Nutmeg: ‘We are not threatened by Vanguard’

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Online investment manager Nutmeg is not threatened but “excited” at Vanguard’s breakthrough into the UK direct-to-consumer market, Nutmeg chief investment officer Shaun Port says.

Earlier this month Money Marketing revealed Vanguard will launch its D2C offering within six months.

Port told Money Marketing: “We don’t look this as a threat at all. This is a market creation, not competition.

“This is going to increase brand recognition for us. There’s a huge amount of people in the UK that only save in cash Isas for instance, more than seven million people that could access a service like ours. It is good to see others replicating what we are doing”.

Port, who has been at Nutmeg since 2012, adds: “We have always said we wanted more people in the market and for us Vanguard with their giant reputation and quality products is really encouraging and we are really excited about it because opens the market to a wider audience.

“But it is not only Vanguard, others are doing the same, like UBS. We think there will be more entering this market, many said they will but still haven’t.”

Port says Nutmeg’s in-house infrastructure remains a key differentiator, enabling it to respond to customers “much quicker”.

He says: “Where we win is our agility to engage with customers to get products rapidly to market to reinvent ourselves every few years.

“If you imagine that the benchmark for proposition is Amazon, everyone falls short of that. We believe we can develop faster and get closer to customer expectations, especially in a digital world.”

Seven Investment Management co-founder Justin Urquhart Stewart says Vanguard will have “a significant impact” in the industry but should not just rely on their low cost offering.

He says: “A beast of that size with pricing power will of course make a significant impact. The industry must radically and rigorously address not just cost but primarily service and performance.

“Vanguard’s low cost models will be tested in volatile markets, while Nutmeg and others will have to prove their capability in such times and prove that service and performance outweighs a fixation on cost.”