Nutmeg's surge in losses is evidence of growing concerns about the viability of robo-advisory fintechs' business models:
the Financial Times. During the period, it lost £18.6 million , compared with £12.4 million in 2017. Despite the mounting losses, Nutmeg, which has previously been reticent to outline when it expects to break even, aims to be operationally profitable within three years, CEO Martin Stead told the FT.Nutmeg's latest figures are evidence of the growing concerns about the viability of robo-advisory fintechs' business models.
These lowly revenue figures relative to Nutmeg's operating costs can be attributed to the fact that Nutmeg's low-cost proposition typically attracts younger customers, who don't deposit large sums of money into the platform.
However, the company seems to have tweaked its business model in recent months — and it could be positioned to follow a more fruitful strategy going forward: Part of Nutmeg's growing staff costs have resulted from the company introducing financial advisors to bolster its offering. When it a phone-based financial advice service at the end of last year, Lisa Caplan, head of the startup's financial advice service, explained it was because many potential clients abandoned the online registration processes due to fear of investing.
in-house robo-advisory platforms by banks, partnerships between banks and fintechs like Nutmeg are likely to come to the forefront in the coming years, allowing these players to tap into each other's competitive advantages.Join thousands of top companies worldwide who trust Business Insider Intelligence for their competitive research needs. >>
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