JPMorgan Chase acquires UK Robo-Advisor Nutmeg as part of overseas retail banking campaign
bought UK online wealth manager Nutmeg for an undisclosed amount, fueling expansion in retail banking outside the US
Deal for robo-advisor, which manages more than £ 3.5bn ($ 4.9bn) in assets under management, will complement plans to launch online retail bank in the UK – United as Chase in the coming months.
The UK version of Chase intends to offer a range of products, but will go first with “a new take” to current accounts, the banking giant said. Chase already has 56 million digitally active users in the United States
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“We are building Chase in the UK from the ground up using the very latest technology and placing the customer experience at the heart of our offering, principles that Nutmeg shares with us,” said Sanoke Viswanathan, Managing Director of
international consumer division.
Launched in 2012, Nutmeg is one of the country’s most popular online wealth managers. With over 140,000 clients, it is a key competitor to Wealthsimple.
Nutmeg CEO Neil Alexander said the group “will form the foundation of the bank’s global retail digital wealth management offering over the long term, complementing Chase’s launch as digital bank in UK later this year ”.
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In November 2020, the two groups joined forces to launch Smart Alpha, a Nutmeg investment product with asset allocation managed by the American group. Nutmeg also offers a range of products, including tax-free savings accounts, called ISAs, as well as retirement and general investment accounts.
Alexander, in an article published on Nutmeg’s website, said his products and services would not be affected by the deal, which is expected to be concluded later within a year of regulatory approval.
Look forward. JPMorgan Chase’s agreement to buy Nutmeg is remarkable in two ways.
The investment banking giant’s decision to partner with a young private technology-driven company underscores a strategy to position itself as a “challenger bank”. The UK retail banking scene is overcrowded, with a gang of newcomers such as Revolut and Monzo taking on the country’s established players—
Instead of diversifying, let alone opening physical branches in the UK, JPMorgan Chase seeks to fit directly into the UK’s rapidly evolving fintech ecosystem, which is one of the most valuable in the world. . Other acquisitions could follow. This is the implication for the investment bank.
But the agreement also promises to raise the stakes for the British bank and fintech more broadly. As Revolut, Monzo and others reflect on the possibility of initial multibillion-dollar public offerings, a publicly traded beast is about to enter their territory. It will also serve as a wake-up call to established retail banks in the UK, which have seen the long-term decline in physical branch traffic accelerated by the Covid-19 pandemic.