Nutmeg cuts top fees in charging overhaul

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Nutmeg has overhauled its fee structure again, cutting two of its charging bands.

The online investment manager is moving from a four-tiered model where charges ranged from 0.3 per cent to 0.95 per cent depending on portfolio size to a two-tiered structure.

From Monday, on their first £100,000 customers will now pay 0.75 per cent, falling to 0.35 per cent for all investments over £100,000.

Nutmeg will continue to levy underlying fund charges averaging 0.19 per cent a year.

The online investment manager says that more than two-thirds of its customers will see fees cut as a result.

Nutmeg chief executive Martin Stead says: “Fees are the only part of your investment performance that you can control. The fees you pay can make a significant difference over time. Even a tiny reduction can make a massive saving over 20 or 30 years. Our technology enables us to serve our customers with high quality investment portfolios at a much lower cost than traditional wealth managers, and we are pleased to be able to make our fees even more competitive as we enter the New Year and Isa season.”

Nutmeg has cut fees on a number of occasions since launch.

Before February last year, it had six fee bands, which was then cut to four as it reduced fees on its lowest value portfolios from 1 per cent to 0.95 per cent and combined its two highest value portfolio bands to drop fees for clients investing between £100,000 and £500,000 from 0.6 per cent to 0.5 per cent.

It then cut its minimum lump sum investment from £1,000 to £500 in March.

Nutmeg is also waiving portfolio management charges for new customers in a bid to encourage them to invest through a Lifetime Isa.

Fixed allocation portfolios

Nutmeg has also launched a range of “fixed allocation” portfolios today. The portfolios will be automatically rebalanced without human intervention for clients who do not want Nutmeg’s managers to handle asset allocation.

The portfolios will cost 0.45 per cent for the first £100,000 and 0.25 per cent thereafter.