John Lewis launching investment products (Stocks and Shares ISAs, JISAs and General Investment)

underwhelmed_saver

https://www.johnlewispartnership.co.uk/media/press/y2021/jl-opens-the-door-to-easy-to-use-investing.html

Investment platform will be through Nutmeg but (I guess) with JL branding slapped on the front.

Products:

• Junior ISA - A tax-free investment with a yearly allowance of £9,000, which enables parents, guardians and grandparents to make regular contributions to a Junior ISA for a loved one under the age of 16, which only the child can access when they turn 18 
• Stocks and shares ISA - Invest money in stocks and shares ISA and customers won’t pay any tax on their returns. Any growth they make on their yearly allowance (£20,000) is tax-free
• General Investment - Customers can invest in a general investment account if they have used up their £20,000 ISA allowance for the year

Not entirely clear from the press release what the fee structure will be but I guess it's going to be the same as Nutmeg https://www.nutmeg.com/our-fee which can range from 0.72% to 1.12%

Thoughts? I don't really see the point, unless John Lewis has negotiated some significant discount on the fees from Nutmeg

csgohan4

Iweb/ AJ bell are good enough for me, cheaper for what I need. I don't care about branding to be honest, as long as they have a good reputation and decant fees. 

Choosing small companies can also be a headache, like EQI when they were recently taken over by II which is a PITA transferring 

MX5huggy

Fees just link to Nutmegs fees from this page  https://investments.johnlewisfinance.com/isa

tacpot12

I prefer companies that have one product or service that they provide.

The problem with diversification in businesses is that the board don't know about a different business other than their own. The directors at JLP have been selected for their knowledge of retail, not directing an investment company. If you want to run an investment house, run an investment house, don't run a retail business. 

You only have to look at the complete mess that the Co-op made when its retail board merged with the bank board and started to try to direct the bank. Peter Marks the CEO of the retail board at the time promised it would be a great success, but he was a retailer and not a banker, and the whole thing had to be unravelled at great expense to the two businesses. Unfortunately, the Co-op doesn't have shareholders to give him the good kicking he deserved.  

Tesco is another example. "We're a supermarket, but today we have decided we also want to be a bank". A few years later, "Today, we have changed our mind and don't want to be a bank." 

M&S is another example "We're a food and clothing retailer, but today we have decided we also want to be a bank". A few years later, "Today, we have decided we don't want to be a bank". 

You just don't have these problems if you pick a company that only provides the service you want to buy. 

Alexland

I don't see any reason to go with John Lewis above just going directly with Nutmeg if you want that sort of thing. It's just a white label product to get a few more customers through the door. JL are unlikely to publicly promote it but there is a good cross selling opportunity they will try on customers already on their other products. The underlying model it probably that Nutmeg give JL a one off payment for each signup similar to the amount they would pay to acquire customers via TopCashback etc. As a customer you would be better signing up with Nutmeg via a cashback site.

masonic

I consider investment accounts to be long term products. It would be rather annoying to have to transfer out or have your accounts taken over in a few years if John Lewis goes the way of other high street names who moved into financial services.

colsten

Alexland said:

I don't see any reason to go with John Lewis above just going directly with Nutmeg if you want that sort of thing.

Not everyone has your knowledge of investing, and of the options available to you.

John Lewis as a Brand is significantly better known than Nutmeg. They rank as number 67 in the UK most valuable Brands, according to Kantar. Needless to say, Nutmeg doesn't figure in the top 100.

So in some people's minds, JL are giving credibility to Nutmeg, and they might be investing for the first time because of the John Lewis backing. Whether this ends up in tears remains to be seen,

kuratowski

colsten said:
So in some people's minds, JL are giving credibility to Nutmeg, and they might be investing for the first time because of the John Lewis backing. Whether this ends up in tears remains to be seen,

I had v similar thoughts, I wonder how good this will ultimately be for JL's brand...

DireEmblem

This looks a bit different.  I thought Nutmeg were bought out by JPM, and this is simply JL partnering with Nutmeg is it not?

I would suspect it is probably a similar setup to a platform or third party sales offering traditional investment funds to other users, where in return they take a small cut of the management fee of the product.  The both would appear to be managed separately which is good.

Nutmeg is good for what it is, but its not the cheapest.  As a result there is probably some 'wiggle' room in there to grow Nutmeg's AUM with partnerships, and give away a small cut of their management fee as a result.

dunstonh

Investment platform will be through Nutmeg but (I guess) with JL branding slapped on the front.

Nutmeg is not an investment platform.  


Thoughts? I don't really see the point, unless John Lewis has negotiated some significant discount on the fees from NutmegProbably classic white labelling as many retail shops have used over the years.

Malthusian

tacpot12 said:

The problem with diversification in businesses is that the board don't know about a different business other than their own. The directors at JLP have been selected for their knowledge of retail, not directing an investment company. If you want to run an investment house, run an investment house, don't run a retail business.

But to be fair to JLP they are not trying to run an investment company. They are sticking their brand on someone else's investment company in exchange for a cut of their fees. If Nutmeg knows how to run an investment company (although this idea requires handwaving away their massive losses) everything should be gravy.

Where these arrangements come unstuck is when it turns out that their investment company partner aren't much cop, which is why they needed to piggy-back on a well-established brand instead of developing their own. Then miffed customers start to blame the failings of their Nutmeg account on John Lewis instead of Nutmeg and the John Lewis brand becomes tarnished.

The target audience is anyone who would click on "open savings account" on the John Lewis website without bothering to look at anyone else which excludes this forum.