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  • FIRST POST
    • EETraveller
    • By EETraveller 6th Jan 18, 11:46 AM
    • 6Posts
    • 0Thanks
    EETraveller
    Sticking to Nutmeg,or use an additional platform?
    • #1
    • 6th Jan 18, 11:46 AM
    Sticking to Nutmeg,or use an additional platform? 6th Jan 18 at 11:46 AM
    All the robo-advisor type platforms seem to offer only up to FSCS £50,000 protection in the event that they go bust.
    I have now a portfolio well over that limit with Nutmeg. I wonder if any further contributions should still continue building up the Nutmeg portfolio, or would it be more sensible to use an additional platform?
    I am liking Nutmeg so far, and all the pots seem to perform within expectations, so at the moment I am inclined to further contribute and accept that the risk is very minuscule.
    Any opinions?
Page 1
    • msallen
    • By msallen 6th Jan 18, 11:58 AM
    • 623 Posts
    • 608 Thanks
    msallen
    • #2
    • 6th Jan 18, 11:58 AM
    • #2
    • 6th Jan 18, 11:58 AM
    All platforms have the same £50K FSCS protection, but the likelihood of ever having to call on it is minuscule as it only really protects you against fraud by the platform.

    So by that measure you can happily continue to invest with Nutmeg.

    However, you are choosing to invest via an expensive route. You would pay less in charges using a conventional DIY platform rather than a robo-advisor.
    • EETraveller
    • By EETraveller 6th Jan 18, 12:06 PM
    • 6 Posts
    • 0 Thanks
    EETraveller
    • #3
    • 6th Jan 18, 12:06 PM
    • #3
    • 6th Jan 18, 12:06 PM
    Thanks for the reply, msallen.
    I went with the Nutmeg route simply because I have next to no idea about investment, and the simplicity of choosing risk level and letting them do the work seems to suit me.
    I did think about the conventional platform such as Hargreaves+Lansdown,... I'm prepared to learn a little more about it, but do not have the time or energy to take regular actions etc. I could start with whatever further I have to invest, but would you recommend simply invest and sitting on it (as I do with Nutmeg) ? Obviously I will try to regularly further contribute.
    Last edited by EETraveller; 06-01-2018 at 12:11 PM.
    • Liffy99
    • By Liffy99 6th Jan 18, 12:52 PM
    • 47 Posts
    • 17 Thanks
    Liffy99
    • #4
    • 6th Jan 18, 12:52 PM
    • #4
    • 6th Jan 18, 12:52 PM
    I have a Nutmeg account too and have been very pleased with it.
    I have also recently opened an account with Vanguard, investing in a couple of their Life Strategy funds (themselves a basket of funds chosen to reflect risk level etc).
    Yet to see how they perform but overall management costs are less than half those of Nutmeg all in.
    • dunstonh
    • By dunstonh 6th Jan 18, 1:19 PM
    • 90,402 Posts
    • 57,183 Thanks
    dunstonh
    • #5
    • 6th Jan 18, 1:19 PM
    • #5
    • 6th Jan 18, 1:19 PM
    Robo-advice investing is not a platform.
    offer only up to FSCS £50,000 protection in the event that they go bust.
    and with many robo-advice services having dire financials, it is something to consider. You are unlikely to lose your money as the underlying assets should be there. However, getting access to your money in the short term following a failure is likely to a long wait.

    I am inclined to further contribute and accept that the risk is very minuscule.
    A research company recently said that they expect most early robo-advice firms to fail. Nutmeg's financials are well known. So, the risk of failure is not minuscule. The risk of losing the money is small. It would be safer if the underlying assets used by the robo-advice were UT/OEICs rather than ETFs (UT/OEICs get their own FSCS protection whereas ETFs have none). The are new trading rules that started 3rd Jan that should increase consumer protection on ETFs. Still no FSCS protection but it would be harder for a firm to syphon money off in a fraud.

    The risk of a fraud increases the more a company is in financial stress. Financial strength is a key consideration with advised cases. Just because you are going DIY does not mean you can ignore such a thing.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • aroominyork
    • By aroominyork 6th Jan 18, 2:41 PM
    • 336 Posts
    • 81 Thanks
    aroominyork
    • #6
    • 6th Jan 18, 2:41 PM
    • #6
    • 6th Jan 18, 2:41 PM
    The are new trading rules that started 3rd Jan that should increase consumer protection on ETFs.
    Originally posted by dunstonh
    Dunston, what protection - if any - do I have holding ITEQ, which is a US-based ETF.
    • dunstonh
    • By dunstonh 6th Jan 18, 10:06 PM
    • 90,402 Posts
    • 57,183 Thanks
    dunstonh
    • #7
    • 6th Jan 18, 10:06 PM
    • #7
    • 6th Jan 18, 10:06 PM
    Dunston, what protection - if any - do I have holding ITEQ, which is a US-based ETF.
    Originally posted by aroominyork
    None. ETFs are direct investments, like shares. So, there is no FSCS protection.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Alexland
    • By Alexland 7th Jan 18, 9:07 AM
    • 1,119 Posts
    • 752 Thanks
    Alexland
    • #8
    • 7th Jan 18, 9:07 AM
    • #8
    • 7th Jan 18, 9:07 AM
    I have a Nutmeg account too and have been very pleased with it. I have also recently opened an account with Vanguard, investing in a couple of their Life Strategy funds (themselves a basket of funds chosen to reflect risk level etc).
    Yet to see how they perform but overall management costs are less than half those of Nutmeg all in.
    Originally posted by Liffy99
    +1 for moving to the Vanguard Investor platform with a LifeStrategy fund for a compatible asset allocation, lower cost and more financially secure alternative to Nutmeg for your portfolio. My view is that Nutmeg are only now competitive on LISAs and only because it's a less competitive market.
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