Consider the phrase ‘wealth management’. Chances are it conjures up a service reserved for the very well-off. It certainly sounds out of reach for ordinary people.
One fintech firm wants to blast away that perception: Nutmeg, which lets people invest via its online dashboard-style platform.
You need £500 to get started which, while not a small sum, makes Nutmeg accessible for a much wider pool of people than would traditionally use investment services. It takes a fee of up to 0.95 percent of any money invested in return.
Nutmeg is not right for everyone. However there’s clearly an appetite for its services: it has 95,000 registered users and a handful of competitors have started to emerge in recent months and years.
The company was set up in 2011 by former stockbroker Nick Hungerford, who felt frustrated by the exclusive, secretive investment sector and saw the potential of tech and the web to transform it.
This desire for transparency helps explain Nutmeg’s platform. Customers can see exactly which funds their money is invested in, move their money around or withdraw whenever they wish to.
Nutmeg’s investors decide where to invest based on the customer’s risk appetite (gauged from a 10 minute questionnaire) and their long-term goals, which are couched in the everyday terms of saving for weddings, a new sofa or a pension, rather than financial jargon.
It’s aimed at people who want to save for the long-term – think 10 years or more.
What it’s like to work at Nutmeg
Nutmeg now has about 80 staff, mainly based at its headquarters in Vauxhall, split into teams including product, technology, operations, customer services and - of course - investors.
Each employee does occasional shifts on the customer services team – even CEO Nick Hungerford, according to chief product office Scott Eblen, who joined from Google in January 2015.
The key to its success, he says, is that it acts more like a tech company than a traditional wealth management firm.
“One of the first things that attracted me was the passion for what they’re doing…Nick can articulate the way traditional finance businesses screw over a lot of customers, and how by doing this digitally we can give customers much better outcomes. That was very appealing,” Eblen says.
Most of Nutmeg’s employees are also customers – himself included, he adds.
Nutmeg runs on Amazon Web Services' cloud and the tech team use Apache Mesos and Docker to support multiple software releases a day, according to chief technology officer Ewan Silver.
“One of the team had an idea a week ago and it’s been shipped today. We have a really quick flow through,” he enthuses.
Visiting the office, there is a real sense of pace and enthusiasm among employees, as Eblen attests.
“One of the great things is just the speed you can move at in a startup. Within weeks of joining we launched our pension product. Our chief operating officer had spoken to an industry colleague who said they would expect it to take two to three years to get that live,” he says.
The company has an iterative, experimental approach to its products. The product team spend hours looking at data on what customers are doing and running experiments across sites to get early signals on how products are performing (which brings to mind Eblen’s former employer Google).
Nutmeg staff have two meetings a week in the communal office area to discuss what’s happened so far and what’s coming up across the company, plus ‘standup’ meetings in product, tech and other teams.
The employees are an eclectic bunch. The company actively tries to avoid hiring people from the traditional, financial investment world.
“Having financial experience is actually a liability, if you come from the perspective of how finance has worked for the last 300 years. You think about solving problems with financial products a somewhat broken industry has built and sold,” Eblen says.
Instead it focuses on hiring smart, creative, customer-focused people who understand what’s possible and how to approach problems and thus there are people from a wide range of backgrounds and industries, according to Eblen.
For example one of the staff used to work in supply chain at Toyota’s famous car plant where they developed the lean ‘Kanban’ manufacturing method.
The year ahead
Eblen says Nutmeg “always looks to the customer to drive its direction, and will continue to streamline and improve the customer experience”.
Nutmeg has recently received permission to offer financial advice (rather than just investment products) from the Financial Conduct Authority.
Although the company hasn’t started providing an advice service yet, it’s surely in the works.
“The ability to get advice through Nutmeg is now something we can do. So a lot more thinking will be going into that. It will be a big opportunity,” he adds.
Nutmeg will also inevitably have one eye on the competitor startups that have started to spring up. However Eblen doesn’t sound too worried. In fact he says he thinks it is “fantastic”.
“It’s important to have a big ecosystem of online investment solution. It adds credibility to our approach – it shows old companies aren’t serving customers well enough. It creates more ideas for how we can help customers in new and innovative ways and creates a healthier fintech economy.”