Innovations in Wealth Management Technology: Best European non-bank for innovation

Technology can help everyone access advice and build an investment portfolio, whatever their starting point.

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Nutmeg


Nutmeg is the vision of Nick Hungerford, a former stockbroker who recognized a gap in the UK wealth-management market. He was often asked by friends to manage their money but couldn’t because of his employer’s high minimum requirements. At the same time he noticed a lack of transparency when it came to investments.

In 2011 he started Nutmeg, an online investment management platform that aims to provide investment expertise at a low price to anyone with more than £1,000 to invest. It offers full transparency around the performance of its discretionary portfolios and has 35,000 customers.

Nutmeg

Customers can create a sample portfolio in just a few minutes by entering the amount they’d like to invest, how much they’re looking to accumulate, an investment timeframe and the level of risk they’d like to take. They are shown the kind of investment portfolio Nutmeg can build and fully manage on their behalf, always spread across asset classes, industries and sectors to manage risk and increase the potential for reliable long-term returns. Nutmeg customers have complete freedom and control of their accounts. They can change their profile and risk settings whenever they wish, top up ad hoc or regularly and withdraw money at no extra charge. They can also log-on at any time to see where their money is invested and how it’s performing.

Nick Hungerford, Nutmeg
Nick Hungerford, Nutmeg; expertise for all

Hungerford is a strong believer that digital wealth management services will take over from traditional private banks. He says it will not be only lower net-worth clients that use digital platforms while high net-worth individuals continue with traditional relationships.

"That’s a fallacy," he says. "We have customers with £1,000 and we have customers with £1 million. The service is high-end, but we’ve made it available to all, not just those with £500,000 to invest, as was the case in wealth management for so long. Quite simply, the established offline businesses won’t be able to compete, and that will become more and more transparent."

Hungerford adds: "[Wealth managers] are typically very large businesses, reliant on armies of salespeople and account managers and operational support staff. The new world is totally at odds with that kind of structure. It’s firmly focused on technology, user experience, product design, real-time analytics and social media. It’s about speed and transparency, high volume and low margin; it’s about engaging with the customer at every level."

That said, Hungerford believes there will always be some customers who prefer the traditional face-to-face relationship, "but it will be reserved for those who have the time, a very significant amount to invest and who prefer to discuss investment ideas and opportunities regularly with a wealth management professional, probably someone quite experienced in investing and business," he says.

Nutmeg