JP Morgan Chase has entered into an agreement to acquire loss-making digital wealth manager Nutmeg.
The deal, which is subject to regulatory approval, will see JP Morgan absorb Nutmeg’s customer base of 140,000 investors and £3.5bn ($5bn, €4bn) worth of assets under management.
The acquisition forms part of the US financial giant’s plans to unveil its own digital bank in the UK later this year under the Chase brand.
JP Morgan said Chase will blend “the reassurance of an established and trusted bank with a seamless customer experience”.
Sanoke Viswanathan, chief executive of international consumer at JP Morgan Chase, said: “We are building Chase in the UK from scratch using the very latest technology and putting the customer’s experience at the heart of our offering, principles that Nutmeg shares with us.
“We look forward to positioning their award winning products alongside our own, and continuing to support their innovative work in retail wealth management.”
Expansion into different markets
The soon-to-be-introduced digital bank will offer a range of products, starting with a different take on current accounts, although the offering is currently being piloted in an internal testing phase.
In the US, Chase offers a wide range of banking products to more than 56 million digitally active customers.
Set up in 2012, Nutmeg offers Isas, junior Isas, lifetime Isas, pensions and general investment accounts.
Though total assets at the robo adviser rose 70% in Q1 thanks to a 230% spike in net inflows, it has yet to turn a profit, having recorded losses of £22m in 2019 and £18.4m in 2018.
Neil Alexander, chief executive of Nutmeg, said: “Nutmeg’s customers can expect the same level of transparency, convenience and service that helped make us a leading digital wealth manager in the UK and this new chapter in our story will see Nutmeg’s customer benefit from a wider range of products and services in the future, and allow us to expand into new markets.”
JP Morgan joined forces with Nutmeg last November to roll out five risk-rated portfolios, known as its Smart Alpha range, which include JP Morgan active and passive ETFs.
The collaboration came a year after Nutmeg’s chief investment officer Shaun Port jumped ship to become a managing director at JP Morgan.
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