Investors have many options when it comes into gaining exposure to the stock market. Thanks to the advancement in technology and the increase in financial inclusion, ordinary people can now invest in the baffling stock market with smaller amounts of money. Notice I used the word baffling. Many ordinary people do not know much about the stock market but what they do know is that the stock market is an amazing place to generate as well as preserve wealth. Many retail investors do not have the expertise, time or temperament to pick the best stocks to suit their individual objectives, risk appetites and time horizons. This is where Robo Advisers come in; these guys have the ability to make the investment decisions for you based on criteria, a service that historically was only available for people who were high net worth individuals (HNW).
In this guide I introduce to you the first ever UK online discretionary management company, Nutmeg. Remember that we do not provide financial advise or investment recommendations. This is purely for information and guidance and if you do decide you want to use nutmeg, do check out their website and do your due diligence. Also remember that with investments capital is at risk and you can end up with less than you put in. Past performance is not a guarantee of future performance and finally please note there maybe affiliate links presented in this post.
Click here invest with no Nutmeg fees for 6 months
Should I consider using a RoboAdvisors
Absolutely, most people don’t have the time to be researching stocks. Most people do not have the knowledge or expertise to pick the right investments. This is one of, if not the best way to invest passively with no stress or time consumption.
Who are Nutmeg?
Based in London, Nutmeg is a well-known, award winning RoboAdvisory used by many UK retail investors who are happy to outsource the investment decision making to a cheap online investment manager. They were the first pioneers, founded in 2011, and this well recognized RoboAdvisor provides their users with the ability to open up various investment accounts ranging from stocks & shares ISA’s, Lifetime ISA’s, Junior ISA’s, general investment accounts, and self-invested person pensions (SIPPs).
What type of assets do they buy for me?
The type of investment assets they invest in mainly consists of Exchange traded funds thus bringing you immediate diversification and low cost fees.
What is the minimum amount I have to open the account with?
The minimum amount you can open an account with is £500 and historically you would have needed to commit to an additional £100 per month. This is no longer the case.
What are the fees like?
They charge a standard platform fee of 0.75% if you go for the full managed or socially responsibly option and a lower 0.45% fee for those investors who are happy to have a fixed allocation. Their yearly management charges can range from 0.17% to 0.32% and so if you take in all fees then the range is between 0.68% and 1.13%. The good thing if you can get 0 fees for 6 months by signing up here
What is the process and what will they ask me?
Remember that before anyone should start investing there are various things you should consider which include your objective, time horizon and risk level. With traditional DIY investing you will need to research and try and figure some of these things out yourself but the good thing with nutmeg is that they hand hold you go through this.
- They will ask you a series of questions including do you have a specific goal or just want to invest?
- They will even ask you if you want to give a name to your pot and then they will ask you how long you plan to invest for, reminding you that the longer the better.
- From there, you choose your starting amount which is minimum £500 and if you have any additional monthly deposits you plan to add, you can put this amount here too. This is a new feature, as historically nutmeg required you to deposit £100 per month.
- Next you have the three choices of either a fixed allocation, a fully managed portfolio or socially responsible.
Nutmeg is very well recognised and has won various awards including the recent 'Best Online stocks & shares Provider.
Nutmeg customers are happy with the service with a trustpilot score of 4.2/5
Are there other RoboAdvisors to consider?
Yes, always shop around and use choose the platform that suits you. My personal opinion is that Nutmeg are my favourite because they are easy to use, they have the longest history and have had good performances over the years. but do also head to roboadvisors.com to check out others.
My golden nugget today is that we should remember that you do not need to have just one online platform to invest with. You can mi and match between RoboAdvisors, traditional investment platforms and non-commission investment apps. Remember than if the account you open is an ISA then you can only contribute to one stocks and shares ISA account per tax year but you can contribute to different TYPES of ISA’s per tax year.