeg?

Withdrawing money from Nutmeg is easy – sign in to your account and select ‘withdraw’ from the Payments menu on the left-hand side of the home page.

You’ll then need to follow the simple steps to complete your withdrawal.

Note that withdrawals are not currently available via the mobile app.