Pre selected Stocks and Shares ISA Provider

marantz

Has anyone got personal knowledge/experience of one of the new boys on the block which is "NUTMEG" ? Thanks

SnowMan

Expensive waste of money. Best avoided completely.

They spam these forums regularly also.

moneyfoolish

I set up an ISA with Nutmeg on January 8th of this year. I already had a cash ISA so invested a lump sum of £5,760 which I split over 4 different risk levels. Currently I am £78 or 1.4% down but that doesn't seem too bad to me as the market has not done well since I began with them. The reason I am using Nutmeg is that I don't have the inclination to spend hours looking at investments and, my alternative to Nutmeg would be to use a made-up portfolio from Hargreaves Lansdown, Bestinvest or a similar operator which would not be updated unless I did it myself. I also don't have to worry about what charges I will pay. It's a straight 1% per year so I know where I stand and don't have to work out how many trades, platform charges, fund charges etc. The Nutmeg figures were quite good for last year but I want to see how they do in a falling market before I decide whether to use them in the long term.

moneyfoolish

SnowMan wrote: »

Expensive waste of money. Best avoided completely.

They spam these forums regularly also.

As one who is using them, I'd love to know why you think it's an expensive waste of money. Looking at the Moneysaving Expert blog I've just read on charges, it seems to me that almost all are in the 1% region if you add platform charges to fund charges. I'm sure some people have the expertise and the time to produce their own portfolios which could do considerably better but many of us don't have the time or inclination to spend all day looking at fund performance and the results I saw for last year seemed to be an improvement on just using an index tracker which is all I required. Incidentally, I have absolutely no connection with Nutmeg other than an ISA investment!

SnowMan

Because all the 1%s add up, and before you know it a big chunk of your money is gone.

If you want to keep things simple just put your money into diversified trackers on the cheapest platform available to you.

It depends on individual circumstances which platform is cheapest. But typically using Vanguard on the iweb platform you are down to the region of 0.2 - 0.3%pa in charges.

Nutmeg don't have any magic powder to enable them to outperform. They may get lucky one year but over time they fail and can be expected to underperform to the extent of their high charges. No refund from nutmeg will be forthcoming when this happens.

jimjames

moneyfoolish wrote: »

As one who is using them, I'd love to know why you think it's an expensive waste of money. Looking at the Moneysaving Expert blog I've just read on charges, it seems to me that almost all are in the 1% region if you add platform charges to fund charges. I'm sure some people have the expertise and the time to produce their own portfolios which could do considerably better but many of us don't have the time or inclination to spend all day looking at fund performance and the results I saw for last year seemed to be an improvement on just using an index tracker which is all I required. Incidentally, I have absolutely no connection with Nutmeg other than an ISA investment!

Do you realise the difference that 1% charges compared to 0.25% charges make? You're paying 3x as much and that will have an effect on your returns long term so it really is worth going with the best value platform that offers the product you want.

If you're happy with Nutmeg and paying over the odds then that's fine but you need to be aware of the costs. Exactly the same as those using Virgin Index trackers in their ISA that cost 4x as much as the leading provider.

Small differences in cost do matter long term - a lot!

moneyfoolish

Absolutely agree with you both re the charges and I seriously looked at the Vanguard LifeStategy funds. I guess I chose Nutmeg because I looked at the first year performances which for the funds I chose, Nutmeg Risk Levels 2,4,6,8 (the equivalents to the Vanguard LifeStrategy 40%, 60%, 80% and 100%) had gains of 10%, 14.5%, 18.3% and 20.6% from 30/09/12 to 30/09/2013 whereas the Vanguard Funds had gains of 1.39%, 3.15%, 4.95% and 6.72% from 15/04/13 to 15/04/14. Yes, I know 1 year is not a realistic time period and that the yearly period is not even the same which is why I will be looking closely over the next couple of years and comparing!