Sunday 7 October 2012 11:06 pm

Nutmeg: We will shake up banks

INVESTMENT BANKS are stifling innovation and have failed to deliver the benefits of the digital revolution, the founder of a British online fund manager has claimed. Nick Hungerford, the chief executive and founder of Nutmeg, a personal portfolio manager promising to be the “Facebook of wealth management”, told City A.M. that major investment banks lack the “transparency and control” that customers expect, and promised to shake up the industry. “Nothing has happened in this sector for 200 years, and it shouldn’t work like that,” Hungerford said, claiming he had taken more inspiration from web companies such as Google and Facebook than traditional banks. Nutmeg, which allows users to sign up for managed portfolios from as little as £1,000, set a level of risk, and track their investments daily online, goes live today after thousands have signed up for the service. The FSA-approved business, backed by Pershing, promises to be more open than others about what it invests in, and offer a greater degree of control and lower rates than other investment vehicles. Nutmeg’s investors include Tim Draper, an early investor in Skype and Hotmail, and Spotify board member Klaus Hommels. “We want to shake up the way this industry is run,” Hungerford said. “Online you can have a great user experience that’s cost effective and it can be as easy as possible. Despite the rise of the internet nothing has happened [to finance].”