The rise of fin tech industries has given many businesses and startups greater flexibility when it comes to making the most of their finances. Companies like Nutmeg are generally available online and can provide investment opportunities that give SMEs more control along with ease of use. Finding the right robo advisor and investment site is crucial if you want to make the most of your excess capital and get a good return for your business or startup.

What is it?

Nutmeg is essentially an investment platform that allows users to build and manage investment portfolios for a low cost. You can determine your own level of risk and put money into funds accordingly. Provision includes what the company call smart ISAs and pensions, combined with expert portfolio management from the team at Nutmeg.

The company boasts a diverse and robust portfolio that may interest many SMEs and startups who want to ensure the growth of their financial assets, though there is risk involved as with any investment strategy. One of the attractions of sites like this is the low cost of investing which means you can save more money. Another plus point is there is no lock into a long-term arrangement.

How to use Nutmeg

You need a minimum of £500 per fund to invest in Nutmeg, plus the ability to make further monthly contributions. The site is easy to navigate and use and the help line has a good record of dealing quickly with any queries or problems. The staff at Nutmeg get to know you through your online application and then begin building a portfolio for you depending on your answers. The company use a range of Collective Investment Vehicles, including equities and bonds.

Once your portfolio has been set up, Nutmeg monitors it and make adjustments to maximise performance. This is done in relation to your risk level and your end objectives. You can withdraw money at any time and there is no long-term commitment required to stay with the company.

The pros of using Nutmeg

  • If you’re looking for discretionary wealth management, then Nutmeg offers a broad portfolio of investments with the chance to secure your level of risk
  • The company is committed to helping investors find the mix that works for them rather than supplying a one size fits all solution
  • Nutmeg categorise your investing personality on a 10-point scale from cautious to risky depending on how you answer their questions
  • For both ISAs and pensions you get a clear idea where your money is being invested and these are constantly reviewed for best performance
  • You can split your investments for different purposes. So if you want to build a pot towards retirement or create capital for new business premises or an entrepreneurial venture you can
  • For pension funds you can get a 25% government tax relief top up when you put in contributions each month
  • Nutmeg offer competitive fees compared to some other players in the market and this will benefit your investment
  • The ability to withdraw finances as and when you need them is also an attractive proposition for startups and SMEs who have capital to secure
  • Nutmeg provides a good deal of help and advice to their investors including online YouTube videos
  • The reviews of Nutmeg on sites such as TrustPilot are generally good and give it a high rating. Most people comment on the ease of use and decent returns as long as you stay the course

The cons of using Nutmeg

  • Risk levels are arbitrary so it may take some time to figure out which is the best one for your investment. Go to high and you could find yourself investing in the wrong funds and risking your money more than you intended
  • Not all investors have made gains on their investment. One reviewer complained that he had lost 12% in the last 12 months, even though he chose the moderate risk option
  • Some customers have complained about the usability of the site and found setting up is not as easy as they thought. There have also been some issues in the past about the reliability of the performance graphs and data
  • Increasing your risk level doesn’t necessarily mean you’ll automatically get bigger returns and you need to be careful about where you set out your stall. Selecting a medium risk level such as 5 or 6 seems to bring the best returns

Charges and commission

Nutmeg pride themselves on being open and transparent about their charges. The more you invest, the lower the management charge. This ranges between 0.3 and 0.95% plus VAT. Fees are based on your total contribution across various different funds. There are some fund costs under this which the company tries to keep as low as possible. The average charge is 0.19%, considerably lower than many other robo advisors. There are no set up fees.

Top tips for getting the best out of Nutmeg

Have a clear idea of why you are investing and how you want your money to perform. Nutmeg provides you with a way to check on your current portfolio and understanding these facts and figures is important as with any other investment sector.

You should be aware that there is some risk associated with investments and that levels can go down as well as up. Ideally, you should be playing the long game and building capital over a period of years rather than hoping to gain quick and easy (and risky) gains.

Nutmeg: Verdict

There are a growing number of robo advisors and investment platforms that SMEs and startups can plug into to make the most of their spare finances. Nutmeg has been operating for over five years now and the reviews of its performance are generally good. With lower charges than many other sites offering similar provisions, there’s a lot to be said for this online investment site.


Previous articleTop 10 business news of the week #28
Next articleTop 10 business news of the week #29
With a background in design, I started my career working in various UK based start ups. Branding, social media campaigns and digital design were my main strengths. Then, I dived into the business side of things. I am now a key researcher and creative content writer at CompanyFormations 24.7.