JPMorgan Chase buys Nutmeg

colsten

https://www.finextra.com/newsarticle/38286/jpmorgan-chase-to-acquire-uk-digital-wealth-management-firm-nutmeg

older_and_no_wiser

Yes just noticed. I have an investment with Nutmeg and it's been performing rather well. Their fees are quite high though and they haven't yet reported any profits. 

They recently began to offer JP Morgan Alpha managed funds, so this must have been on the cards for a while.

Thrugelmir

To compete with the likes of Vanguard. Needs to boost funds under management. Building scale takes time if done organically.  

barnstar2077

High fees, but running at a loss into the millions, some creative accounting going on there I think! :  )

older_and_no_wiser

barnstar2077 said:

High fees, but running at a loss into the millions, some creative accounting going on there I think! :  )

Haha. I'm sure Mr Morgan will sort them out 🤣

Thrugelmir

barnstar2077 said:

High fees, but running at a loss into the millions, some creative accounting going on there I think! :  )

Companies are rarely profitable from day one. As long there's the funding the company can continue. Took Amazon 14 years before it reported a net profit. Backers had deep pockets. 

barnstar2077

Thrugelmir said:

barnstar2077 said:

High fees, but running at a loss into the millions, some creative accounting going on there I think! :  )

Companies are rarely profitable from day one. As long there's the funding the company can continue. Took Amazon 14 years before it reported a net profit. Backers had deep pockets. 

In Amazon's case they were rapidly expanding, building warehouses and infrastructure.  Nutmeg could be run relatively cheaply by comparison.  If they had 100 or 1000 customers their overheads wouldn't change much.

Thrugelmir

barnstar2077 said:

Thrugelmir said:

barnstar2077 said:

High fees, but running at a loss into the millions, some creative accounting going on there I think! :  )

Companies are rarely profitable from day one. As long there's the funding the company can continue. Took Amazon 14 years before it reported a net profit. Backers had deep pockets. 

In Amazon's case they were rapidly expanding, building warehouses and infrastructure.  Nutmeg could be run relatively cheaply by comparison.  If they had 100 or 1000 customers their overheads wouldn't change much.

Then we have a very perspective of the past and also business finance. 

ivormonee

I believe JPMorgan will be launching a range of direct-to-consumer offerings in the coming months. This may be part of their overall strategy and direction for the UK market.

colsten

ivormonee said:

I believe JPMorgan will be launching a range of direct-to-consumer offerings in the coming months. This may be part of their overall strategy and direction for the UK market.

That could very well be the case. They might, however, overestimate the attraction of Nutmeg - I for one wouldn't be interested in their other offerings if Nutmeg makes those other offerings special. OTOH, they may have concluded that Nutmeg customers would be great prospects for the other offerings they are planning to bring to the UK market.

Thrugelmir

colsten said:

ivormonee said:

I believe JPMorgan will be launching a range of direct-to-consumer offerings in the coming months. This may be part of their overall strategy and direction for the UK market.

That could very well be the case. They might, however, overestimate the attraction of Nutmeg - I for one wouldn't be interested in their other offerings if Nutmeg makes those other offerings special. OTOH, they may have concluded that Nutmeg customers would be great prospects for the other offerings they are planning to bring to the UK market.

JPM have a stable of highly successful IT's. Built on a globally based investment management framework. Nutmeg gives them the front end consumer window to exploit this. With costs falling all the time. Vanguard does increasingly appear to do little for their fee. The competition is getting more intense.