In Focus: Profitable advice business  

Nutmeg losses climb 28% after JPMorgan takeover

Nutmeg losses climb 28% after JPMorgan takeover

Nutmeg’s losses after tax climbed 28 per cent in 2021, the year it was acquired by JPMorgan and underwent a rebrand.

In full accounts published on Companies House on June 10, the investment platform posted a £19.3mn loss after tax, an increase on the £15mn of losses it posted the previous year.

The uptick in losses reflected a similar increase in operating losses, from £16.6mn in 2020 to £20.4mn in 2021, a difference of 23 per cent.

Operating expenses also climbed by 39 per cent, from £26.9mn to £37.3mn. The number of employees remained the same over the year, fluctuating by just one employee, from 162 to 163.

Despite its losses, the platform’s turnover jumped 70 per cent, from £12.7mn in 2020 to £21.6mn in 2021. Net assets also increased by a similar 63 per cent, from £28.9mn to £47.2mn.

Although this was following a £30mn fund raise by JPMorgan in October which were cited in the firm’s accounts.

The firm’s directors said they had stress tested the platform in a scenario where macroeconomic pressures stressed market performance and customer growth rates for an extended period. 

“No scenario where the company was stress tested resulted in an inability to meet its medium-term cash requirements,” the company said in its full accounts.

“The directors also have a number of contingency measures available should the company encounter financial stress in the future, including reducing discretionary spending in marketing and R&D [research and developments] and further fundraising.”

Nutmeg underwent a brand refresh last year when it made changes to its website following its takeover by JPMorgan.

Some advisers likened the website refresh to Netflix show Squid Game due to the similarity between circle, square and triangle symbols used.

A spokesperson for Nutmeg told FTAdviser at the time it had been working on its rebrand “for many months” before it went live in October.

The investment platform’s new look included a new logo, new typeface and colour scheme, a new website, and new email templates, which it said reflected new investment styles, tax wrappers, and payment methods.

“Our clients have grown up as well,” it said in a blog post published at the time.

Last year (August 2021), retail giant John Lewis Partnership teamed up with Nutmeg to launch three retail investment products.

Prior to this, Nutmeg created a team called Wealth Consultants to help clients with more complex needs but who do not need advice.

The team does not give regulated advice but runs alongside the advice team, which has also been expanded recently and has started giving advice via video call on top of its telephone-based service.

ruby.hinchliffe@ft.com