Nutmeg review: A data-driven review of performance and services

This is a good option for investors with limited to no investment experience or knowledge, who still have a medium to high appetite for risk, as those are the portfolios that have historically outperformed competitor robo-advisors.

It’s also an easy option for saving for your first home via the Lifetime ISAs (Individual Savings Accounts) (LISAs) are designed to help you save for your first home or retirement and come with an automatic 25% government bonus on all contributions up to the value of £4,000. There are stocks and shares LISAs – where you invest your savings – and cash LISAs – where you earn interest on your savings. You must be between 18 and 40 to open a LISA and all income, capital gains and interest earned within LISAs is tax-free, although these funds can only be used to purchase your first home or for retirement. Ensure you are familiar with the rules surrounding this account before utilising itLifetime ISA.

While there is a simple service available complimentary from a wealth manager, those with more complex financial needs may benefit from the complete financial planning on offer, although this does come at a cost that is comparable to the industry average, and the advice is restricted, which means Nutmeg will only make investment recommendations on the products and services that they offer, and not the whole of the market.

In addition, if growing your money in a high-performing portfolio is a priority to you, then a robo-advisor would historically not have provided you with the best returns, as illustrated by the comparison of Nutmeg’s portfolio with the industry average.

Nutmeg offers an excellent range of accounts, with a special mention going to the Lifetime ISAs (Individual Savings Accounts) (LISAs) are designed to help you save for your first home or retirement and come with an automatic 25% government bonus on all contributions up to the value of £4,000. There are stocks and shares LISAs – where you invest your savings – and cash LISAs – where you earn interest on your savings. You must be between 18 and 40 to open a LISA and all income, capital gains and interest earned within LISAs is tax-free, although these funds can only be used to purchase your first home or for retirement. Ensure you are familiar with the rules surrounding this account before utilising itLifetime ISA, which not that many platforms offer. All these accounts are available with a starting amount of £500, which is higher than some platforms but on par with Moneyfarm.

General investment account (GIA)
As always, the General investment account (GIA) is an account designed to provide access to investments. You may be liable for tax on any income or capital gains earned within a general investment account but this can be a useful vehicle for anyone who has maxed out their ISA allowancegeneral investment account (GIA) is an excellent product for anyone who has maxed out their Sometimes called an investment ISA, a stocks and shares ISA is an individual savings account that allows you to invest in shares, unit trusts, investment funds, and bonds. You will not need to pay tax on any income or capital gains earned on investments within an ISAISA allowance. You still get access to all the investment options at Nutmeg, but where this account stands out from competitor GIAs, is its access to human advisors.

There are a few ways that this can be of value to investors. Firstly, they can help you establish whether you have already taken full advantage of all the tax allowances on offer to you and whether the GIA is your next best option. They also offer advice on Capital Gains Tax, and how the reduction to the allowance will impact you.

Stocks and shares ISA
All the usual ISA tax advantages are available, as well as full access to the Nutmeg A ready-made portfolio is a pre-made collection of investments that have been put together by investment experts. They are designed to be a simple option for those who don’t want to choose individual stocks or funds for themselves.ready-made portfolios. The team will help you decide if this is the best product for you and can help with any ISA transfers that you may wish to make.

Read more about ISAs

Junior stocks and shares ISA
A Junior ISAs (Individual Savings Accounts) (JISAs) are tax-free savings accounts for children under the age of 18. Only a parent can open a JISA but anyone can contribute. You can choose to save for your children through either a cash Junior ISA where you will earn interest on any cash in the account, or a stocks and shares Junior ISA where you will invest your child’s savings on their behalfJISA available to open on behalf of children under the age of 16. You can access all the investment options and expert advice on how best to grow your child’s money, taking into account how long they have before they reach the age of 18 and the account is automatically changed to an adult ISA.

Remember, however, that Nutmeg offers ‘restricted’ advice rather than independent advice. That means they will only make investment recommendations on the products and services that they offer.

Lifetime ISA
This is a Lifetime ISAs (Individual Savings Accounts) (LISAs) are designed to help you save for your first home or retirement and come with an automatic 25% government bonus on all contributions up to the value of £4,000. There are stocks and shares LISAs – where you invest your savings – and cash LISAs – where you earn interest on your savings. You must be between 18 and 40 to open a LISA and all income, capital gains and interest earned within LISAs is tax-free, although these funds can only be used to purchase your first home or for retirement. Ensure you are familiar with the rules surrounding this account before utilising itstocks and shares Lifetime ISA, a product less common but still the most efficient way to save for a first home. To see how the Nutmeg Lifetime ISA stacks up against all the other providers offering this product, see my Best Lifetime ISA article.

Read more about Lifetime ISAs

Pension
A pension can be one of the most valuable areas to seek human guidance and the Nutmeg pension offers just that. With a free call, the retirement experts can help you identify if this service would be of value to you. It comes at a cost (£900 – £1,350), but the upside of that is the peace of mind you will get knowing you are on track to achieving the retirement you want.

It’s a very tailored service but you should be aware that this is restricted advice. Meaning, that the advisors will only point you towards one of Nutmeg’s products, unlike an independent financial advisor, who can point you towards the best product for you from the whole of the market.

If you are going to pay for advice that will point you towards a Nutmeg pension, then it’s important to know that the pension you are matched with will perform well. Whilst the Nutmeg pension has performed better in the last year, the 3 and 5 year returns are very disappointing, which makes it difficult for me to recommend this platform for retirement savings. We would need to see some greater consistency for that to happen.

If you need more information about retirement, Nutmeg has a useful webinar available which will provide you with an overview of everything you need to know.

Read more about SIPPs

Portfolio performance
Below, I have compared Nutmeg’s portfolio performance against those of other robo-advisors to provide you with a like-for-like comparison. They have performed well for medium to high-risk investors. However, I must point out that, when compared to the A ready-made portfolio is a pre-made collection of investments that have been put together by investment experts. They are designed to be a simple option for those who don’t want to choose individual stocks or funds for themselves.ready-made portfolios from across the whole of the market, these are less favourable results. For more information about the whole of the market, please see our full, ready-made portfolio analysis.

Lowest risk portfolio for cautious investors – 5-year average 10.8%

Medium risk portfolio for confident investors looking for a balanced portfolio – 5-year average 22.8%

High-risk portfolio for adventurous investors – 5-year average 44.4%

It is worth noting that while Moneybox offers ready-made funds, they do not risk match you with a portfolio; the onus is on the investor to pick their own portfolio and in this way, they are not considered a traditional robo-advisor. However, I have included them as a high-returning alternative. Check out my Moneybox review here.

It’s worth noting that Nutmeg still underperforms one of its competitors in Moneybox across all risk types and time horizons. This indicates that there may be better options out there if investors are adamant on investing in ready-made funds.

Fully Managed
With ten risk levels to choose from, the fully managed option is provided for investors who would like the peace of mind of knowing that their investments are being constantly monitored and adjusted by industry professionals. You will be allocated a portfolio that consists of exchange-traded funds (ETFs).

Fixed Allocation
These portfolios will cost you less as they are designed to require human intervention just once a year. There are five risk levels to choose from here, with each portfolio consisting of ETFs again.

Fully Managed vs Fixed Allocation
You will pay slightly more to access fully managed portfolios on any platform so it’s important to establish whether the returns suggest this is worth the extra cost.

Our analysis comparing like-for-like risk portfolios in both categories suggested that fixed allocation portfolios actually outperformed fully managed portfolios at Nutmeg. So unless they can produce evidence to contradict this, I would stick with fixed allocation.

Socially responsible investing (SRI)
If investing in line with your principles is important to you, then the SRI portfolios are designed to include companies that consider the risks that come from environmental, social, and governance factors. You can still choose from 10 risk levels to match your appetite and historically, these portfolios have performed in line with their non-SRI counterparts.

Read more about ETFs

Thematic Investing
If you are comfortable assuming some level of risk (level 5 and above), then Thematic Investing allows you to gain exposure to emerging trends or themes that could be about to shape our future, and therefore offer greater opportunity for growth. This can include themes such as AI, clean energy, and healthcare.

The way this works is that the thematic theme you have chosen will represent a total of 10% – 20% of your total portfolio, depending on your level of risk, with the remaining portfolio being actively managed.

If you are in any doubt about whether this option is right for you, then the Nutmeg team is on hand to advise.

Thematic investing sounds like a good method for investors who don’t want to miss out on ‘the next big thing’. However, it’s worth noting that investing 10-20% of your portfolio in supposed ‘riskier’ assets could result in hefty losses. This may end up more than offsetting any gains made from the rest of your portfolio, as there’s no telling what sort of investments the Nutmeg team may make, whether it’s cash-generative companies, SPACs, or even potential scams.

Additionally, it should be worth noting that not every ‘theme’ has generated meaningful returns over the past decade either. The hype over blockchain technology, NFTs, and crypto might’ve resulted in extremely lucrative gains for some. However, many have also lost huge chunks of their money as a result of a lack of fundamental analysis, such as downside risk assessment, prior to investing.

Therefore, I’d advise potential investors who are thinking of getting into thematic investing to enquire about the sorts of investments the Nutmeg team plans to venture into before signing up for them.

Smart Alpha
The final option for investors is the Smart Alpha Portfolios, which are managed by JP Morgan Asset Management. These have been available since 2020, so no long-term portfolio performance is available, but Nutmeg promotes these portfolios as being managed in a way that can glean greater returns, while also including ESG is an investment approach that takes environmental, social and ethical governance factors into account alongside more traditional financial factors.ESG factors.

Without any significant historical data, it would be difficult to recommend these portfolios, given their slightly higher price. They are comprised mainly of JP Morgan ETFs with a small holding of cash.

Robo Advisory services
When you sign up for Nutmeg, you will instantly be taken to a questionnaire, which will help the platform establish an investment style that is right for you as well as how much you can afford to invest. You will also receive potential outcomes and a complete breakdown of costs. This is a nice level of transparency that you don’t always encounter.

Nutmeg provides an excellent user experience, with a clear, easy-to-navigate interface and plenty of options for managing your account.

Web platform

I found the web platform to be more user-friendly than the mobile app, despite their similarities. It’s easy to move funds between pots, although you will be waiting 3 working days for transactions to finalise, which is a long time for a robo advisor.

Mobile app

The Nutmeg app is clean and easy to navigate, although I have encountered complaints from other reviewers that it has taken on more of a corporate feel since the acquisition by JP Morgan.

I have worked out the actual cost (there are percentage costs below) for various-sized pots to give you a complete picture of how Nutmeg compares to other robo advisors and the sorts of costs you can expect to incur when you hold your investments with them.

As you can see, Nutmeg is coming out at a comparatively low cost in the robo-advisor space. If you consider the performance of their portfolios, then this makes for a compelling argument for Nutmeg to sit at the top of this platform category.

In terms of what you will be charged as a percentage, here’s a full breakdown of fees, including fund costs and market spread:

Please note: all published fees are correct at the time of publication. However, we suggest checking Nutmeg’s website for the most up-to-date figures.

There are several tools and guides available. It’s not a comprehensive offering such as you would find at a traditional investment platform, but for a robo-advisor, where you can access help with your investment decisions, it feels adequate.

Tools include:

• Self Employed Tax Calculator
• Compound Returns Calculator
• ISA Calculator
• Pension Calculator
• Capital Gains Tax Calculator
• Nutmeg Investment App Download

Guides include:

• New to investing
• Wills, Life insurance and Mortgages
• Investment Jargon Busting
• A guide to ETFs
• How to transfer an ISA
• Guide to ethical investing

This platform is so easy to use that investors with no experience looking to grow their wealth can tap into the actively managed portfolios and leave everything to experts.

If, as an investor, you get to the point where you would like more tools and research available, then it’s probably time to cash out and move to another platform that offers more of a hands-on experience. AJ Bell and Freetrade are both cost-effective solutions for intermediate investors.

All investing comes with the risk of losing some, or even all, of your money, although this is less likely with a fully diversified portfolio. However, what investors need to know is how safe their money is on the platform in question, and what would happen in the event of the platform going bust (this is a legitimate concern as platforms go bust more than you may think).

Nutmeg is one of the more secure options, largely due to its ownership by investment giant JP Morgan, which gives it great financial backing.

All appropriate levels of authorisation are in place via the Financial Conduct Authority and client funds are covered up to the value of £85,000 as part of their membership with the Financial Services Compensation Scheme.

Account Security
Accounts are fully secure, with memorable information and biometric authorisation.

Nutmeg has a dedicated section for education called Nutmegonomics. Sadly, this is limited to articles and blog posts, with a lack of any interactive experiences such as webinars, videos, or questionnaires.

Articles are separated into three main topics, including

• Financial planning
• Retirement
• Investing

It is worth keeping in mind that Nutmeg does offer human financial advice, and they are quick to say that this is available at any time to those who need it. However, in terms of furthering your education in investing, this is fairly limited, and the advice Nutmeg offers is ‘restricted’ rather than independent so it won’t cover every option on the market, just their own products.

There is a lot more content available on YouTube, where Nutmeg has regular updates from their investment desk, the factors affecting things like inflation, and what to expect from your portfolio. These are much more helpful than anything available on the website. However, given the lack of control that Nutmeg investors have over their investments, this could be redundant for many.

Excellent. Instant. Helpful. Everything you could want from customer service. The live chat is easy to access and you can expect immediate responses (or at least that was my experience).
I gave Nutmeg customer service the task of changing my original investment choice from the high-interest pot to the Level 10 portfolio. Claire pulled up my account in moments and advised me on how to make this happen.
Nutmeg has a ‘Great’ score of 3.8 from 1,856 reviews on Trustpilot.

As you would expect from this type of service, the account opening process is extremely quick and easy. Have your National Insurance Number to hand.

**Note – It takes 3 business days for funds to appear in your account at Nutmeg. This is significantly slower than at other platforms I have tested, most of which can facilitate instant deposits.

In the interest of giving my account time to demonstrate the functionality of the investment process, I have yet to withdraw my funds from Nutmeg. Therefore, I will return to the platform at a later date in order to document that process. In the meantime, I suggest you look at reviews on Trustpilot that mention withdrawals.

Have a question about Nutmeg that we haven’t covered? Ask it here and we will get back to you as soon as possible!

This review is the result of my first-hand experience as an account holder at Nutmeg and in no way represents financial advice.

If you’re looking for the best robo advisor, then head to my review of all the leading robo advisors, where I dissect each one and pitch them directly against each other to establish which one is offering the best service and, most importantly, which one would have made your money grow the most in the last 5 years, taking into account portfolio performance and fees.