"JPMorgan currently provide some of the Nutmeg portfolios – it feels inevitable that they will shortly move to offer all investment management portfolios as soon as contractually permissible."
She added: “In my experience, deals are often all about timing. If JPMorgan Chase want to launch a digital bank here, acquiring a local business is about so much more than simply buying the robo itself.
"They are buying a team, local knowledge, speed to market, a distribution platform and more. I think an acquisition of this sort is the most logical conclusion for the larger UK robo-advisers, although of course everything always comes down to price in the ‘build or buy’ debate.”
Barrett added: “There's an opportunity to kind of cross-sell into other products, as well as subsidise [Nutmeg].
Heather Hopkins, managing director and founder at NextWealth, agreed that Nutmeg could expand further.
“Robo advisers have struggled to gain clients but Nutmeg has built a client brand and with further investment from JPMorgan, it may be able to grow and thrive,” she said.
“Nutmeg has recently started to hire financial advisers who can support converting clients from inquiry to action. Anything that gives more consumers access to advice is good news.”
Most commentators agreed that the short-term impact on the wider advice landscape would be negligible.
“The type of clients who invest with Nutmeg have case sizes a long way away from the type of clients which financial advisers look to be serving.
“It is a totally different segment of customers.”
Chan agreed, adding: “I don't think it would affect advisers much in the short-term as the demographics and clients using so called robo-advisers are different to those of advisers.
"We may begin to see more M&A in this space," he added.
“It’s a very competitive and crowded market, and I expect that we’ll see further acquisitions moving forward as more loss-making robo-advisers exit the industry.”
sally.hickey@ft.com
