Nutmeg charging transparency questioned in new robo-advice research

Independent analysis of the Nutmeg proposition has branded one of its claims over charges “misleading”.

The analysis is part of a new service from the Finance and Technology Research Centre, called Digital Wealth Insights, that has researched 20 robo-advice propositions currently in the market.

Fund Strategy sister publication Money Marketing has exclusively shared details of the analysis of Nutmeg, which was given a three and a half “heart rating” by the F&TRC.

The “heart-ratings” range from one to five and are based on a subjective perspective on how the F&TRC analysts feel about each organisation’s potential to transform the way people manage their money.

The analysis said Nutmeg’s strengths as included its client-centric approach, its good usability, and adding value through educational content on its website.

However, it said Nutmeg could be clearer about its charges.

The report says: “Disappointingly, and in contrast to Nutmeg’s upfront approach in other areas, there is less clarity around its fee structure, and this is notably lacking at key stages in the process.”

It adds: “Just prior to clicking the button to set up an account, the client is asked to tick a box agreeing to the terms and conditions. At this point we would not expect to see the statement ‘just one simple management fee’ where in fact this does not include the underlying fund management fee. This statement is misleading and needs further clarification.”

The reports does praise Nutmeg’s charge transparency for existing customers however.

It says: “In complete contrast with this, once an account is active, the client has the ability to clearly identify the fees they have paid out and the effect their fees have on their overall portfolio growth.”

Nutmeg chief marketing officer Katie Prentke English says: “We are always evolving our signup flow to be as transparent and easy-to-use for customers as possible. In a recent iteration we improved this part of the flow, including by linking customers to our main fees page, which lays out and explains the underlying fund costs clearly.”