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Robo firm Nutmeg to offer over-the-phone financial advice

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31/10/2018
Nutmeg, the robo-adviser, is piloting a new financial advice service offering people personalised investment recommendations from a qualified adviser over the phone.

This is a move away from the traditional robo-advice service Nutmeg currently offers, which relies on a series of algorithms to determine the most suitable portfolio for customers based on a risk profiling questionnaire.

Lisa Caplan, the firm’s head of financial advice, told YourMoney.com the service was launched after customers often said they wanted a human to check they were making the right investment decisions.

The pilot, which launches today, is open to anyone, not just Nutmeg customers.

An initial consultation is free and tailored advice costs £350 plus fund fees.

While the advice comes from a qualified adviser, it is restricted to the products available on the Nutmeg platform.

Nutmeg offers 10 fully managed and five fixed allocation portfolios across different risk levels. All portfolios invest in exchange traded funds (ETFs), which help keep costs down.

Caplan said: “As a former traditional wealth adviser, I know the value of one-to-one advice. But it can be a long process and expensive. We want to bring the Nutmeg approach and make it elegant, faster, more tech-led and easier for customers to engage with.

“This service isn’t going backwards [to traditional advice] but is complementary to our robo-advice service.”

How the service works

You can register your interest in the advice service on the Nutmeg website. The firm will then send you a questionnaire about your finances to complete.

If they think you could benefit from financial advice, they will set up an initial phone consultation, which is free.

If you decide to go ahead, they’ll produce a report with their advice and set up a second phone call where they’ll help you implement their recommendations.

Is it good value?

It’s difficult to judge cost of advice as it often depends on the complexity of your finances and the type of advice you require.

Some advisers charge an hourly fee, while others charge a set price for a piece of work, or an ongoing fee.

Generally, a financial adviser’s fee can vary from £75 an hour to £350, although the UK average rate is about £150 an hour, according to the Money Advice Service.

Unbiased.co.uk, an adviser search site, says the typical cost of investment advice is around £450.

Bella Caridade-Ferreira, CEO of Fundscape, a platform research firm, said: “At £350, Nutmeg’s new service is competitively priced, but it also needs to deliver and provide good quality advice to retail customers.

“If Nutmeg gets this right, it’s likely to drive growth in its robo business so it’s a win-win combination.”

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