Nutmeg to start financial advice pilot

Nutmeg to start financial advice pilot

Robo-adviser Nutmeg is piloting its advice service after working on it for almost three years.

The service will offer an initial conversation with an adviser free of charge but if its clients want a tailored recommendation this would cost £350, including VAT.

At first Nutmeg will only be piloting the service before launching it fully and the firm has said its advice offering will be "evolving" based on the feedback it receives.

Nutmeg revealed its plans to enter the advice market in 2015, with founder and then-chief executive Nick Hungerford saying this was the next logical step for the business.

Lisa Caplan, Nutmeg's head of financial advice, said: "Too few people know what sort of financial advice is available, how it could help them or where to find it. We want to change that and make financial advice accessible to more people.

"We’re assessing the same financial circumstances that a traditional financial adviser would, but by using technology we’re giving people the freedom to do it at a time that suits them at a fraction of the cost they’d face from an IFA.

"It’s little wonder that the UK is facing such an enormous savings gap when financial advice has been so slow to adapt to changing customer needs. In the next few years the way financial advice is given is going to radically change.

"People are used to interacting with technology to make so many aspects of their life easier, financial advice is no different. We’ll only be able to solve the advice gap with greater digitisation."

Nutmeg currently employs two financial advisers who will offer restricted advice but the company has said that if investing in general or with Nutmeg in particular was not the right option for a customer then it would advise clients accordingly.

The pilot has launched today and is not restricted to those who are already Nutmeg investors.

The company has said clients will be able to get started in just 15 minutes and will be able to speak to a professional adviser to get a personal recommendation.

The process will initially involve an online questionnaire about the client's finances and, if Nutmeg thinks the client could benefit from financial advice, it will have an initial conversation with them to make sure it understands the client's situation and goals.

If the client agrees to go ahead Nutmeg will follow this up with a written report, outlining its advice which it will also talk through over the phone.

While Nutmeg is the largest British robo-adviser in the market, with assets of more than £1.5bn and more than 60,000 customers, it has struggled for profitability as it has been growing its business.

Losses have mounted up year after year and during 2017 the company, which is backed by Schroders among others, posted a loss of £12.3m.