Nutmeg online investment - opinions?
Discussion
JulianPH said:
Having taken £116m of institutional and venture capital they have now announced they are resorting to crowd funding:
https://www.professionaladviser.com/professional-a...
No one raises institutional city money and then resorts to crowd funding, it happens the other way round.
This tells me that whilst they continue to burn through money loosing millions of pounds a year the original backers have said enough is enough.
So if they run out of money & can't raise any more what happens to investors money??https://www.professionaladviser.com/professional-a...
No one raises institutional city money and then resorts to crowd funding, it happens the other way round.
This tells me that whilst they continue to burn through money loosing millions of pounds a year the original backers have said enough is enough.
GT03ROB said:
So if they run out of money & can't raise any more what happens to investors money??
That’s all seg client money and wholly separate from the business. If they close then the client accounts will get migrated to a new provider typically. The robo investor concept is really good but the problem is that you need absolutely enormous numbers of clients to achieve sufficient AUM to make a profit. I think what Nutmeg shows is that the cost of small client acquisition and ongoing maintenance is greater than the revenue generated from the client.
I suspect their original investor business plan was to take huge market share, enough to become an annoyance to other firms so that they got bought out.
Crowd funding is a good product for this type of business because it carries with it a big direct marketing element to your target client base but as Julian mentions doing it this way around gives one the impression that Plan A hasn’t been achieved and they are onto Plan B.
None of which should in theory bear any relevance as to whether they offer a good investment product. If anything the fact that they are seemingly still needing to raise capital might suggest that they are selling their product well below market value which represents an opportunity to clients in comparison to their alternatives?
petemurphy said:
seems a lot of love for vanguard on here?
Vanguard has low fees, and offers products like Lifestrategy, which on average might be expected to outperform active funds with a similar risk profile, simply because of the lower costs.They're a very reasonable vanilla choice if you've got no specific investment you're "set" on.
What's not to at least like, if not love - they're the investment brunette rather than redhead.
Don't forget you could potentially put the money into an ISA and leave it uninvested if you're concerned about exchange rate volatility in the short term.
xeny said:
Vanguard has low fees, and offers products like Lifestrategy, which on average might be expected to outperform active funds with a similar risk profile, simply because of the lower costs.
They're a very reasonable vanilla choice if you've got no specific investment you're "set" on.
What's not to at least like, if not love - they're the investment brunette rather than redhead.
Don't forget you could potentially put the money into an ISA and leave it uninvested if you're concerned about exchange rate volatility in the short term.
"Don't forget you could potentially put the money into an ISA and leave it uninvested if you're concerned about exchange rate volatility in the short term."They're a very reasonable vanilla choice if you've got no specific investment you're "set" on.
What's not to at least like, if not love - they're the investment brunette rather than redhead.
Don't forget you could potentially put the money into an ISA and leave it uninvested if you're concerned about exchange rate volatility in the short term.
very good point thanks
chum recommended bestinvest.co.uk any views on it anyone?
DonkeyApple said:
The robo investor concept is really good
I disagree. They have focused on the money rather than the person. This is where the future is IMO. https://investor.vanguard.com/advice/personal-advi...
Derek Chevalier said:
DonkeyApple said:
The robo investor concept is really good
I disagree. They have focused on the money rather than the person. This is where the future is IMO. https://investor.vanguard.com/advice/personal-advi...
I’m sure you have a minimum portfolio size where you know your fees are not enough to warrant your time. Below that natural level the robo product has a place and I do think a value. It’s for consumers with a few pounds a month that they want to invest without having to make any decisions. But for a provider they obviously need enormous numbers of clients and I suspect the cost of acquisition is greater than the potential revenue?
DonkeyApple said:
Derek Chevalier said:
DonkeyApple said:
The robo investor concept is really good
I disagree. They have focused on the money rather than the person. This is where the future is IMO. https://investor.vanguard.com/advice/personal-advi...
I’m sure you have a minimum portfolio size where you know your fees are not enough to warrant your time. Below that natural level the robo product has a place and I do think a value. It’s for consumers with a few pounds a month that they want to invest without having to make any decisions. But for a provider they obviously need enormous numbers of clients and I suspect the cost of acquisition is greater than the potential revenue?
"To take advantage of Vanguard Personal Advisor Services, a $50,000 minimum is required."
Below that threshold I'm still not convinced that the robo crowd offer anything over buying a low cost globally diversified fund - especially if you look at the performance numbers of some of the robo offerings. They do some form of risk questionnaire, but how much use is that without someone to question the output?
petemurphy said:
Hi,
Any more thoughts about nutmeg? Looking at 20k in an isa before tax year runs out
thanks
I'm looking at a whopping 4.28% ROI since I started in March 2017 on risk level 7. Any more thoughts about nutmeg? Looking at 20k in an isa before tax year runs out
thanks
I guess it's a better rate than the banks give you but not setting the world alight. I might chuck a bit more in there as it's better than nothing and i'm fairly confident that one day I won't log in and see i'm down 50%.
Derek Chevalier said:
If you look at the Vanguard offering (still only U.S. based, but think it will create waves when it comes over here) they will take people with $50k USD/£40k GBP. Appreciate it's a restricted offering, but their products are well regarded.
"To take advantage of Vanguard Personal Advisor Services, a $50,000 minimum is required."
Below that threshold I'm still not convinced that the robo crowd offer anything over buying a low cost globally diversified fund - especially if you look at the performance numbers of some of the robo offerings. They do some form of risk questionnaire, but how much use is that without someone to question the output?
I think what the robo product offers at this level is a total fire and forget product for people who have a little bit of money, want to save it but absolutely, manifestly do not want anything to do with having to pick any investments themselves. I don’t think that the majority of investors at this level want to make their own investment decisions on the whole. They don’t want to go through a list of funds and attempt to pick one. After all, a lot of investors with a lot more money don’t want to either but have the means to justify bespoke advice. "To take advantage of Vanguard Personal Advisor Services, a $50,000 minimum is required."
Below that threshold I'm still not convinced that the robo crowd offer anything over buying a low cost globally diversified fund - especially if you look at the performance numbers of some of the robo offerings. They do some form of risk questionnaire, but how much use is that without someone to question the output?
Maybe this form of robo investing won’t survive but I think that as an overall concept it is here to stay and fills a huge gap in the market just because most people can not afford traditional advice while at the same time they don’t want to be doing their own investment.
GT03ROB said:
JulianPH said:
Having taken £116m of institutional and venture capital they have now announced they are resorting to crowd funding:
https://www.professionaladviser.com/professional-a...
No one raises institutional city money and then resorts to crowd funding, it happens the other way round.
This tells me that whilst they continue to burn through money loosing millions of pounds a year the original backers have said enough is enough.
So if they run out of money & can't raise any more what happens to investors money??https://www.professionaladviser.com/professional-a...
No one raises institutional city money and then resorts to crowd funding, it happens the other way round.
This tells me that whilst they continue to burn through money loosing millions of pounds a year the original backers have said enough is enough.
Ginge R said:
I’m certain that Julian, authorised and regulated as he is, did not mean to potentially undermine public confidence in another authorised and regulated company. Perhaps he would like to come along and offer some clarity to his comments.
I'm not interested in what the FCA may or not may approve of. What he said was fair comment from my point of view.DonkeyApple said:
I think what the robo product offers at this level is a total fire and forget product for people who have a little bit of money, want to save it but absolutely, manifestly do not want anything to do with having to pick any investments themselves. I don’t think that the majority of investors at this level want to make their own investment decisions on the whole. They don’t want to go through a list of funds and attempt to pick one. After all, a lot of investors with a lot more money don’t want to either but have the means to justify bespoke advice.
Maybe this form of robo investing won’t survive but I think that as an overall concept it is here to stay and fills a huge gap in the market just because most people can not afford traditional advice while at the same time they don’t want to be doing their own investment.
The problem with it is.... it's not really fire & forget & looking at the number of threads on here people will simply end up having to decide which robo fund to pick so they will have to make their own investment decisions. So you end up back to square one. Further people that invest in these sort of things without really understanding what they are doing will end up very disappointed a few years down the line when their investments have not returned in line with their expectations. Maybe this form of robo investing won’t survive but I think that as an overall concept it is here to stay and fills a huge gap in the market just because most people can not afford traditional advice while at the same time they don’t want to be doing their own investment.
I agree with Donkey and Derek. The issue, as I see it, isn’t so much ‘robo’; rather, the execution. You can buy a car on eBay unseen, from a showroom or by pcp etc, from an online broker. You decide what’s best for you and you choose your medium.
As I see it, the biggest issues facing robo are, how do you identify client vulnerability, what do you do with those clients you decline (my robo was more a hybrid). Robo itself, is just a medium. It’s the execution and engagement that’s important.
Arguing about robo per se, is like arguing about whether there’s a place for online brokers, showrooms or eBay. What we should be doing is saying, whatever the route to market, how do we make sure a family man isn’t being sold a complete s
tter of a twenty year old MX5.
There will come a point when fund management is free, or as near as damnit, close to it.
As I see it, the biggest issues facing robo are, how do you identify client vulnerability, what do you do with those clients you decline (my robo was more a hybrid). Robo itself, is just a medium. It’s the execution and engagement that’s important.
Arguing about robo per se, is like arguing about whether there’s a place for online brokers, showrooms or eBay. What we should be doing is saying, whatever the route to market, how do we make sure a family man isn’t being sold a complete s
tter of a twenty year old MX5. There will come a point when fund management is free, or as near as damnit, close to it.
GT03ROB said:
without really understanding what they are doing will end up very disappointed a few years down the line when their investments have not returned in line with their expectations.
That could sum up many aspects of the Millenial outlook. 
I do agree with what you are saying but even if the returns are sub standard it still gets people saving and locking money away instead of spending. And it does so in a structure that is simply more appealing to a huge demographic.
Ginge R said:
I agree with Donkey and Derek. The issue, as I see it, isn’t so much ‘robo’; rather, the execution. You can buy a car on eBay unseen, from a showroom or by pcp etc, from an online broker. You decide what’s best for you and you choose your medium.
As I see it, the biggest issues facing robo are, how do you identify client vulnerability, what do you do with those clients you decline (my robo was more a hybrid). Robo itself, is just a medium. It’s the execution and engagement that’s important.
Arguing about robo per se, is like arguing about whether there’s a place for online brokers, showrooms or eBay. What we should be doing is saying, whatever the route to market, how do we make sure a family man isn’t being sold a complete stter of a twenty year old MX5.
There will come a point when fund management is free, or as near as damnit, close to it.
I think that if the robo concept is a solution for those who have savings too low to be viable to an IFA then it is not commercially viable to run such a model with an advisory element. It has be run as a self execution. It simply takes the age of the person and puts them into a one size fits all bucket and the client is automatically migrated over to other buckets over time as they age. And it can only really be viable as a bolt on product to another core service that is more profitable and in greater demand. I suspect that the type of firm that could make it work down the line will be firms like Revolut and their ilk. The cost of client acquisition for a stand alone is too big for the revenues it can generate so it needs to piggyback off an existing client base. As I see it, the biggest issues facing robo are, how do you identify client vulnerability, what do you do with those clients you decline (my robo was more a hybrid). Robo itself, is just a medium. It’s the execution and engagement that’s important.
Arguing about robo per se, is like arguing about whether there’s a place for online brokers, showrooms or eBay. What we should be doing is saying, whatever the route to market, how do we make sure a family man isn’t being sold a complete s
tter of a twenty year old MX5. There will come a point when fund management is free, or as near as damnit, close to it.
GT03ROB said:
DonkeyApple said:
I do agree with what you are saying but even if the returns are sub standard it still gets people saving and locking money away instead of spending. And it does so in a structure that is simply more appealing to a huge demographic.
Can't disagree with that.Ginge R said:
GT03ROB said:
JulianPH said:
Having taken £116m of institutional and venture capital they have now announced they are resorting to crowd funding:
https://www.professionaladviser.com/professional-a...
No one raises institutional city money and then resorts to crowd funding, it happens the other way round.
This tells me that whilst they continue to burn through money loosing millions of pounds a year the original backers have said enough is enough.
So if they run out of money & can't raise any more what happens to investors money??https://www.professionaladviser.com/professional-a...
No one raises institutional city money and then resorts to crowd funding, it happens the other way round.
This tells me that whilst they continue to burn through money loosing millions of pounds a year the original backers have said enough is enough.
Gassing Station | Finance | Top of Page | What's New | My Stuff