Help in Understanding Nutmeg Transfer

[Helinlouise]

Hi,

After widely reading, step one of my investment strategy is to transfer anything that has high fees, which has led me directly to a Smart Alpha Nutmeg ISA that I hold, with what I now realise is exorbitant fees of 1.09%. Luckily I have only held this since April 2021 putting £1,625 a month into it to reach the £20k limit during the 2021/22 tax year.

Reading the Smart Investor book, it says you should always transfer in specie and I would like to understand this a little more:

1) Nutmeg ISA's are handpicked by them so how can you transfer the ISA to another platform? I had assumed you couldn't but then read on their website that you can.
2) Nutmeg want to charge £20 per stock to transfer in specie. So I am assuming they transfer each individual stock (I think I am answering my own question from point 1?!). When I download the number of stocks from the Smart Alpha list, there are thousands, how do Nutmeg calculate the transfer cost?
3) Assuming the answer to point 2 is a crazy amount, is the best option to sell down the stocks and ask Nutmeg to transfer it to my iweb account and invest in another ISA from a different provider with much lower fees? I know I need to do this in a manner where I don't lose the 2021/22 ISA status.

I will ring Nutmeg tomorrow but just wanted to be forearmed before I do.

Thanks for any help.

Helen

[Gerry557]

I don't know Nutmeg so it's difficult to give a proper answer.

Normally you would ask the new provider to do the transfer. In specie means they should transfer the holdings as is. Ie your 100 shares in X and your 50 shares in Y get moved across. Its sounds like Nutmeg would then charge you x2 lots of £20 to do this example.

Another way is to sell the holdings, transfer the cash and rebuy. Being out of the market for the time it takes. From experience this was weeks to months on the occasions I've done a transfer although it was in specie in my case


I would contact Nutmeg to confirm your options and how to minimise costs of transferring. Are the holdings in some sort of fund? Does the new provider deal in the same fund?

You imply that your nutmeg holdings might be lots of small bits split over every share in the FTSE 100 for example. This implies x100 lots of £20. So probably not a recommended way to progress.

When you move what will you invest in? Does Nutmeg hold the same.

Sounds like you might need to sell your current holdings buy the new fund and then in specie transfer if you don't want to risk being out of the market or sell and transfer the cash and reinvest the cash with your new provider which might have less costs.

[clissold345]

https://www.nutmeg.com/smart-alpha-portfolios

"What do the portfolios contain?

Globally diversified portfolios of exchange traded funds (ETFs) designed to align with your risk preference and goals. The Smart Alpha portfolio range is unique by introducing research-driven security selection. Alongside passive ETFs, the Smart Alpha portfolios also include innovative active ETFs that benefit from J.P. Morgan Asset Management's research expertise and global team's experience."

I can't help with the transfer question but yes ongoing charges of 1.09% sound a bit high. Eg ongoing charges for JP Morgan Global Growth and Income (JGGI) (an investment trust) are 0.5%. (Note: I would imagine that JGGI roughly matches part of your smart alpha investment but not all of it.)

[mc2fool]

Hi,

After widely reading, step one of my investment strategy is to transfer anything that has high fees, which has led me directly to a Smart Alpha Nutmeg ISA that I hold, with what I now realise is exorbitant fees of 1.09%. Luckily I have only held this since April 2021 putting £1,625 a month into it to reach the £20k limit during the 2021/22 tax year.

Reading the Smart Investor book, it says you should always transfer in specie and I would like to understand this a little more:

1) Nutmeg ISA's are handpicked by them so how can you transfer the ISA to another platform? I had assumed you couldn't but then read on their website that you can.
2) Nutmeg want to charge £20 per stock to transfer in specie. So I am assuming they transfer each individual stock (I think I am answering my own question from point 1?!). When I download the number of stocks from the Smart Alpha list, there are thousands, how do Nutmeg calculate the transfer cost?
3) Assuming the answer to point 2 is a crazy amount, is the best option to sell down the stocks and ask Nutmeg to transfer it to my iweb account and invest in another ISA from a different provider with much lower fees? I know I need to do this in a manner where I don't lose the 2021/22 ISA status.

I will ring Nutmeg tomorrow but just wanted to be forearmed before I do.

Thanks for any help.

Helen

I don't know Nutmeg either, and methinks you need to get some more information to answer your questions.

Re (1), well, if you are referring to https://support.nutmeg.com/?article=115000355912-Withdrawing-money-from-Nutmeg is does say you can transfer out in specie, but on the other hand if you look at https://www.nutmeg.com/smart-alpha-portfolios it says:

"Alongside passive ETFs, Smart Alpha portfolios include innovative ‘active’ ETFs that benefit from the insights of J.P. Morgan’s Asset Management global team of research analysts who seek returns in excess of the respective market benchmark through security selection. These ETFs are built and managed by J.P. Morgan Asset Management ... "

So, the question then becomes whether those "custom" ETFs, and indeed, possibly the passive ones they mention at the beginning, are available outside of the Nutmeg structure. As "exchange traded" funds you'd think so but that definitely needs checking. So, first thing to do is to look through the holdings you have to see which ETFs you have and to get their TIDM (a 3 to 4 letter exchange code) and their ISIN (a much longer International Securities Identification Number).

If you want to transfer to your IWeb account you can then check those against https://www.markets.iweb-sharedealing.co.uk/etf-centre/, although it's not looking good to start with as they only have 5 J.P. Morgan ETFs listed.

Re (2), "when I download the number of stocks from the Smart Alpha list, there are thousands", that's almost certainly what's in each ETF, not individual holdings in your account. If the ETFs are transferable you just need to count the number of ETFs that will be transferred, not what's inside them.

Re (3), "transfer it to my iweb account and invest in another ISA from a different provider with much lower fees". No, you have a misunderstanding here. IWeb is an ISA provider but, like many (most?) ISA providers, and unlike Nutmeg, it doesn't provide pre-packaged or managed portfolios. You have to choose what you will put into the IWeb ISA. However, there are plenty of funds and ETFs that do provide pre-packaged/managed portfolios that you select from, but just remember that an ISA is simply a wrapper and is a separate thing from what you put inside it (even if some provide both as one).

[LondonChris]

I'm also I'm afraid to say I also am unfamiliar with Nutmeg's smart alpha product. However, I would make the following points:
1) Clearly to avoid being out of the market, a distribution in specie where possible is always the smart thing to do - as opposed to having to sell and send cash over to the new platform
2) It should be easy to establish whether a distribution in specie is feasible - as others have said does Nutmeg's product have a ticker symbol and ISIN and is the same product available on your receiving platform - if you can't find the product on another platform it is clearly unique. Nutmeg should be able to tell you whether they have created a product unique / bespoke to their platform. My guess is probably they have in which case you would have to sell it and have cash transferred. Unfortunately I am currently doing this with Scottish Widows - I have a state street (SSGA) global tracker which is white labelled as a Scottish Widows SSGA product. It is not transferrable and I having to have cash moved over instead. I also had this problem with pension transfers from St.James Place and Fidelity, both of which I have cashed out and transferred this year basically biting the bullet due to high fund fees / lack of fund choice etc.
3) If you can't do an in specie transfer, you should note that cash transfers are much quicker "typically" than in specie transfers. A Fidelity transfer I did a couple of months ago took just only 9 working days from request to cash received. In specie transfers can take many many weeks.
4) Transfers generally are quicker these days than they used to be, particularly where platforms use the Origo transfer system which reduces the need for physical paperwork transfers. Whilst c.70 platforms use Origo, I can't see Nutmeg on their customer list - or IWeb. See the attached link for a list of platforms https://origo.com/our-customers.

Good luck.

[Helinlouise]

Thank you to all who replied, this forum is helping me immensely.

I've called Nutmeg and posting this on here to help any person in my position:

Within the dashboard section of the Nutmeg account, under allocation, there is a section called 'Your Investments' which shows the total investments and their tickers. Mine being a Smart Alpha is as follows:

Code
JGEP
JUKC
JURE
JMRE
JERE
GLTL
JHYP
JRJE
JG15
JRUP
JEBP
JGST
JMBP
CPJ1
CASH

I can either transfer these all as one or at the individual level. Regardless, it is £20 per line item so in my case £20 * £14 = £280 (the bottom one is cash).

Looking these up at 'markets.iweb-sharedealing.co.uk/etf-centre/' there are only 5 JP Morgan ones so a complete transfer in-specie to Iweb cannot happen, only partial.

The transfers take between 3-4 weeks but can take longer they say.

Therefore my only option is to sell down my investment and repurchase the fund I want as:
1) All of the funds are not available in Iweb
2) I don't wish to partially transfer and sell the rest (too much admin/not interested in having so many funds to manage)

Therefore, in conclusion, I will need to take the hit from being out of the market (good or bad) - if anyone disagrees with my conclusion, please let me know as I am just learning.

Thank you to mc2fool on correcting my understanding of iweb No, you have a misunderstanding here. IWeb is an ISA provider but, like many (most?) ISA providers, and unlike Nutmeg, it doesn't provide pre-packaged or managed portfolios.
I now understand this.

Thanks

Helen

[mc2fool]

Within the dashboard section of the Nutmeg account, under allocation, there is a section called 'Your Investments' which shows the total investments and their tickers. Mine being a Smart Alpha is as follows:

Code
JGEP
JUKC
JURE
JMRE
JERE
GLTL
JHYP
JRJE
JG15
JRUP
JEBP
JGST
JMBP
CPJ1
CASH

I can either transfer these all as one or at the individual level. Regardless, it is £20 per line item so in my case £20 * £14 = £280 (the bottom one is cash).

Looking these up at 'markets.iweb-sharedealing.co.uk/etf-centre/' there are only 5 JP Morgan ones so a complete transfer in-specie to Iweb cannot happen, only partial.

Hmmm... the IWeb research centre doesn't seem to have all of the ones that IWeb actually has available!

You already have an IWeb account, right? Well, assuming so, go into it and Deal Now and try starting the buy process for each of those.

At the first stage -- where you enter the ticker and Verify -- it appears that IWeb has most of them, missing only JG15, JRUP, JEBP and JMBP from my checks. I haven't done so but to verify that each will be actually buy-able, you should then fill in the rest, to buy say 1 share, and Continue until you get to the 15 second countdown page, which you can either Cancel or just let time out, so you don't complete the transaction.

Assuming you want to keep all of them you could then ask IWeb to make the missing ones available. I've done that before and they have done so, although it did take a couple of rounds of front-line agents not quite getting it right, some computer-says-no, and a bit of a wait for it to actually happen....

[LondonChris]

What an expensive platform Nutmeg is. In fairness, most of us have been caught out at certain stages of our investing careers by high charges - whether TERs, platform fees, fx rates, transfer costs etc. If you can only partially transfer 5 investments and in any event these are not really investments that you want then selling them makes sense. Re being out of the market I would say:
1) Cash transfers should in theory be quicker than in specie transfers. I would be asking Nutmeg about their specific transfer times for simple cash transactions.
2) If you have sufficient cash balances elsewhere you can avoid being out of the market by simply adding to your equities exposure today by £20k - ie sell Nutmeg today £20k, buy £20k today of a new investment on IWeb either through a trading / general account or a new 24/5 ISA. After the Nutmeg cash transfers you can sell your trading account exposure - if you had created a 24/5 ISA your choices are slightly different. Of course this depends on you being cash rich today which might not be the case.

Good luck Helen.

[mc2fool]

Therefore my only option is to sell down my investment and repurchase the fund I want as:
1) All of the funds are not available in Iweb
2) I don't wish to partially transfer and sell the rest (too much admin/not interested in having so many funds to manage)

Well I'm not sure how you arrive at (2) 'cos it surely depends on what you want to end up with. A sell up of some on Nutmeg and then a transfer of the rest plus the cash from the sales (plus whatever was already there), and then some buys on IWeb with that cash could end up being the least faff.

It seems the best thing for you to do is simply to decide what you want to end up with in the IWeb ISA. Then how to get there will just follow.

Not being familiar with most of the tickers off hand, it seems you have (* not currently on IWeb):

JGEP - JPMorgan Global Research Enhanced Index Equity (ESG) UCITS ETF
JUKC - JPMorgan UK Equity Core UCITS ETF
JURE - JPMorgan US Research Enhanced Index Equity (ESG) UCITS ETF
JMRE - JPMorgan Global Emerging Markets Research Enhanced Index Equity(ESG) UCITS ETF
JERE - JPMorgan Europe Research Enhanced Index Equity (ESG) UCITS ETF
GLTL - SPDR Bloomberg 15+ Year Gilt UCITS ETF
JHYP - JPMorgan Global High Yield Corporate Bond Multi-Factor UCITS ETF
JRJE - JPMorgan Japan Research Enhanced Index Equity (ESG) UCITS ETF
JG15 - JPMorgan BetaBuilders UK Gilt 1-5 yr UCITS ETF *
JRUP - JPM USD Corporate Bond Research Enhanced Index (ESG) UCITS ETF *
JEBP - JPMorgan EUR Corporate Bond Research Enhanced Index (ESG) UCITS ETF *
JGST - JPMorgan GBP Ultra-Short Income UCITS ETF
JMBP - JPMorgan USD Emerging Markets Sovereign Bond UCITS ETF *
CPJ1 - iShares VII PLC - iShares Core MSCI Pac ex-Jpn ETF USD Acc

No %ages indicated of course. Is yours the 60% Equities 40% Bonds portfolio?

[Hariseldon58]

An in specie transfer of fairly unusual ETFs at a cost of £20 would not make sense and of course are you going to want to hold these going forward ?

The Nutmeg product is effectively active management as a fund of funds, with the underlying funds being ETFs.

They no doubt change the underlying holdings quite frequently , you really don’t want to base your portfolio going forward on the allocation that a particular manager chose at some point in the past.

You would be better off thinking about what your portfolio should be going forward before transferring, then make the transfer as cash, then reinvest into the new portfolio.

Clearly the market prices may move in the interim and you may win or lose from this, in the long run your savings from lower fees will more than make up for it.

[Helinlouise]

Sorry about the formatting, I have tried to put it in a table but can't get it to work.

This is my Nutmeg Smart Alpha portfolio:

Code Name Allocation
JGEP JPMorgan Global Research Enhanced Index Equity ESG UCITS ETF (GBP Hedged) 27.50%
JURE JPMorgan US Research Enhanced Index Equity ESG UCITS ETF 18.90%
JUKC JPMorgan UK Equity Core UCITS ETF 15.40%
JMRE JPMorgan Global Emerging Markets Research Enhanced Index Equity ESG UCITS ETF 7.60%
JG15 JPMorgan BetaBuilders UK Gilt 1-5 YR UCITS ETF 6.20%
JERE JPMorgan Europe Research Enhanced Index Equity ESG UCITS ETF 6.10%
GLTL SPDR Bloomberg 15+ Year Gilt UCITS ETF 5.40%
JRUP JPMorgan USD Corporate Bond Research Enhanced Index ESG UCITS ETF (GBP Hedged) 2.90%
JEBP JPMorgan EUR Corporate Bond Research Enhanced Index ESG UCITS ETF (GBP Hedged) 2.80%
JGST JPMorgan GBP Ultra-Short Income UCITS ETF 2.70%
JRJE JPMorgan Japan Research Enhanced Index Equity ESG UCITS ETF 2.10%
CPJ1 iShares Core MSCI Pacific ex Japan UCITS ETF 1%
JMBP JPMorgan USD Emerging Markets Sovereign Bond UCITS ETF (GBP Hedged) 0.50%
JHYP JPMorgan Global High Yield Corporate Bond Multi-Factor UCITS ETF (GBP Hedged) 0.50%
CASH Cash 0.40%

I've taken the view that I don't want the underlying funds going forward (I'm busy working on my strategy having read as much as I can), so no reason to pay the £20 per fund, I may as well cut my losses, chalk it down to learning and transfer the cash over. I have already used my ISA allowance for this year.

[clissold345]

... I may as well cut my losses, chalk it down to learning and transfer the cash over. ...

Good. That sounds sensible to me.