Nutmeg will offer ‘human’ advice after FCA approval

Nutmeg will offer ‘human’ advice after FCA approval

The Financial Conduct Authority has given Nutmeg permission to offer regulated financial advice.

Although no date has yet been set for Nutmeg to launch a financial advice business, chief executive Nick Hungerford said his firm plans to avoid using robo-advice solutions and instead rely on human advisers.

“Being able to offer financial advice opens up a wide range of potential opportunities for customers, and we are working as accurately as we can to define and deliver these,” Mr Hungerford said.

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“When we launch our advice service, it is not going to be robo, it is going to be human advisers to program our system to deliver the best advice.

“In the same way as we have human teams actively managing our investment portfolios, we will have human advisers, just fronted up in a different way to one-to-one meetings.”

Nutmeg first announced its intention to provide financial advice last August (2015), with Mr Hungerford telling FTAdviser it was the logical “next step” in the firm’s journey.

He added that customers often ask for advice, but so far it is something the investment platform has been unable to provide.

In October 2015 Nutmeg reported a £5.28m loss for 2014, up from the £3.6m loss reported for 2013.

Mr Hungerford, who is on the Financial Advice Market Review expert panel, said significant investment continued to be made in infrastructure, so that the business can scale cost-effectively to deliver long-term profitability.

The results came just after Gina Miller, founder of investment manager SCM Group, said Nutmeg was already giving financial advice.

Mr Hungerford said his business was a discretionary investment manager that currently did not give investment advice.

Adviser view

AJ Somal, IFA at Aurora Financial Planning, said: “At Aurora, we do welcome competition, and any company bringing new things to the market is good.

“I don’t think Nutmeg will be in direct competition with IFA companies specialising in high net assets, but they will definitely appeal to more technically literate and younger clients.”