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Profile: Nutmeg - 'there is regulatory momentum behind us'
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by Danielle Levy on Jul 18, 2014 at 10:25
He says the business has not yet broken even and plans to use the cash from its recent fundraising to expand and ultimately accelerate growth.
This will be done by doubling headcount, launching a pension product and investing to better understand its clients’ needs and behaviour.
Port believes the prevailing backdrop will be supportive for Nutmeg’s business model. It seemingly has the backing of the regulator, plus the Budget’s sweeping reforms concerning Isas and pensions, which give people more control of their savings and pensions.
Arguably there has been a lack of innovation when it comes to investment management, given the technological advancements of the past 10 years. When I ask Port why that is, he suggests that it has simply not been in the industry’s interest to innovate.
‘It is partly because people have been earning high fees and clients value personal relationships. It is surprising that there hasn’t been more innovation but it is clear the regulator is supportive of new businesses, innovation and seeing anyone who puts the customer first,’ he says.
‘There is a regulatory momentum behind us as well. From day one we were about transparency and what people were paying in fees in pounds and pence.
‘Ask any wealth manager how much their clients paid in fees last year and it is a difficult question. How much did they pay in dealing commissions, FX fees and on funds?
‘How does a traditional wealth manager engage with their client digitally over the next five years? It will be materially different over the next five years than it was over the last five.’