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‘Unacceptable!’ Nutmeg hits back at new rival’s ‘hidden’ fees

Gumtree co-founder Simon Crookall's claim that his new robo wealth firm will offer the best value on the market has caused a stir among its rivals.

‘Unacceptable!’ Nutmeg hits back at new rival’s ‘hidden’ fees

Nutmeg has attacked the claims of a new robo wealth firm that its fee structure offers the best value on the market. 

InvestEngine, founded by Gumtree co-founder Simon Crookall with his sister Joanna Crookall, was publically launched last week.

Crookall, who rarely gives interviews, told the Sunday Times that ‘it’s become apparent that there is a low-cost opportunity for people who have smaller amounts to invest’.

He said InvestEngine would charge clients 0.45% 'with no other fees, exit penalties or joining charges'.

This would undercut the fee structures at three of the industry’s leading digital wealth firms, Nutmeg, Wealthify and Moneyfarm.

It has since emerged there are a number of hidden fees at InvestEngine, which may substantially erase the cost difference, however. 

This was exposed by Nutmeg, which pointed out there was an additional 0.17% ETF fund fee on InvestEngine plus a 0.09% fee covering market spread.

‘It’s totally unacceptable any provider would mislead or hide fees from investors,’ Nutmeg said in a statement provided to Wealth Manager

When this was put to InvestEngine by the Sunday Times, a spokesperson apologised for the ‘confusion’ admitting it had not presented the information in a ‘consumer-friendly’ way.

Crookall added: ‘We didn’t aim to mislead on our fee structure. We’ve welcomed feedback and have already taken further steps to ensure the terminology on our website and information on what our customers will pay is clear and consistent.’

Nutmeg charges 0.75% for fully managed portfolios up to £100,000 and 0.35% for those over £100,000.

Moneyfarm charges 0.7% on investments from £1 to £20,000 and 0.6% on investments between £20,001 to £100,000.

Wealthify charges 0.7% a year on portfolios worth £250-£14,999, 0.6% for £15,000 to £99,999 and 0.5% for £100,000 and above. 

Commenting on his firm’s approach to charging, Nutmeg chief executive Martin Stead, said: ‘It’s important to me that everyone who visits the Nutmeg website can see a full breakdown of annual costs: the Nutmeg fee, underlying investment cost and the average cost of market spread depending on their investment amount and their investment style before they invest.’

Stead believes it is too difficult to compare the fees and charges from different providers in the current climate.

‘In a post-Mifid world, it’s totally unacceptable that any provider would mislead or hide fees investors would pay,’ he added.

’There’s a need for much greater transparency from some in our industry that have not fully embraced Mifid II rules, so that costs and charges are clear and easy for investors to understand before they have invested.’

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