In this Nutmeg review, we focus on the UK’s largest and most popular robo-advisor platform. With 140,000 clients, £3.5 billion under management and backing from JPMorgan, Nutmeg must be doing something right.
However, with so many robo-advisors out there, is this one for you?
Robo-advisors can help make your investing journey easy by automatically matching a portfolio to your investment goals. Sounds great, but there are some key differences which we will highlight so you can make a more informed choice.
Heads up – We aim to produce honest and accurate content, however, we are not financial advisors. If you need financial advice, Unbiased can connect you with a suitable professional for free. Some of our links may earn us a small commission to help us run the site.
Table of contents - quick links:
Who is Nutmeg?
Nutmeg was launched in 2011. Originally, its aim was to remove the exclusivity and lack of transparency typically seen in the world of investing.
Since 2011, Nutmeg has grown into the largest robo-advisor in the UK. It has £3.5billion under management and boasts 140,000 clients (of which I am one).
In June 2021, Nutmeg was purchased by JPMorgan for a reported £700m. In a statement released at the time, Nutmeg said it would form the basis of JPMorgan Chase’s retail digital wealth management offering internationally. Pretty lofty goals, but then Nutmeg does have a great track record.
Nutmeg special offer - zero management fees for six months!
If you are new to investing then check out our Investing for Beginners guide. It has everything you need to help you learn more about investing. Crucially, we cover the steps you should do before you start investing.
Robo-advisors are investing services that provide automated financial planning with little to no human supervision. A typical robo-advisor will collect information about your financial situation and goals. It will then use this data to automatically invest your money.
Essentially, it will automatically balance your portfolio according to your appetite for risk. So rather than making these dunting decisions yourself, you get to focus your time on what enjoy.
And that makes them well-suited to new investors who need help deciding an investment strategy and portfolio allocation.
Plus, they also work well for those who are time-poor and looking to offload their investing tasks and decisions.
And then there’s the cost. Before robo-advisor platforms, investors may have chosen an Independent Financial Advisor to manage their investments. These often carry hefty ‘management’ fees and would typically be more expensive (depending on lots of personal factors).
Is Nutmeg different?
Nutmeg has one of the largest ranges of accounts and portfolios available to investors.
Its offers everything from a cost-effective fixed allocation fund to the actively managed Smart Alpha fund.
Plus, Nutmeg has backing from one of the largest financial institutions in the world; JPMorgan. This makes it attractive to those seeking comfort from a well-known brand to store their wealth.
Performance-wise, as we will see further down, the majority of Nutmeg‘s portfolios have outperformed their comparative peers.
Like rival Moneyfarm, Nutmeg offers some financial guidance for free. This means you can speak to a human about your portfolio. However, the in-house Nutmeg team are limited to only talking about Nutmeg products and they cannot offer financial advice.
Most investors looking to shelter any gains from tax will choose a Stocks and Shares ISA account. Remember, you can only contribute to one Stocks and Shares ISA per year, so if you already have one then you’ll need to transfer your account to Nutmeg.
Alternatively, you can open as many General Investment accounts as you like. However, to keep managing your money easy, you may want to limit these to only a few, or what’s necessary.
Nutmeg offers one of the widest ranges of portfolios on the market.
First, you’ll need to choose if you want a fixed or managed portfolio.
A fixed portfolio carries the lowest annual cost and acts in a similar way as an index tracker. This type of portfolio fixes percentages of assets invested. This means the portfolio stays in the same investments no matter what the market is doing.
By comparison, the managed portfolios aim to beat the market by moving your money between assets types and reacting to a changing market. Managed funds require more work and so carry a higher cost.
Within each portfolio type, you will be able to choose the risk you want to take. The risk level varies between portfolio types between low or cautious and high or aggressive risk profiles.
When signing up for an account, Nutmeg will walk you through a series of questions to gauge your risk profile. This can always be adjusted at a later date.
Additionally, Nutmeg offers a fully managed socially responsible portfolio for those wishing to ensure their money has a positive impact. Unlike other providers, Nutmeg‘s platform fees for socially responsible portfolios are the same as their other managed funds, although the underlying funds do carry a premium.
Check out the new Smart Alpha portfolio from Nutmeg
First up is the platform fee of 0.75% per annum for the first £100k invested. This is the same fee for all managed portfolios. If you opt for the fixed portfolio, this fee drops to 0.45%.
Platform fees drop dramatically of investments above £100k. However, the reduction only applies to funds over the £100k mark. So your first £100k is always charged at a higher fee.
Next up is the fund fee. This covers the cost of the funds you invest in. Nutmeg‘s portfolios are made up of various funds so you could go off and build a similar portfolio yourself. However, the decision and management burden is then on you.
Finally, there is a market spread cost. This is the difference between what a fund can be bought and sold for.
The fees are detailed below to allow you to compare the different portfolios offered by Nutmeg.
Average investment fund cost
Average market spread
Total (up to £100k)
0.75% up to £100k, 0.35% beyond
0.75% up to £100k, 0.35% beyond
0.75% up to £100k, 0.35% beyond
0.45% up to £100k, 0.25% beyond
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Nutmeg fees vs Moneyfarm vs Wealthify
The table shows the fees charged on a £10,000 portfolio for three of the most popular robo-advisors. For the comparison, we have used the Nutmeg Smart Alpha portfolio.
While Moneyfarm‘s fees are the highest, they do drop as you invest more than £10,000. This puts the platform fee more in line with Wealthify for those with investments above £10,000.
Nutmeg, by comparison, only starts to lower its fees once your portfolio hits £100,000.
If fees were your primary focus, the Nutmeg Fixed Allocation portfolio would cost 0.72%. While this might be cheaper, you won’t get your portfolio actively managed, which is the trade-off.
For this comparison, we have used the Nutmeg Smart Alpha portfolio. This is the cheapest actively managed portfolio available from Nutmeg.
Nutmeg investment performance
Nutmeg publishes its performance against its peers. This data needs to be taken with a pinch of salt as it uses average competitor returns. This is a metric calculated monthly by Asset Risk Consultants (ARC) based on average returns from discretionary investment managers based on risk profile.
The historical returns should be used as a guide and do not indicate future performance.
Pretty much all of Nutmeg‘s portfolios have beaten the ARC peers performance. The higher risk portfolios have shown the greatest gains against their peers. Below is an example of the eight out of ten risk portfolio performance (ten being the highest risk)..
Nutmeg has received great reviews from independent review site Trustpilot. Its customers have awarded it 4.3 out of 5, which ranks it highly against its competition.
Also, Nutmeg has received great reviews for its app both from Apple and Android users.
As you would expect, the app is clean and easy to use. You can quickly see the performance of your investments and a clear breakdown showing how your money has been invested. However, as your funds are likely actively managed, you shouldn’t need to be in the app too often.
Customers’ assets are held securely and separately from Nutmeg’s assets. This means that even in the worst scenario of Nutmeg becoming insolvent, your money and assets would still be safe.
Nutmeg is a member of the UK Financial Services Compensation Scheme (FSCS), which means that in the unlikely event of a failure of Nutmeg, coupled with a failure to safeguard your assets or some other failure (such as negligent advice), the value of your assets held with Nutmeg may be protected by the FSCS up to the limit of £85,000.
Critically, you are NOT covered for investment losses, only if Nutmeg runs into financial difficulties.
What we like about Nutmeg
Hands-off – Nutmeg will take care of everything for you so you can set and forget your investments.
No exit fees – you can try Nutmeg out and if you don’t like it you can leave for free (some providers charge a fee).
Help choosing investments – for many new investors getting started can be tricky. Nutmeg guides you through a series of questions to help you get started easily.
User Interface – the Nutmeg user interface is modern, simple and easy to use. There’s no confusing charts or lingo. Just straightforward investing.
Sociably responsible investment options – an increasingly popular requirement from investors.
What we don’t like about Nutmeg
Fees – For me, Nutmeg’s 0.75% platform fee feels high compared to others in the market. This is particularly visible when the first reduction in these fees are when portfolios top £100k. Instead of a huge drop in fees at £100k, it would be great if the drops were smaller and sooner. This may help encourage investors with smaller portfolios.
Minimum investment – the £500 minimum investment may put those new to investing off. If you want to start with less, check out competitor Wealthify which has no minimum investment.
Nutmeg vs Moneyfarm vs Wealthify
There are a few main differences that may help investors choose between these very closely matched providers.
First is how much you plan to invest. Each platform has a minimum investment as you can see from the table below. Wealthify customers can open an account with just £1, whereas Nutmeg and Moneyfarm require a minimum of £500.
Next up is the advice on offer. Both Nutmeg and Moneyfarm offer some form of investing advice. Moneyfarm plays heavily on this by offering an investment consultant who can review your portfolio.
Critically, this is not regulated personal financial advice. If that’s what you are after then both Nutmeg and Moneyfarm can offer this, for a fee. Or you can find an Independent Financial Advisor through the Unbiased platform.
Finally, Nutmeg has the highest platform fees once you invest over £10,000. For comparison, Moneyfarm’s platform fee drops from 0.75% to 0.60% once you reach £10,000 and then again to 0.50% for investments over £50,000.
Nutmeg keeps the 0.75% fee all the way up to £100,000, after which it drops dramatically to 0.35%. Wealthify keeps its fee locked at 0.60% making it the cheapest for smaller portfolios.
Nutmeg, like other robo-investors, can reduce the complexity typically associated with investing. For those who are nervous about getting started or simply want a helping hand, Nutmeg can help set up your investments to match your goals.
If you do need personal financial advice, Nutmeg can provide this for an additional cost, giving you further reassurances, if required.
Critically, Nutmeg can help you get started and help develop your investing proficiency. If you have a busy life or if you have no interest in learning about investing, then a robo-advisor can help.
Overall, Nutmeg’s reviews, fees and performance make it very competitive against its peers. However, its fees make it slightly more expensive for smaller portfolios.
Of course, you can try Nutmeg for free for six months using our link below.
If you want to improve your personal finances or learn more about investing come join our Free UK Personal Finance Club over on Facebook. It’s a safe community of like-minded people all trying to improve their finances. I’d love to see you there.
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EatSleepMoney.co.uk does notoffer financial advice and is intended for reference/information only. Remember, you should always carry out your own research and/or take specific professional advice before choosing any financial products or services or undertaking any business or financial venture. If you need financial advice Unbiased can connect you with a suitable professional for free. Investments may go up as well as down and you may get back less than you put in.
I've spent years investing, saving and budgeting in order to build a better financial future for myself and my family. I bought and renovated my first home only to break even when I sold it. I've house hacked, been an accidental landlord and even considered living on a boat! All of this has led me to Eat Sleep Money, a site where I can share some of the tough lessons I’ve learnt over the years so you don't make the same mistakes.