Digital wealth manager Nutmeg recorded losses of £21m last year as it struggled to break even for the eighth year in a row.
Accounts for the year to the end of December 2019, filed on Companies House today, show Nutmeg made a loss of £21.2m, deepening last year’s losses of £18.4m.
This comes even as total assets under management grew 41 per cent year-on-year. Nutmeg said it had “significantly out performed” the wider sector, which grew assets by 13 per cent over the same period.
While it is the eighth consecutive year the robo-adviser has made a loss, Nutmeg’s turnover improved from £7.1m to £9.2m in 2019.
Chief executive Neil Alexander said Nutmeg’s trading loss reflected the fact the wealth manager had continued to invest in the growth of the business.
Client numbers jumped 30 per cent year-on-year as the pandemic accelerated the adoption of digital services. Alexander said the firm had benefited from “the changes in consumer sentiment and behaviour with faster than anticipated growth in 2020.”
“While traditional providers are realising that being fit-for-purpose in a digital world is no longer a nice-to-have, but is now essential”, he added.
Despite an increase in competition, Nutmeg remains the leading digital wealth manager in the UK with a 36 per cent share of the market. It has also grown to become the UK’s fifth largest wealth manager.
This year Nutmeg said it became the first wealth manager to offer customers the ability to top up their investments using Google Pay and Apple Pay.
Nutmeg has attempted to diversify its revenue streams, having launched a fully regulated advice service with a £350 flat-fee in October 2018.
The robo-advice sector has attracted investment from financial services firms in recent years, such as Schroders, which backs Nutmeg, and LV, which backs Wealthify.
Although it has not gone well for all. In May 2019, Investec announced the closure of its robo-advice business after two years of losses.