They say it’s the hope that kills you, but if you started out without any in the first place then you can just raise a weary eyebrow and carry on. It’s a bit like when Calvin is happier that he got a ‘C’ than an ‘A’ in his maths test, because if he keeps everyone’s expectations low his life is much easier.

Calvin would have been horrified, then, by the news that JP Morgan – you know, the same one that had to pay out nearly $1bn as a result of market manipulation and bankrolled the ESL – has checked down the back of the sofa cushions and has agreed to snap up beautifully designed money pit Nutmeg for a rumoured £700m. Not $700m. £700m.

A quick stat attack – this represents about £32 a share, maybe a bit less. Nutmeg has 140,000 investors, many of whom hold small balances. There is about £3.5bn on the platform, and it turned over £9.2m in 2019 while booking a £21m loss. By all accounts 2020 was a good year, but no-one is expecting a profit. The crowdfunding investors that everyone laughed at and wrung their hands about why inexperienced investors shouldn’t get their hands dirty with this sort of thing and should just get an adviser to recommend a passive globally diversified multi-asset fund instead have had a near triple-bagger experience.

Meanwhile JP Morgan Chase earned $29bn on revenues of $123bn and looks after about $6 trillion of client assets while custodying a further $31tn. By way of reference, the GDP of the UK in 2019 was $3.13 trillion.  You know what they say, $6tn here, $6tn there, soon adds up to real money.

That’s all another way of saying that a) Nutmeg’s financial performance would barely register as a blip on the watch sheet of the most junior intern in JP Morgan’s accounts department and that b) £700m is pretty close to being chump change for Jamie and his pals.

It’s close to being chump change, but not quite, and so we can’t put this down to a deal agreed after a heavy post-lockdown night on the Cheeky Vimtos.  We also can’t put it down to Nutmeg’s soaring profitability, and I suspect it’s not got much to do with JPM wanting access to the IP of those multi-asset portfolios, or even the very nice technology and user experience. I doubt it’s even got much to do with the 140,000 customers, otherwise known as “two thirds of a Glastonbury”. Interestingly, the correlation between Nutmeg account holders and the Ruperts and Jacintas in Hunter wellies at Glastonbury trends very close to +1. It doesn’t really, I just made that up. (But I bet it is.)

If you can’t work out what the rationale for something like this is, it’s usually because you’re looking at the trees and not seeing the forest. In this case, JPM thinks that UK retail financial services and in particular long-term savings and investment is a good bet. This is not an uncommon view – every PE house buying up advisers and platforms agrees – and it’s driven by the fact there is a very large amount of wealth stored up by the top two socio-economic deciles of the population, that will continue to remain unspent for at least the next two to three decades.

Nutmeg hasn’t managed to tap that effectively, but Goldman Sachs has, and JPM Chase is set to follow suit with the hilariously titled “Project Dynamo” (you can just imagine the square-jawed, deck-shoed, chinos-at-the-weekend-wearing MBA that high-fived his way to that little gem). It’s built a consumer platform from scratch, but that doesn’t do what Nutmeg does, and so there’s a good level of complementarity.

So if you view £700m – or whatever it ends up being – as the cost of entry into the retail investment dynamic of one of the strategic priority markets for one of the world’s biggest banks, it starts to make a bit more sense.

When the other wealth managers pulled out of the robo sector, we wrote about how these kinds of propositions only made sense if you didn’t need them to make money. This deal doesn’t change that dynamic. The juice for JPMC is banking, and bankers gonna bank. This helps it ensure that its waterfront is sufficiently broad to be credible and gives it a bit of a head start, not least in the undeniably excellent Nutmeg online experience. That doesn’t mean life is going to be easy at whatever Nutmeg becomes: expectations will be high as to what a proposition like Nutmeg can do when supercharged with a world-famous brand like JPMC.

It’s a great result for Nutmeg investors – as distinct from those who invest through Nutmeg. They stayed the course when others dropped away and have been rewarded; more power to them. I just kind of wish that the indie robo sector had done a bit better in its own right, that’s all. It’s the American banks’ world now; we just live in it.


  • We don’t spend billions on tech at the lang cat – we reserve that for Mike’s expense account – but we have been busy building on the success of Platform Analyser. If you’d like to see what we’ve been up to and how it can redefine platform due diligence then come see our free demo on Thursday at 11. All welcome.
  • HomeGames this week is one we have meant to do for a very long time. Richard Allum of The Paraplanners is one of the sector’s goodest eggs and tbh we should have had him on ages ago. Never mind, that gets fixed at 12.30pm today when Natalie will be talking to Richard. Come a’ye.
  • No taxation without representation – but the representation needs to be right. This has still got a way to go and whatever happens the most important thing is that firms get a proper voice. The CII has a lot of work to do.
  • Keep an eye on the regulator – it’s not necessarily the case that things like MiFID II regulation will fall away. It never gets easier…
  • And your music choice this week is especially for all the Jacintas and Ruperts, who if they were in a field in Somerset in 2000, accidentally caught what’s probably the best Glastonbury performance of all time. Here’s Bowie doing Heroes. I’ve never wanted to go anywhere near Glastonbury, but I’d have broken my rule for this.

I’m off on hols next week owing to Scottish schools breaking up ridiculously early, so another feline will Update you. Be pure; be vigilant; behave.