What would happen to my money if Nutmeg went bust?

mcooke999

I got asked this question today and couldn't really answer it. I think the person asking has got about £60k in Nutmeg.

Linton

Someone else would probably buy Nutmeg's business and customer base from the liquidator and after a delay whilst the new owner got organised and took over control things would carry on much as before.  If you deposit money in a bank, the bank owns the money and can use it to pay off its debts.  You just own a promise by the bank to pay it back.  With a platform or fund manager you continue to own the investment.  The intermediaries just have the authority to manage it for you.  Your money cannot be used to pay their debts.  So the situation is very different.

In an extreme situation there is an £85K guarantee from the FSCS as with a bank account.

You will find many threads on this forum discussing the same topic.

Alexland

Have a look at the SVS Securities thread for a similar situation where the ring fenced assets were safe but it caused distress and is taking an awful long time for customers to get access to them again.

£60k at Nutmeg's lowest charge of 0.45% is £270 pa - why take the risk of an unprofitable platform when it's costing more?

mcooke999

Thanks. Yes that's right, it's not my money it's a friend's but I'll pass on the advice

Linton

Alexland said:

Have a look at the SVS Securities thread for a similar situation where the ring fenced assets were safe but it caused distress and is taking an awful long time for customers to get access to them again.

£60k at Nutmeg's lowest charge of 0.45% is £270 pa - why take the risk of an unprofitable platform when it's costing more?

As I understand it SVS was selling somewhat dubious high risk illiquid bond "investments", not mainstream regulated funds, so a very different company to Nutmeg.

Alexland

Yes but the SVS ordinary investor customers with normal assets in segregated accounts are following a fairly standard platform recovery process which takes time.