Nutmeg Investments Review 2018

By Claire Boyte-White  | January 11, 2018

Nutmeg is a UK-based online brokerage taking the guesswork out of investing by offering simple, professionally built portfolios of ETFs.

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Overall Rating

Nutmeg Fast Facts

Founded in 2011 by Nick Hungerford and William Todd, Nutmeg was created specifically to bring investment opportunity to the wider population. Frustrated with the jargon and red tape in the investment industry, Nutmeg's founders worked to build a brokerage that was transparent, accessible, and affordable. Depending on how much guidance you want, and how much you want to spend, you can choose from a fully managed portfolio or a fixed-allocation package portfolio. While the former includes ongoing professional assistance from the Nutmeg team, the latter is sometimes cheaper, set-it-and-forget-it option that does not include ongoing strategic management. By focusing only on managed portfolio products, Nutmeg takes the guesswork out of investing. Whether investors are looking for general, ISA (savings) or retirement investing, Nutmeg has simple options that allow you to invest in professionally crafted portfolios of ETFs.

pros

  • Simple and Quick
    Two professional portfolio options makes investing a snap; Nutmeg can help you get a portfolio up and running in just 10 minutes
  • Affordable
    You can start investing in a Lifetime ISA for as little as 100 GBP, with other account types starting at 500 GBP
  • Low Cost
    ETF-based portfolios mean lower annual fees across the board
  • Diversified
    Since most portfolios are ETF-based, every investment is automatically diversified across markets, assets, and industries

cons

  • Minimal Choices
    Not ideal for those who want to pick and choose their own investments
  • ETFs Primarily
    Nutmeg portfolios do include individual stocks, bonds, or other assets but are mostly ETFs
  • Monthly Deposits Required
    General investing and standard ISA accounts require a 100 GBP per month recurring deposit
2011
Founded
Headquartered in Vauxhall, London, UK
1 Billion
Assets Under Management
Awards
Best Robo Advisor and Best ETF Advisor,
ETF.com Awards 2016

Fees & Products

Because Nutmeg offers only two different portfolio options, their pricing structure is pretty straightforward. Nutmeg never charges set up, exit, withdrawal, or transaction fees. Instead, Nutmeg calculates its management fees daily, based on annual rates, and deducts the appropriate amount each month.

While fees come along with any investment, regardless of brokerage, Nutmeg tries to minimize those costs as much as possible. The primary way they cut costs for investors is by focusing on ETFs. Because ETFs are a highly liquid asset that can be traded easily on the secondary market, they carry much lower fees than mutual funds, while providing the same diversification and a lot more flexibility. ETFs are also a much cheaper way to gain exposure to specific assets, like stocks and bonds, without the trading commissions that come along with buying individual shares. Nutmeg's focus on ETF-based portfolio investing is part of their commitment to bringing affordable, transparent investing to the masses.

Average total annual fees will be lower with investments over 100,000 GBP because of lower Nutmeg fees. An investment of 100,000 GBP or less will incur total fees of 1.05% (fully managed) or 0.75% (fixed allocation). An investment of 200,000 GBP results in an average annual fee of 0.85% (fully managed) or 0.65% (fixed allocation).

Account Minimums:

- Lifetime ISA: 100 GBP
- General Investing and Standard ISA: 5,000 GBP, or 500 GBP, with recurring 100 GBP monthly deposit
- Pension: 5,000 GBP

  • Fully Managed Portfolio*
    0.75% Annually
  • Fixed Allocation Portfolio**
    0.45% Annually
  • Stock/ETF
    Not Available
  • Foreign Stock
    Not Available
  • Options
    Not Available
  • Cryptocurrency
    Not Available
  • Penny Stocks
    Not Available
  • IPOs
    Not Available
  • Futures
    Not Available
  • Preferred Shares
    Not Available
  • Mutual Funds
    Not Available
  • Annuities
    Not Available
  • Bonds & Fixed Income
    Not Available
  • Forex
    Not Available

Trust

Nutmeg is a UK-based brokerage. However, investor funds are still protected. Nutmeg uses two custodian banks, State Street and Barclays, to ensure that client funds are secure; Nutmeg users can rest assured that their funds are never comingled with bank or Nutmeg assets or lent out to a third party. In addition, Nutmeg participates in the UK's Financial Services Compensation Scheme, which covers invested funds and cash deposits.

Investments Insured up to 50,000 GBP
Default Insurance (If Nutmeg defaults)
(Nutmegs use of two custodian banks, State Street and Barclays ensure users funds)
Cash Deposits Insured up to 85,000 GBP
Default Insurance (Failed Bank)
(UK's Financial Services Compensation Scheme covers invested funds and cash deposits)

What you need to know

In addition to ensuring that client's accounts are secure and insured, Nutmeg takes online security very seriously. Easily accessible terms and conditions allow users to read exactly how their personal data will be used. The website also uses cookies and TLS encryption to keep your online transactions secure, as well as two-step authentication so you can double up on account protection.

Special Features

Nutmeg special features

Because Nutmeg does not offer self-directed trading, it doesn't provide the types of features of a full-service brokerage. Instead, the Nutmeg website is focused primarily on educating investors on their different products and encouraging clients to choose a portfolio that suits their specific needs and risk tolerance.

Automated or Managed Trading
Invest Virtually Effortlessly*
(*with the option of automation or management)
Pension Calculator
Save for Retirement
(Determine how much to invest to meet retirement income goals)
24/7 Account Access
Trade on the Go
(Monitor your investment performance online or via app, any time)

What you need to know

The Nutmeg products are not self-managed, so you won't find features and tools like backtesting or advanced trading platforms. Instead, they offer automated portfolio investments that take the guesswork out of investing. The calculators and educational tools on the website help investors determine how much they need to invest to reach their goals, and what type of investments are best suited to their risk tolerance. From there, the pros at Nutmeg build a suitable ETF-based portfolio. The real special feature of the Nutmeg offering is the automated rebalancing. Once a client has determined their goals and risk tolerance, Nutmeg's hands-free investment model does the rest.

Desktop Experience

Because Nutmeg's model does not include self-directed investment, the company does not offer a desktop or mobile trading platform. While clients can access their accounts online or via app 24/7, there are no charting or fundamental analysis tools available. Instead, clients can view performance, make deposits or withdrawals, and communicate with their investment manager.

Mobile Experience

Mobile Platform Experience

The Nutmeg app, available for both iOS and Android, is simple, streamlined, and efficient. Users can access their accounts at any time, deposit funds, check on performance, or view the Nutmeg help guide. However, the apps have fewer functions than the site, so users will have to login on a computer or via the mobile site for some things.

Pros

The primary benefit of the Nutmeg mobile app is that it allows users to easily check their investment performance on the go. Whether you have one investment, called a 'pot', or several, you can quickly view your entire account with one easy click. You can also make deposits to any number of pots and quickly access articles in the Nutmeg guide that will answer questions about how the app works, when deposits and withdrawals will be available, and other common questions.

Cons

While the mobile app is undoubtedly useful, it does not allow users to make account withdrawals. Nutmeg users must also use the web-based account platform to contact the customer service team or access online account support. The simplicity of the Nutmeg model is its chief benefit, but for those looking for a full-service app, or a full-service brokerage, Nutmeg won't be the right fit.

Customer Support

Since providing full-service portfolio investments is their bread and butter, Nutmeg prioritizes customer service. With numerous ways to contact support staff, Nutmeg makes it easy for clients to get in touch, though they do not provide 24-hour support.

What you need to know

Nutmeg remains a smaller outfit than other brokers, despite their huge asset total and worldwide acclaim. The brokerage does have a dedicated support team, but phone lines and email are only staffed Monday to Friday, 9am to 5:30pm GMT. Similarly, the Nutmeg site does provide a live chat feature, but messages sent outside of normal UK business hours will be directed to an email address and answered on the following business day.

Research & Insights

Again, the fully managed focus of the Nutmeg offering means there isn't much in the way of research tools on the site. While Nutmeg does provide information on the various ETFs included in their investment portfolios, there aren't charting or fundamental analysis resources, because clients don't do that work for themselves. While you won't find the standard research or insight tools on the Nutmeg site, you will find one calculator aimed at helping clients determine how much they need to invest in order to reach their retirement goals. The Nutmeg blog also provides various articles focused on current political and economic events and how they may impact client investments. So, while this is by no means a full-service brokerage, it does provide the types of research and insights that Nutmeg's target clientele would find most useful.

Portfolio Building
Find out how Nutmeg builds portfolios with appropriate asset allocation
Nutmegonomics Blog
Articles on market outlooks, Nutmeg performance, economic and political events
Pension Calculator
Determine how much to invest to meet retirement income goals
Investment Breakdown
Learn about the ETFs Nutmeg invests in and why; whether its 'Intelligent & diversified' or 'Low cost' portfolios
Track Record
See how Nutmeg's portfolios have performed over time

Pros

Like the mobile app, Nutmeg's website is simple and easy to use. While it does not offer a robust selection of research tools like other online brokerages, this may actually be a big plus for Nutmeg's target audience. Without the charts and ratios found on other brokerage websites, users can avoid the dreaded 'analysis paralysis.' Nutmeg was built to provide easy-to-understand, built-to-order investments at reasonable prices, so clients don't need to do a ton of research on their own. What's more, with ETF's forming the vast majority of every portfolio, it would be unnecessary - even distracting - to have options chains, bond info, or charting and fundamentals for every ticker.

Cons

Though the purpose of the Nutmeg product is to take the guesswork out of investing, some investors may be annoyed by the lack of data. While portfolios are ETF-based, some users may want to dive into the individuals securities held by those ETFs, and that kind of background data is where Nutmeg's research suite falls short. For investors who want to have technical and fundamental data at their fingertips, even for fully managed accounts, the Nutmeg platform will likely prove frustrating.

Education

While Nutmeg's research tools may be underwhelming, the educational resources provided on the website are much more robust. Between the Support page and the Nutmeg blog, both potential and existing clients can easily learn all they need to about the Nutmeg ethos, past performance, and how to get the most out of the Nutmeg model. Since ETFs are the basis for the Nutmeg investment model, users will also find ample resources aimed at helping investors understand the ins and outs of ETFs, why they are a cost-efficient security, and how to best utilize different ETFs to achieve investment goals.

Learn about ISA Savings Accounts
ISA Education
Read up on different ISA types and which is best for you
Monthly Blog Posts keep users up-to-date
Retirement Planning
Learn about Nutmeg performance and outlook
Trade Examples
Monthly Updates
In-depth visual and written content on real-life trades and strategies
Learn to Invest
Guides to Investing
Four lessons explain different securities, benefits, and risk

What you need to know

While the Nutmeg blog is a great resource for new content and market analysis, the Support page offers useful articles and videos on investing basics, website navigation, account requirements, and investment strategy. While most of the securities education is focused on ETFs, the 'New to Investing' lessons also cover other common investments, like stocks and bonds. What's more, in Nutmeg's quest to be a fully transparent brokerage, they've gone above and beyond in terms of highlighting and explaining investment risk. Both the blog and Support page are easy to navigate and fully searchable, making it easy to find the information you need to make educated investment decisions, whether you're a Nutmeg client or not.

Bottom Line

For investors looking for all the bells and whistles, Nutmeg will fall short. It doesn't have the wide range of products you'll find at larger brokerages like Charles Schwab or E*Trade, or all the tools and features of day trading-focused platforms like Lightspeed. However, this UK-based company wasn't built to compete with the big DIY investing powerhouses. Instead, Nutmeg's founders wanted to provide accessible, affordable package investments - without all the jargon and analysis. Nutmeg's products are built for people who want to put their money to work with the knowledge that their investments have been hand-picked by professionals. Nutmeg keeps management costs low by building portfolios of ETFs, rather than individual stocks and bonds. With no transaction, trading, setup, or exit fees, account minimums starting at just 100 GBP, and easy account set up in 10 minutes, Nutmeg's product is an easy choice for investors looking for an affordable, no-muss-no-fuss option.

Claire Boyte-White
Reviewed by Claire Boyte-White

  • • Investopedia Contributor since 2014
  • • Lead Writer for NapkinFinance.com
  • • Co-Author of I Am Net Worthy, a Millennial-focused book on financial independence

Experience

Claire has been writing about personal and corporate finance, retirement planning, investing, and tax policy since 2013.

Claire believes that financial literacy resources and investing education should be readily available to everyone, so she enjoys making complex topics accessible and engaging. Her keen attention to detail and head for numbers have made her a perfect fit for Investopedia.

Education

Claire received her Bachelors from Willamette University with a degree in Psychology.

Quote from Claire

"I know many people find investing and financial topics overwhelming. As our cultural and economic landscape continues to change rapidly, it's more important than ever for everyone - from new college grads to retirees - to feel comfortable and competent when it comes to financial planning. I consider my role in the industry to be that of a facilitator: breaking down intimidating concepts and making financial literacy accessible to all."

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