The past year has been a record one for the digital wealth manager. Might it just be a step closer to profitability?
Digital wealth manager Nutmeg saw a 72 per cent year-on-year growth in assets under management in the first three months of 2021, reaching a record £3bn.
Nutmeg clocked a £22m loss in 2019, the most recent available year of published accountants, but has been on an efficiency drive since Neil Alexander took over at the end of that year, as he told AltFi at last year's Digital Summit. It has also clearly benefited from the acceleration of fintech adoption by retail investors as well a greater interest in investing generally.
In the past year, Nutmeg has launched integrations with Starling Bank, Yolt, Emma and Money Dashboard enabling clients to see their Nutmeg investments alongside their other accounts. It also launched top-ups via open banking payments.
Nutmeg says it now has 130,000 UK investors, a 53 per cent increase in clients to over 130,000 compared to Q1 2020. Net inflows meanwhile soared 230 per cent, while revenue grew of 66 per cent, as the business moves closer to profitability.
Neil Alexander, chief executive officer, Nutmeg, says that with interest rates at historically low levels, and looking set to stay there for the foreseeable future, many people have either turned to investing for the first time or increased the amount they invest
“While the last year has been financially difficult for many people, we have also seen many new and existing clients who have been fortunate enough to have more disposable income as a result of reduced expenditure on leisure, hospitality, commuting and holidays,” he said.
”Nutmeg has been a beneficiary of this shift, welcoming tens of thousands of seasoned investors wanting to take advantage of a digital-first wealth management service, along with first-time investors looking for the support they receive from our wealth services team in helping them to achieve their financial goals,” the added.
Launched in September 2012, Nutmeg is now the UK’s fourth-largest wealth manager overall and one of the fastest-growing. It offers risk-targeted portfolios either in a fully automated fixed allocation range, fully managed - with discretionary intervention from portfolio managers - and a socially responsible range also. It offers ISAs and pensions as well as a general investment account. Fees are typically between 0.65 - 1 per cent.