Terms and conditions


The terms below are effective from 9 August 2016. See the terms effective until then »

Summary


To help you understand the main points of our terms and conditions and provide some guidance on how to navigate them we’ve put together this short summary. Please remember that this is only a summary and in case of any query the full terms and conditions will prevail. The comments in this summary relate to the General Terms, except where otherwise specified.

Before you decide to invest you should be sure to retain adequate emergency cash. We view around three months' salary a good starting point. We will help you decide which Nutmeg portfolio best suits your goals. This qualifies as simplified advice, which we have permission from our regulator to provide. See our Definitions or the FCA website.

We will provide you with a discretionary investment management service, which means that we make all investment decisions on your behalf. Once you have chosen a risk level for your portfolio and sent in your money, we will invest in the assets we believe will help you reach your investment goal. When we invest for you, we do so in line with our best execution policy which means we will try and get the best outcomes for you, such as prices and speed of execution. You can read more in Appendix A: Best Execution Policy.

At the moment we invest exclusively in Exchange-Traded Funds (ETFs) though we may use other investment types in the future. Appendix B: Customer Investment Risks explains the risks of the investments we trade or may trade. Please read this Appendix carefully.

Our normal method of communication with customers is by secure email. We call it Nutmail. You must sign in to your account to read any Nutmail messages we send you. You can also contact us by web chat and telephone. Our support email address is support@nutmeg.com.

The minimum investment is £5,000. For ISAs and general investment accounts, the minimum is £500 if you also set up a £100 per month regular contribution.

Fees and charges are explained in Appendix E: Fees and Charges Schedule. We charge a straightforward annual portfolio management fee based on how much you've paid in to your portfolio. The fee ranges from 0.3% to 0.95% including VAT. There are additional admin charges if you want to make express payments or express withdrawals.

We are authorised and regulated by the Financial Conduct Authority and we will promptly respond to any complaints that you may have. All contact details are on the website as well as in these terms. We are also covered by the Financial Services Compensation Scheme, which provides protection of your investments up to a certain amount.

We store personal financial information to provide our services to you and we make every effort to protect the privacy of your information. We do disclose your information to third parties where it is relevant to the provision of our services.

You may terminate your agreement with 30 days notice. However, if you have a Nutmeg Personal Pension, you should tell us which pension provider we should send your money to. The amount of money you receive will take into account any gains or losses from market movements during the time it was invested.

If you want an ISA with us you will also need to sign up to the additional ISA terms so that you comply with the government (HMRC) regulations regarding ISAs, including the limit on total contributions in one year.

If you have a Nutmeg Personal Pension, you will need to agree to the Additional Terms for Customers with a Nutmeg Personal Pension provided by Embark Services Limited, our pension administrator.

All your assets and money are held with us and we have appointed State Street Bank and Trust as our sub-custodian (our “Sub-Custodian”), and your money is held with Barclays Bank plc (our “Client Money Bank”). You can read more in Appendix D: Custody and Client Money.

Finally, we are committed to taking measures to recognise, supervise and resolve any conflicts of interest. This is described in Appendix C: Conflicts of Interest.

We hope this summary gives you a good overview of our terms and conditions. The full details are set out below but should you have any questions, do please get in touch.

General Terms


1. IMPORTANT INFORMATION

1.1

In these Terms and Conditions, references to "us" and "we" means Nutmeg Saving and Investment Limited, trading as Nutmeg. The term "customer" and "client" and "you" and "your" means any person operating an Account with us.

1.2

These Terms and Conditions together with information you provide in your profile and your portfolio on the website www.nutmeg.com (your “Account”) constitute the Investment Management Agreement ("Agreement") between you and us for the provision of investment services as set out below. Our registered address is 5 New Street Square, London EC4A 3TW (Company No 07503666). We are authorised and regulated by the Financial Conduct Authority ("FCA"), whose address is 25 The North Colonnade, Canary Wharf, London E14 5HS, www.fca.org.uk. Our firm registration number is 552016.

1.3

These Terms and Conditions contain important information regarding the services that we will provide to you and for your own protection you should read them carefully before accepting them. If you do not understand anything in these Terms and Conditions please email support@nutmeg.com and ask for further information.

 


2. COMMENCEMENT OF THIS AGREEMENT

2.1

This Agreement will become legally binding and we will start providing the services to you once we have received confirmation of your completed Account and satisfactory money laundering verification information as set out at clause 4.1 below.

 


3. COMMUNICATIONS

3.1

We may communicate with you at any time including, when appropriate, by telephone. If as a result of any unsolicited communication from us, you enter into any investment transaction you will not have the right under Section 30 of the Financial Services and Markets Act 2000 (“FSMA”) to treat such investment transaction as unenforceable.

3.2

You can give us instructions and notifications in relation to investments we hold on your behalf (your "Portfolio") electronically using the website, and/or by communicating with us via your Account mailbox ("Nutmail"). We will not be obliged to act on any instruction and in particular we will not act on any instruction where it is illegal or against any relevant rule or regulation to do so. Where we do act on your instructions we will do so as soon as reasonably practicable once we have received them.

3.3

We may act on any instruction or other notification which we believe in good faith is from you without carrying out any further checks or investigations. We will not be liable for following an instruction or notification which is not in fact genuine or for not following or for investigating further any instruction or notification we believe may not be genuine. We will not be liable for any error of transmission or misunderstanding, or for the fraud of any other party (except in the case of our negligence, wilful default or fraud as described in clause 22 of this Agreement). We are not obliged to acknowledge receipt of your instructions.

3.4

We will send all notices, information and other correspondence to you by Nutmail and/or at the email address set out in the Client Agreement Form or such other email address as you may designate in your personal profile ("Profile") from time to time. In the event any notice, information or other correspondence is sent to you via letter, such letter will be sent to the postal address set out in the Client Agreement Form, or such postal address as you may later designate in your Profile, and will be deemed to be delivered on the second business day after posting.

3.5

We may record and monitor telephone conversations that we have with you. We will store recordings for the period required by law or for as long as we consider appropriate.

3.6

We cannot guarantee that electronic communications will be successfully delivered, or that they will be secure and virus free. We will not be liable for any loss, damage, expense, harm or inconvenience caused as a result of an email being lost, delayed, intercepted, corrupted or otherwise altered or for failing to be delivered for any reason beyond our reasonable control.

3.7

All communications in relation to services provided under this Agreement will be in English.

 


4. YOUR INFORMATION

4.1

We are required to verify your identity in accordance with UK money laundering legislation. For this reason we may use your personal data, as that phrase is defined in the EU Data Protection Directive (“personal information”), in order to carry out electronic searches on private and public databases. We will keep records of any information obtained. We may use credit reference agencies which will record that an enquiry has been made. By entering into this Agreement you confirm your acceptance of our use of credit reference agencies which will result in such a record.

4.2

In order to provide services to you we need to collect, use, share and store personal financial information about you, including your personal information. We make every effort to protect the privacy of our customers' personal information. Other than as set out below, your personal information will not be disclosed, transferred or sold to any third party for any purpose.

4.3

You authorise us to use any of your personal information which is relevant to our provision of services to you for all reasonable purposes in relation to your Portfolio. We may retain and continue to process your personal information after the termination of this Agreement or any other agreement between you and us. Your personal information may be transferred or disclosed to and/or by third parties where necessary. This enables us to provide services to you and to discharge our obligations to third parties, including relevant stock exchanges, government agencies and regulators. Your personal information may be transferred outside of the European Economic area.

4.4

With your consent, your personal information may be used by us in order to provide you with information and marketing materials in relation to our other products and services. By entering into this Agreement you confirm your wish for your personal information to be processed for these additional purposes. If you do not wish your personal information to be processed in this way, please notify us by Nutmail or by contacting the Data Protection Officer at support@nutmeg.com.

4.5

You can request copies of your personal information held by us or any service provider we appoint to provide you with the services under this Agreement by notifying us by Nutmail or by contacting the Data Protection Officer at support@nutmeg.com. We charge a fee for providing you with this information as set out in the Fees and Charges Schedule at Appendix E: Fees and Charges Schedule. You should notify us if any of the information held is incorrect.

4.6

From time to time we work with partner organisations who introduce you to our services. In these cases, you authorise us to share with the partner organisation your personal information which is relevant to providing the services to you.

 


4.7

We do not provide copies of information to your financial advisers.

 


5. CUSTOMER CATEGORISATION

5.1

Services provided by us under this Agreement will be on the basis that you are a Retail Client as defined in the FCA Handbook. This means that you are entitled to the protections that must be provided to Retail Clients under the rules contained in the FCA Handbook (the FCA Rules) and under relevant legislation. If you would like further information on the nature of these protections, please notify us by Nutmail or by contacting the Compliance Officer at support@nutmeg.com.

5.2

If you hold an account jointly or otherwise hold assets jointly, with any other person, then you and any such other person(s) shall have joint and several liability to Nutmeg. Examples of situations where such joint and several liability may arise are as follows:

  • Joint account holders: As well as joint account holders being jointly and severally liable in the way described above, any payment or accounting made by Nutmeg to any one or more of those account holders will be treated as made to all of them.

  • Trustees: As well as the trustees of any trust being jointly and severally liable to Nutmeg in the way described above, Nutmeg will treat the trustees as its client and not any beneficiary of the trust. Any payment or accounting made by Nutmeg to any one or more of the trustees will be treated as made to all of them.

  • Partners: If a partnership is Nutmeg’s client then each partner will be personally, jointly and severally liable to Nutmeg in the manner described above. Any payment or accounting made by Nutmeg to any one or more of the partners will be treated as made to all of them.

  • Agents: If you are an agent acting on behalf of someone else (whether or not that person (the “Principal”), has been identified to Nutmeg as the person for whom you act) you will be treated as Nutmeg’s client under the FCA Rules and you will also be fully liable to Nutmeg under these terms of business as if you were acting for yourself. You and your Principal will be jointly and severally liable in the manner described above.

 


6. SERVICES

6.1

The services that we will provide under the terms of this Agreement are only available to UK residents, partnerships formed under the laws of the UK or bodies incorporated in the UK which may include corporate bodies, charitable foundations and investment and unit trusts. At our discretion and in line with our regulatory permissions we may accept non-UK residents who approach us as a potential customer providing we are able to satisfy certain requirements to confirm the status and identity of such customers.

6.2

We will provide you with a number of different levels of services under the terms of this Agreement as follows:

  • simplified investment advice about which Nutmeg portfolio is right for you;

  • discretionary investment management of your Portfolio;

  • safe custody of your investments;

  • ISA management services, and

  • Personal Pension Portfolio ("Nutmeg Personal Pension"),

together (the "services").

6.3

We are responsible for the provision of post execution services subject to the terms set out in Appendix D: Custody and Client Money to this Agreement. In this capacity we have entered into agreements with:

  • our Sub-Custodian for custody and settlement services; and

  • our Client Money Bank to hold Client Money in designated bank accounts subject to FCA compliance obligations.

6.4

We have entered into an agreement with a pension scheme administrator to operate the Nutmeg Personal Pension on behalf of you where you have selected this service and become a member of a Nutmeg Personal Pension. These services will be provided to you on and subject to the terms set out in the Additional Pension Terms.

 


7. SIMPLIFIED INVESTMENT ADVICE

7.1

We provide advice using a streamlined process aiming to address straightforward investment advice needs. Simplified advice is generally appropriate for people who do not need to reduce existing debt, have adequate emergency funds and have insurance to protect their families if anything were to happen to them. Therefore you will have some disposable income or capital you wish to invest.

Before you decide to invest you should be sure that your immediate financial priorities are met.

Our advice is restricted to a specific need as expressed for your investment pot. When ensuring the advice is suitable, we do not consider your whole financial picture or existing financial products you may have. We will only advise about Nutmeg investment portfolios. We do not consider all products and services that could be suitable.

While we can help you to transfer existing investments to your Nutmeg portfolio, this will be when you instruct us to do so — this is called execution only. This is because we do not advise on the suitability of investments that we do not manage.

 


8. DISCRETIONARY MANAGEMENT SERVICE

8.1

Your Account comprises personal information about you and your risk profile in addition to different investment objectives in each of your pots (“Pots”) within your overall investment Portfolio.

8.2

You have advised us of your investment and risk objectives ("Objectives") in your Account. We will use these to manage your Account. You may change your Objectives at any time by updating your Account or by contacting us by Nutmail and/or email at support@nutmeg.com. We reserve the right to amend and reissue the Agreement following such change. You agree that the Account is fair and reasonable and an accurate reflection of your Objectives, unless you notify us of any change you wish to make or where we consider changes are necessary following a periodic review.

8.3

We will manage your Portfolio on a fully discretionary basis. This means that we will make investment decisions in relation to the cash/assets in each of your Pots within your Portfolio on your behalf in accordance with information in your Account. We will take all reasonable steps to manage each of the Pots in your Portfolio with due care and skill.

8.4

We will manage your Portfolio in accordance with the information in your Account. Provided that we do so, you grant us full authority, at our sole discretion, to enter into any kind of arrangement or transaction on your behalf including investing in any type of investments or other assets. For the avoidance of doubt, there will be no limit on the amount of your Portfolio that we may invest in any one investment, or on the proportion of your Portfolio that any one investment may make up, and there will be no limit or restriction on any particular type of investment, or currency, or on the markets on which transactions are carried out.

8.5

We may make common investment decisions which apply to a number of customer portfolios including your Portfolio.

8.6

Please see the general description of the nature and risks of the investments in which you may invest contained in Appendix B: Customer Investment Risks of these Terms and Conditions. Please note that we are unable to provide any guarantee as to the performance of any particular investments or a portfolio as a whole.

8.7

Where we receive money with no instructions, we will use our best judgement to apply the money to the relevant Pot. For example, where you have created two or more Pots and you send us money with no instruction, which differs in value to the pledges that you have set up on your Account, we will apply the money to each of the Pots in the same proportions as the original pledge amounts that you set up. Monies for The Nutmeg Personal Pension are dealt with separately from monies held in other Pots in your Account.

 


9. INITIAL AND MINIMUM INVESTMENT

9.1

For each Pot in your Portfolio, we require an initial investment above one of the following thresholds:

  • for an initial investment without a regular monthly payment, a basic threshold of £5,000; or

  • for an initial investment with a regular monthly payment of at least £100, a lower threshold of £500.

9.2

If you subsequently withdraw money to bring the value of a Pot in your Portfolio below a minimum investment of £500, we reserve the right to sell the holdings in that Pot and hold your investment as cash. You may withdraw this cash at anytime, or you may top up to a minimum of £500 at which point it will be reinvested.

 


10. SUITABILITY

10.1

Where we make a decision to deal on your behalf in relation to your Portfolio, we will assess the suitability of the transaction for you based on the information you have provided to us about your knowledge and experience of the investment field relevant to the particular kind of investment, your financial situation and your Objectives, in accordance with the relevant FCA Rules.

10.2

We will provide you with a suitability report which sets out the basis for our portfolio management strategy, as required by FCA Rules.

 


11. BEST EXECUTION

11.1

Where we deal on your behalf, we will normally be required to provide best execution, meaning that transactions entered into should be on the best terms reasonably available. To achieve best execution we will deal in accordance with our best execution policy ("Best Execution Policy"), as detailed in in Appendix A: Best Execution Policy.

 


12. POOLING

12.1

We may pool (aggregate) your transactions with those of other customers without seeking agreement from you beforehand. We will only do so where we believe that this is unlikely to disadvantage your overall position, although it may do so in relation to any specific order.

 


13. DELEGATION AND REFERRALS

13.1

We reserve the right to perform any of our obligations to you through the agency of an associate or any third party of our choosing. This means that we may appoint another person or entity to provide the services to you under this Agreement. We will take all reasonable steps to satisfy ourselves that any person whom we appoint to provide any services to you or to perform any of our obligations on our behalf is suitably competent to do so. We will ensure that all such parties commit to provide you with best execution as set out in the FCA Rules where this is applicable.

13.2

Where appropriate in light of your Account, we may offer to refer you to third parties to provide certain additional services. We will not make any such referral without your agreement. We may also accept referrals of business from third parties.

 


14. FEES AND CHARGES

14.1

Our fees and charges are calculated on the basis and at the rates shown and are payable as set out in the Fees and Charges Schedule at Appendix E: Fees and Charges Schedule. We reserve the right to change these rates from time to time and will notify you of any such changes by email.

14.2

We may deduct any amounts payable by you to us from your Account. If the available funds are insufficient, we may sell assets held as part of your Account to cover such charges.

14.3

Where we invest in collective investment schemes, which might include unit trusts, investment trusts and open ended investment companies we may receive a commission from the manager of the collective investment scheme invested in. In these circumstances we will credit your Portfolio with the amount of the commission.

14.4

We may pay (or receive from third parties), fees in relation to referrals of business. Please also see Appendix C: Conflicts of Interest.

14.5

We may receive payment from or share charges with a third party. Further information about such payments or shared charges is available on request.

 


15. STATEMENTS AND REPORTS

15.1

In line with providing you with discretionary management services, we will provide you with valuation reports electronically every six months, dated 5th October and 5th April. These reports will include details of all transactions during the relevant period, details of the contents of your Account, the current market value and the basis of valuation, income and interest and fees charged. You may request the valuation reports to be provided quarterly to you by notifying us by Nutmail.

15.2

If your employer requires confirmation we will provide a letter certifying the provision of discretionary management services. In general most employers will accept an electronic copy of this letter which we will provide free of charge. If however you require an original signed copy we can post this to you, the fees for which are defined in Appendix E: Fees and Charges Schedule. Requests to issue certification letters should be sent to us by Nutmail.

 


16. EXECUTION VENUES AND COUNTERPARTIES

16.1

Unless otherwise expressly agreed in advance in writing, we may deal on any markets or exchanges and with any counterparties that we believe provide the best outcome reasonably available. All transactions will be carried out in accordance with the rules and regulations of the relevant market or exchange, and we may take any steps as may be required or permitted by such rules and regulations and/or by appropriate market practice.

 


17. CLIENT MONEY

17.1

Any cash from time to time held in your Account ("Client Money") will be held in accordance with the FCA client money rules as set out in the FCA Rules in one or more segregated accounts with an approved bank. Please also see Appendix D: Custody and Client Money. Client Money accounts may include the balances of more than one client. Client Money may also be placed on overnight or short-term deposit. We will act in good faith and with due diligence in the selection and monitoring of banks holding Client Money. Where relevant you will be responsible for any additional income tax liability which may be incurred.

17.2

We may operate Client Money accounts outside the UK and therefore please note that:

  • different legal and regulatory provisions will exist outside the UK and the protections may not be equivalent to those available in the UK. In the event that a bank outside the UK defaults, otherwise fails or is unable to meet its obligations, money held on behalf of customers may be treated differently than if the money was held in the UK; and

  • we will only hold customer money in an account outside the UK where the relevant bank has confirmed that all money standing to the credit of the account is held by it as trustee and that the bank is not entitled to combine or set off the account in respect of any money owed to it on any other account held with it, whether in our name or not.

17.3

Customer money may be passed by us to a settlement agent in a jurisdiction outside the UK. If the settlement agent defaults, fails or is unable to meet its obligations, customer money may be treated differently from the position which would apply if the money was held in the UK.

17.4

We reserve the right to only make external payments to and to accept payments from the bank account stated in your Account.

 


18. INCOME

18.1

Income earned on the investments held in your Portfolio which is payable to you will be remitted to your Portfolio and may be reinvested.

 


19. INTEREST

19.1

Interest earned on cash in your Portfolio is calculated on at least a half annual basis at a rate which will not be less than that set out in Appendix E: Fees and Charges Schedule. Interest earned on cash will be remitted to your Portfolio and may be reinvested. Any interest paid to you will be held in your account in accordance with the FCA client money rules.

 


20. CUSTODY AND NOMINEE COMPANIES

20.1

We are authorised by the FCA to act as your Custodian. This means that we are responsible for the safekeeping of your Portfolio. We have entered into agreements with:

  • our Sub-Custodian for custody and settlement services;

  • our Client Money Bank to hold Client Money in designated bank accounts subject to our obligations under the FCA Rules.

Further details are in Appendix D: Custody and Client Money.

 

20.2

We are not obliged to provide prior notice to you before terminating our relationship with our Sub-Custodian or Client Money Bank, or appointing replacement or additional parties. We will notify you of the identity of any replacement we may appoint.

 


21. CONFLICTS OF INTEREST

21.1

We or anyone connected with us, may carry out certain transactions for you where we, or another customer of ours, have a duty that may conflict with our duty to you. We will manage any such conflict or potential conflict to ensure that it does not materially affect the transactions we carry out for you. We will inform you if we consider that we cannot adequately manage a conflict.

21.2

Our Conflicts of Interest Policy is detailed in Appendix C: Conflicts of Interest. This sets out the types of actual or potential conflicts of interest which may arise given the nature of our business and provides details of how these are managed. Further details and updates of this policy can be provided on request.

 


22. LIABILITY

22.1

We accept responsibility for any loss, damages or costs suffered or incurred by you only to the extent that such loss arises directly from our gross negligence, wilful default, fraud, and/or our deliberate and wilful breach of any duties which we owe you under FSMA, rules and regulations made under FSMA or FCA Rules. We will not be liable for any other losses, damages or costs suffered or incurred by you.

22.2

We will take reasonable care in the assessment and appointment of Sub-Custodians, pension scheme administrators, bankers, counterparties, agents and other third parties. We accept responsibility for any loss, damages or costs incurred by you only where these arise from our, negligence, wilful default or fraud in the assessment or appointment of such persons. We will not be responsible in any other circumstance for the actions of any such third parties.

22.3

We do not accept responsibility for any loss, damages or costs you may incur as a result of any cause beyond our reasonable control.

22.4

All tax matters relating to your own tax position are your own responsibility and we have no responsibility towards you with regard to your personal tax position.

22.5

Where you have selected a Nutmeg Personal Pension, we do not take responsibility in relation to the transfer of benefits from another registered pension scheme to your plan. The responsibility of Nutmeg for any money or investments only arises when such money or investments become part of your plan.

22.6

You will be liable to us for any cost, expense, loss or any damage incurred by us (including but not limited to professional advisors' fees) arising from your breach of this Agreement, negligence, wilful default or fraud.

 


23. DEPOSITS AND WITHDRAWALS

23.1 Deposits

We accept payment from a personal or joint UK account which you're authorised to use by the following methods:

  • Debit Card;

  • Direct Debit; and

  • Bank Transfer.

When you make a payment by Debit Card, this payment will be processed by our provider Stripe, who is authorised as an e-money firm and is therefore, subject to the Payment Services Regulations. These payments typically take 3 business days to reach us (with a maximum of 7 business days), during which time the money is held by Stripe in an account protected by Client Money rules at Wells Fargo, London branch in the UK.

When you make a payment by Direct Debit, this payment will be processed by our provider GoCardless, who is authorised as a payment services firm and therefore, subject to the Payment Services Regulations. These payments typically take 2 business days to reach us (with a maximum of 7 business days), during which time the money is held by GoCardless in an account protected by Client Money rules at Royal Bank of Scotland.

23.2 Withdrawals

Where we pay out money to you by Bank Transfer, we will pay the money into an account nominated by you upon settlement of any assets in your account that must be converted to cash in order to make such payment.

Where you pay money into your account by Debit Card, and you request a withdrawal within 60 calendar days, we reserve the right to return funds to the same Debit Card.

23.3 Chargebacks

When you cancel a Debit Card payment (“chargeback”), we will debit your Account by the amount being reimbursed. In the event that there is insufficient money in your Account we will convert assets in your account into cash as required and hold you liable if the account is in debit.

23.4 Direct Debit

If you ask to cancel a Direct Debit payment after we have claimed the funds, we will return the funds and debit your Account. In the event that we need to convert some of your assets to cash in order to settle amounts outstanding on your account, you may incur a profit or loss. If your Account becomes overdrawn we will contact you in order to settle amounts outstanding on your account.

23.5 In Specie Transfers

We typically only transfer cash to or from you. In exceptional circumstances where we agree to transfer an account 'in-specie', we will levy a charge per investment (line of stock) as itemised in Appendix E4.

 


24. OUR DUTIES TO YOU

24.1

No provision of this Agreement will be deemed to restrict, qualify or exclude any duty owed to you under FSMA or the FCA Rules. We do not, however, owe you any further duties except as expressly set out in this Agreement.

 


25. AMENDING THIS AGREEMENT

25.1

We may amend this Agreement by giving you 10 business days' notice by Nutmail and/or email. If we are required to amend this Agreement for reasons of compliance with the FCA Rules, or any other applicable law or regulation, however, we may do so with immediate effect.

 


26. COMPLAINTS

26.1

Should you have any complaints in relation to the services, please notify us by Nutmail and/or by emailing the Head of Customer Support at support@nutmeg.com. We will aim to acknowledge your complaint promptly, investigate the circumstances and report the results to you.

26.2

If your complaint is unresolved 8 weeks from the date you first made the complaint you may refer it directly to The Financial Ombudsman Service ("FOS"). The address of FOS is Exchange Tower, London E14 9SR www.financial-ombudsman.org.uk. Certain customers, such as larger companies and trusts may not have access to the Financial Ombudsman Service.

You can use the European Online Dispute Resolution platform at ec.europa.eu/consumers/odr to verify this.

 


27. COMPENSATION

27.1

Nutmeg is covered by the Financial Services Compensation Scheme ("FSCS"). You may be entitled to compensation from the FSCS in the event that we have stopped trading or are declared to be in default and we cannot meet our obligations. This depends upon the type of business and the circumstances of the claim. The FSCS offers different levels of cover for different types of business. Most types of investment business are covered currently for 100 per cent of the first £50,000. Further information about compensation arrangements is available from the FSCS (www.fscs.org.uk).

27.2

In the event that an investment is unable to meet its obligations, this will not in itself entitle investors to compensation from the FSCS. Likewise if the performance of a fund does not match any illustrated benefits, investors will not, for that reason alone, be entitled to any compensation under the FSCS.

 


28. TERMINATION

28.1

You may terminate this Agreement at any time, to take effect 30 days after we receive notice from you via Nutmail or through the website, subject to the settlement of all outstanding transactions. The charges as outlined in the Fees and Charges Schedule will apply. We may pass on to you charges levied by third parties as a result of the termination of this Agreement. Transactions already in progress will be completed in the normal course of business.

28.2

We may terminate this Agreement by giving you 30 business days' notice by email, subject to the settlement of all outstanding transactions.

28.3

No additional amount will be payable solely for terminating the Agreement, except that you will pay a due proportion of our fees to the date of termination, the transfer charges as outlined in the relevant Fees and Charges Schedule, any expenses reasonably incurred by us in giving effect to such termination and any losses incurred in settling or concluding outstanding obligations.

28.4

We may deduct these fees and expenses from any money forming part of your Portfolio and/or sell sufficient assets from your Portfolio to cover such fees and expenses.

28.5

On termination of this Agreement, we will, following payment in accordance with clause 28.3 and settlement of all outstanding transactions, re-register your assets and transfer your cash as you reasonably request. If you make no reasonable request we will take steps to re-register your assets in your name and to transfer your cash to you at our discretion.

28.6

After you close your Account, it is possible that further monies may reach your account (for example, dividend payments). However if the balance of your account is less than £25, six years after the closing of your Account and we have made at least one attempt to contact you to which you have not responded within 28 days, we reserve the right to pay that small balance to a registered charity of our choice.

28.7

After you close your Account, it is possible that further monies may reach your account (for example, dividend payments). However if the balance of your account is less than £1, six months after the closing of your Account, we reserve the right to pay that small balance to a registered charity of our choice.

 


29. ASSIGNMENT

29.1

You do not have the right to assign or otherwise transfer to any other party your rights or obligations under this Agreement.

29.2

We may assign our rights and obligations under this Agreement at any time, and will send you notice by Nutmail and/or email of any such assignment prior to its taking effect.

 


30. INACTIVE ACCOUNTS

30.1

We will mark any Account as dormant if it has been inactive for at least one year to protect both you and us. If you ask us, we will tell you how you can access your Account. If you have money in a dormant Account, it will remain your property (or if you die it will form part of your estate).

 


31. ENTIRE AGREEMENT

31.1

This Agreement constitutes the entire agreement between you and us and supersedes and extinguishes all previous agreements and arrangements between us, whether written or oral, relating to its subject matter.

 


32. GOVERNING LAW

32.1

This Agreement and any dispute or claim arising out of or in connection with it (including non-contractual disputes or claims) will be governed by and construed in accordance with the law of England and Wales.

32.2

The parties irrevocably agree that the courts of England and Wales will have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement (including non-contractual disputes or claims).

 


33. CANCELLATION

33.1

You have a period of 14 days, beginning on the date on which your Account is opened or the date on which you receive a copy of these Terms and Conditions and other related documents, whichever is the latest, within which to cancel your Account. Nutmeg will sell any investments made on your behalf but will not be responsible for any market loss that you may incur as a result.

 


34. THIRD PARTIES

34.1

A person who is not a party to this agreement cannot enforce or enjoy the benefit of any term of this Agreement under the Contracts (Rights of Third Parties) Act 1999.

 


35. TREATING CUSTOMERS FAIRLY

35.1

Our regulator, the FCA, stipulates that financial firms operate in line with the principles known as 'treating customers fairly' and 'fair customer outcomes'. More information outlining these principles can be found on the FCA website at www.fca.gov.uk.

35.2

Whilst Nutmeg is wholly committed to addressing these principles, it also seeks to exceed them through customer-centric design of its products and services.

 


36. SUBJECT ACCESS REQUEST

36.1

You can request the information we hold on file for you at any time by sending us a Nutmail entitled ‘Subject Access Request’, detailing the information that you are looking for. You should confirm in your Nutmail that you are happy to accept the charge as covered in Appendix E4.1. We will write back to you with the information required, generally within 10 working days.

36.2

From time to time we also receive requests from third parties, such as financial advisers, for information that we hold on file for you. These requests are often coupled with a lengthy questionnaire requesting details of your holdings with us. In this instance we will send you a Nutmail to ask whether you authorise us to respond to the request and to levy the charge covered in Appendix E4.1.

 


37. DEFINITIONS

Business Days
This means any day on which the London Stock Exchange is open for trading

CCP
This stands for central counterparty, which is typically an institution that acts as an intermediary between two market participants. The seller of a security sells to the central counterparty. The central counterparty simultaneously sells to the buyer. This means that if one party defaults then the central counterparty will absorb the loss. This reduces the amount of counterparty risk that market participants are exposed to.

Certain markets that Nutmeg trades in on your behalf will involve a CCP and such transactions will be subject to the rules of the CCP.

Charge
A charge does not involve a transfer of ownership but gives a degree of control to a third party over any dealing or disposal of the asset.

Clearing and Settlement Services The process by which, once an investment has been bought or sold on your behalf, the money is transferred from the buyer to the seller and the investments or the title to the investments is transferred from the seller to the buyer.

CSD
This stands for central securities depository which is a financial institution that custodies securities and provides securities settlement services to one or more markets.

When settling a transaction on your behalf Nutmeg may have to settle such transaction through a central securities depository or other securities settlement system and the transactions will be subject to the rules of the CSD.

Custodian
We are your Custodian and when acting in that role we are authorised by FCA to keep safe and administer your investments in accordance with the FCA's Client Assets Rules.

Dealing or Execution Services
These terms relate to the buying or selling of investments on your behalf.

Joint and Several Liability
If joint and several liability applies, the effect is that both you and the other person(s) separately promise to meet all obligations under these terms of business in respect of the account either (1) jointly with the other person(s); and (2) individually.

Lien
A Lien allows the person holding the asset to withhold or retain such asset pending the satisfaction of your obligations to them.

Margin or Collateral
This is where your money or investments are passed to a Relevant Party in order to provide security against the performance of obligations.

Mortgage
A mortgage transfers the ownership of an asset to a third party on the condition that it will be re-transferred on the discharge of the obligations owed to that third party.

Netting
Netting is the process under which Nutmeg and/or the counterparty, CCP, CSD or other body concerned with settling a transaction are entitled to reduce their obligations to each other by setting off their obligations to deliver cash or securities to one another. This will give a single amount owing to one party from the other rather than a two-way payment. This single amount will then be paid or delivered to the relevant party.

Nominee Company
A nominee company is one which is used solely for holding investments separately and which does not carry on any other business.

Relevant Party
This includes (but is not limited to) an exchange, clearing house, intermediate broker, settlement agent or a counterparty dealt with directly (over the counter) outside of any exchange. The Relevant Party may be located in the UK or elsewhere.

Safe Custody Services
Service relating to the safekeeping and administration of any investments held by Nutmeg or its nominee company on your behalf.

Set-Off
This may arise where both you and Nutmeg owe sums to each other. In such circumstances Nutmeg may deduct any sums owed to it by you from any sums that are owed by Nutmeg to you so as to either eliminate or reduce Nutmeg’s liability to you.

Simplified Advice
Advice that is limited to one or more of a customer's specific needs and does not involve analysis of the customer's circumstances that are not directly relevant to those needs.

Sub-Custodian
This refers to a third party custodian (or its nominee company) who Nutmeg selects under the FCA Rules to act on its behalf to keep safe and administer your investments.

Time shall be of the Essence
The use of this term in relation to any payment, delivery or other obligation you have to Nutmeg means that Nutmeg shall be entitled to terminate these terms of business and, if appropriate, claim damages from you if you fail to perform your obligation in accordance with the time specified. It is intended to ensure that the relevant deadlines are strictly complied with.

 


ADDITIONAL TERMS FOR CUSTOMERS WITH STOCKS AND SHARES ISAS

This section contains additional terms and conditions applicable to the Stocks and Shares ISA.

It should be read in conjunction with our Terms and Conditions for the provision of investment services. The Agreement for your Stocks and Shares ISA will consist of your Account, the Terms and Conditions, these Additional Terms and the Nutmeg Stocks and Shares ISA Application Form on the website and/or Nutmeg ISA Transfer Form.

38. IMPORTANT INFORMATION

38.1

You are subscribing to a Stocks and Shares ISA for the current tax year and each subsequent tax year by sending funds from your bank or transferring a current tax year ISA.

38.2

You can only subscribe to one Stocks and Shares ISA within each tax year.

38.3

To subscribe for a Stocks and Shares ISA you have to be a UK resident aged 18 or over.

38.4

This agreement will commence on the day we have both a valid application and receipt of your first subscription, or where you are transferring to us from another ISA manager, on the day we have both a valid transfer application form and receipt of the proceeds of transfer from your previous ISA manager.

 


39. INVESTMENT STRATEGY

39.1

Your Stocks and Shares ISA will be invested on a discretionary basis in accordance with your Objectives set out by you in your Account subject always to the requirements of HM Revenue & Customs ("HMRC").

39.2

For each new tax year, all contributions to your Account will be allocated first to your Stocks and Shares ISA until the maximum subscription is reached for that year, or until your own pre-set limit. Once the maximum subscription or your own pre-set limit is reached, future contributions are allocated to the non-ISA remainder of your Account.

 


40. INVESTING IN A STOCKS AND SHARES ISA

40.1

Investments into a Stocks and Shares ISA may be by cheque, bank transfer, transfer of cash from an existing Portfolio held with us or by transfer from another ISA manager (subject to HMRC's ISA transfer rules).

40.2

You will at all times be the beneficial owner of any investments held in your ISA. You must not use the investments and/or cash in your ISA as security for a loan except to the extent permitted by the Individual Savings Account Regulations 1998 ("Regulations").

40.3

Your investments will be registered in the name of Nutmeg. You will at all times remain the beneficial owner of any of your investments.

40.4

The total of contributions to be invested in any tax year will not be more than the maximum permitted to be invested in stocks and shares by the Regulations for that tax year.

 


41. SHAREHOLDERS' RIGHTS

41.1

If you so request in writing, we will arrange for you to:

  • receive the report, accounts and other information issued by a company, attend and vote at such shareholders’ meetings or unit holders’ meetings. Where you do this, we shall use reasonable endeavours, where possible, to make appropriate arrangements on the terms and within the timescales we may impose; and

  • exercise any voting rights attached to your investments, whether exercisable at an annual general meeting ("AGM") or otherwise. We are not obliged to but we may notify you of any AGMs applicable to your investments.


42. WITHDRAWING YOUR ISA INVESTMENT

42.1

You will not incur tax liabilities by withdrawing. We will send an acknowledgment of your instructions to you at the email address you designate in your Account.

42.2

At your request, we will transfer all or part of your ISA investments (with the associated rights and obligations) to another ISA manager, subject to HMRC's ISA transfer rules.

42.3

We will process your withdrawal or transfer request promptly and normally within the 30 day maximum period stipulated by HMRC, subject to circumstances outside our control. Should you wish the withdrawal or transfer to take place at a particular time, we will endeavour to meet this request. However, in the case of transfers, we are reliant on the receiving manager and cannot guarantee to do so.

 


43. ISA REGULATIONS

43.1

You authorise us to disclose to HMRC all such information as required by law. We will notify you by email if, by reason of any failure to satisfy the provisions of the Regulations, your Stocks and Shares ISA becomes void.

 


44. DELEGATION

44.1

We will satisfy ourselves that any person to whom we delegate any of our functions or responsibilities under the terms agreed with you is competent to carry out any of those functions and responsibilities.

 


45. TIMING

45.1

These terms and conditions are effective from 22 December 2014.

ADDITIONAL TERMS FOR CUSTOMERS WITH A NUTMEG PERSONAL PENSION

This section contains additional pension terms and conditions (“the Additional Pension Terms”) applicable to your membership of the Nutmeg personal pension (your “plan”). These Additional Pension Terms apply to you if you have applied to become a member of a Nutmeg Personal Pension.

All defined terms in these Additional Pension Terms relate to the Additional Pension Terms only and should not be taken as defined terms in the full scope of this Agreement.

Unless otherwise specified, if you are required under these Additional Pension Terms to give us any instructions in writing you should contact us by Nutmail.


P1. LEGAL AGREEMENT

P1.1

We have entered into an agreement for Embark Services Limited ("ESL") to operate the Nutmeg Personal Pension on behalf of our clients. ESL is a company registered in England, company number 2089815, and is authorised and regulated by the Financial Conduct Authority ("FCA").

P1.2

The agreement for your plan is between you and ESL, and will consist of these Additional Pension Terms and the declarations contained in the on-line application.

P1.3

The agreement for your plan will commence on the date that ESL accepts your application for membership of the Nutmeg Personal Pension.

 


P2. THE SCHEME

P2.1

The Nutmeg Personal Pension ("the Scheme") is a registered pension scheme. It is governed by the Trust Deed and Rules, a copy of which is available on our website. ESL is the administrator of the Scheme.

P2.2

The trustee of the Scheme is Embark Trustees Limited ("the trustee"). The trustee is the owner of the sums and assets held under the Scheme for the benefit of scheme members. The trustee performs its obligations under the Rules according to the instructions of ESL.

P2.3

If ESL accepts your application for membership of the Scheme it will open an individual plan in your name under the Scheme. In order to join the Scheme you must be resident in the UK for tax purposes, aged 18 years or over and aged under 75 years.

 


P3. INVESTMENT STRATEGY

P3.1

Your plan will be invested on a discretionary basis in accordance with your Objectives, set out by you in your Account, subject always to the requirements of:

  • the agreement between us and ESL for the operation of the Scheme; and

  • the Trust Deed and Rules.

P3.2

ESL will direct the trustee to open an Account with us to manage the investments in your plan. By agreeing to these Additional Pension Terms you authorise ESL to give this instruction on your behalf.

P3.3

The investments and money in your plan are held on the trustee's behalf using the custodian arrangements as described in this Agreement

 


P4. CONTRIBUTIONS

P4.1

Contributions described in this section can be made to your plan, but not if your plan has been used to commence drawdown pension. Contributions cannot be paid to a beneficiary's plan.

P4.2

Contributions can be made to your plan by you and your employer.

P4.3

Regular contributions must be paid by direct debit only on a monthly basis. Single contributions must be paid by direct debit.

P4.4

ESL reserves the right to refuse contributions paid by any other method including, but not restricted to, cheque payments.

P4.5

Fees and expenses continue to be incurred in respect of your plan whether or not you are contributing.

P4.6

All contributions must be paid in cash and in sterling.

Tax relief

P4.7

ESL claims basic rate tax relief from HMRC on the contributions made by you. ESL will apply basic rate tax relief to eligible contributions at the point the contribution is made unless this service ("Pre-funding") is terminated under section P4.10.

P4.8

You must tell ESL if you are not entitled to tax relief on all or part of the contributions. In the event that contributions over the tax relief limit are paid into your plan, no tax relief will be available on the excess.

P4.9

In the event you exceed the annual allowance under the Finance Act, there is usually a tax charge on you. The annual allowance is the maximum amount of pension savings under UK tax-approved schemes you can accrue each year without incurring the tax charge. You are responsible for notifying the local Inspector of Taxes if the annual allowance is exceeded. The annual allowance is separate from the limits on tax relief which can be claimed on contributions. You should seek financial advice if you are planning to make contributions over the annual allowance.

P4.10

Without prejudice to section P18, ESL can terminate or suspend the Pre-funding service at any time. If ESL chooses to terminate or suspend the Pre-funding service basic rate tax relief will be applied to all eligible contributions at the point the tax relief is received from HMRC, which is typically within four to eight weeks of the date a contribution is paid.

Refund of excess contributions

P4.11

If you have paid pension contributions over the tax relief limit, you can request a refund in respect of the excess on the terms permitted by the Finance Act. ESL can agree to refund the lower of the excess contribution and the value of your plan. HMRC require ESL to repay to it the full amount of the basic rate tax relief that has been claimed on the excess contribution. Any refund to you will be subject to the value of your plan being sufficient to make the required payment to HMRC

P4.12

Any request for a refund you make under section P4.11 must be made to us in writing. The Finance Act may prescribe a time limit for making your request.

P4.13

Any investment loss or growth in respect of refunded contributions is deemed to have occurred outside the Scheme.

P4.14

Any contributions are paid which result in the annual allowance being exceeded, you cannot avoid the annual allowance charge simply by obtaining a refund of contributions from ESL.

 


P5. TRANSFERS IN

P5.1

With the agreement of ESL, you can transfer benefits from another registered pension scheme to your plan. You will not be able to transfer any defined benefits arrangements to your plan.

P5.2

Subject to section P8.4, if you became entitled to drawdown pension on the death of a member under another registered pension scheme you can apply to transfer the entitlement into your plan for the purpose of continuation of drawdown pension. If ESL accepts the application you will be treated as a beneficiary.

P5.3

You are responsible for ensuring that a transfer of benefits is in your best interests. Neither ESL nor the trustee provides advice and ESL's acceptance of any transfer is in no way an endorsement of the suitability for you of the transfer.

P5.4

Transfers-in must be made by cash payment by direct credit and in sterling.

Transfer Declaration

P5.5

When making a transfer to the Nutmeg Personal Pension, you are required to make the following declarations to the provider of the transferring scheme (“the current provider”) and, where the context requires, to ESL:

  • I authorise and instruct you to transfer funds from the plan(s) as listed in my online application directly to ESL. Where you have asked me to give you any original policy document(s) in return for the transfer of funds and I am unable to do so, I promise that I will be responsible for any losses and/or expenses which are the result, and which a reasonable person would consider to be the probable result, of any untrue, misleading or inaccurate information deliberately or carelessly given by me, or on my behalf, either in this form or with respect to benefits from the plan.

  • I authorise you to release all necessary information to ESL to enable the transfer of funds to ESL.

  • I authorise you to obtain from and release to any financial intermediary named in this application any additional information that may be required to enable the transfer of funds.

  • If an employer is paying contributions to any of the plans as listed in my online application, I authorise you release to that employer any relevant information in connection with the transfer of funds from the relevant plan(s).

  • Until this application is accepted and complete, ESL’s responsibility is limited to the return of the total payment(s) to the current provider(s).

  • Where the payment(s) made to ESL represent(s) all of the funds under the plan(s) listed in my online application, then payment made as requested will mean that I shall no longer be entitled to receive pension or other benefits from the plan(s) listed.

  • Where the payment(s) made to ESL represent(s) part of the funds under the plan(s) listed in my online application, then payment made as instructed will mean that I shall no longer be entitled to receive pension or other benefits from that part of the plan(s) represented by the payment(s).

  • I promise to accept responsibility in respect of any claims, losses and expenses that ESL and the current provider(s) may incur as a result of any incorrect information provided by me in this application or of any failure on my part to comply with any aspect of this application.

P5.6

When making a transfer of benefits that have already been designated for the payment of a drawdown pension to the Nutmeg Personal Pension, you are required to make the following declarations to the provider of the transferring scheme ("the current provider") and, where the context requires, to ESL:

  • I authorise and instruct you to transfer funds from the plan(s) as listed in my online application directly to ESL. Where you have asked me to give you any original policy document(s) in return for the transfer of funds and I am unable to do so, I promise that I will be responsible for any losses and/or expenses which are the result, and which a reasonable person would consider to be the probable result, of any untrue, misleading or inaccurate information deliberately or carelessly given by me, or on my behalf, either in this form or with respect to benefits from the plan.

  • I authorise you to release all necessary information to ESL to enable the transfer of funds to ESL.

  • I authorise you to obtain from and release to any financial intermediary named in this application any additional information that may be required to enable the transfer of funds.

  • If an employer is paying contributions to any of the plans as listed in my online application, I authorise you release to that employer any relevant information in connection with the transfer of funds from the relevant plan(s).

  • Until this application is accepted and complete, ESL's responsibility is limited to the return of the total payment(s) to the current provider(s).

  • Where the payment(s) made to ESL represent(s) all of the funds under the plan(s) listed in my online application, then payment made as requested will mean that I shall no longer be entitled to receive pension or other benefits from the plan(s) listed.

  • Where the payment(s) made to ESL represent(s) part of the funds under the plan(s) listed in my online application, then payment made as instructed will mean that I shall no longer be entitled to receive pension or other benefits from that part of the plan(s) represented by the payment(s).

  • I promise to accept responsibility in respect of any claims, losses and expenses that ESL and the current provider(s) may incur as a result of any incorrect information provided by me in this application or of any failure on my part to comply with any aspect of this application.

 


P6. TRANSFERS OUT

P6.1

You can transfer all or part of your plan to another registered pension scheme or qualifying recognised overseas pension scheme if the transfer is not an unauthorised payment. A partial transfer of a plan allocated for drawdown pension is not permitted. The transfer is made as soon as reasonably practicable.

P6.2

Transfers out are made by cash payment.

 


P7. TAKING BENEFITS

P7.1

You can take benefits from the normal minimum pension age under the Finance Act in either or both of the following ways by instructing us in writing:

  • buy a lifetime annuity from an annuity provider in your name with the balance of all or part of a pension fund (after any pension commencement lump sum as described in section P7.2 below);

  • take drawdown pension with the balance of all or part of a pension fund (after any pension commencement lump sum as described in section P7.2 below) — see section P8.

P7.2

Each option can be taken with or without a pension commencement lump sum. Normally, the maximum lump sum will be 25% of the value of the part of your plan being used to provide these benefits. A higher or lower amount might be available if you had transitional rights in respect of benefits earned before 6 April 2006 under schedule 36 of the Finance Act and you meet the conditions under it. Tax will not normally be payable on the lump sum. The lump sum will be paid once cash is available in your designated account.

P7.3

When you commence taking benefits from your plan, the value of the part of your plan being used for benefits must be tested against the lifetime allowance, as set by the Finance Act. A test against the lifetime allowance will also be made in other circumstances set by the Finance Act. If the lifetime allowance is exceeded, there is a tax charge. ESL will deduct the tax charge from your plan. You must provide us with the information necessary for ESL to calculate the tax charge. You are responsible for any further tax charges that may arise as a result of that information being incorrect or failing to be provided.

P7.4

You may be able to take benefits before the normal minimum pension age:

  • if ESL is satisfied that you are in ill health, as defined in the Finance Act;

  • if you had transitional rights at 6 April 2006 to a protected pension age under Schedule 36 of the Finance Act and you satisfy the conditions; or

  • as a serious ill health lump sum, if you satisfy the conditions in the Finance Act for a serious ill health lump sum. The tax treatment of a serious ill health lump sum is set by the Finance Act.

P7.5

You are responsible for ensuring that there is enough cleared money in the designated account available in good time to pay any benefits you have chosen to take. If there is not enough cleared money in the designated account to pay the benefits ESL will instruct the sale of assets within your plan under the procedure described in section P12. Depending on how you have chosen to invest your plan there may be an unavoidable delay in selling the assets, which could delay the benefit payment.

 


P8. DRAWDOWN PENSION

P8.1

You can draw income from your plan by allocating your plan to provide flexi-access drawdown pension, if you are entitled to take benefits under section P7 and ESL accepts your application for drawdown pension.

P8.2

With flexi-access drawdown pension, you can take any level of income you choose, and you can choose not to take any income at all after having taken your pension commencement lump sum. You can increase or reduce the amount of income being drawn or ask for an extra one-off flexi-access drawdown pension payment. You can choose for it to be paid on a monthly, quarterly, semi-annual or annual basis.

P8.3

If you wish to change the amount of flexi-access drawdown pension being drawn from your plan you should instruct us in writing.

P8.4

With the agreement of ESL you can transfer in benefits previously allocated to pay a capped drawdown pension under another registered pension scheme, but at the point of the transfer you must agree to convert the capped drawdown pension to a flexi-access drawdown pension. Without your agreement under this section P8.4, ESL will not accept the transfer.

 


P9. BENEFITS FOLLOWING MEMBER'S DEATH

P9.1

On your death ESL will use your remaining pension fund in either or both of the following ways as ESL in its absolute discretion determines:

  • to provide pension income in accordance with section P9.3 for any one or more beneficiaries and, if more than one, in such proportions as it decides; and

  • to pay one or more lump sum death benefits in accordance with section P9.4.

P9.2

ESL will write to your personal representatives or potential beneficiaries (as applicable) with details of the ways in which benefits can be provided.

P9.3

A beneficiary who becomes entitled to a pension under section P9.1 must (i) use all or part of the pension fund to buy a lifetime annuity in the beneficiary's name or (ii) apply to take income as drawdown pension (see section P8) from the pension fund. Any application for drawdown pension must be made using ESL's prescribed application form, which includes the beneficiary's acceptance of these Additional Pension Terms. ESL can decline an application if it would, in its opinion, limit or restrict in any way its ability to administer the Scheme.

P9.4

If ESL decides to pay one or more lump sum benefits and ESL is satisfied that at the time of your death your benefits are subject to a valid trust, ESL will apply the pension fund allocated for lump sum benefit(s) to the trustees of that trust. A "valid trust" is one which is separate from the Scheme and under which no beneficial interest in a benefit can be payable to you, your estate or your legal personal representatives. If there is no such trust, the pension fund ESL has decided to apply as lump sum benefit(s) is paid to one or more recipients as ESL decides (from the range of possible "lump sum beneficiaries", as defined in the Rules) and in such proportions as ESL decides.

P9.5

The tax treatment of death benefits is set out in the Finance Act. Benefits paid on the death of a member or beneficiary before the age of 75 are normally tax-free. Where required by the Finance Act ESL will deduct any tax due before the payment of benefits.

P9.6

You should complete the "expression of wish" information to inform ESL of your wishes for who should receive death benefits and the form of those benefits (lump sum or pension) for when ESL is exercising its discretion. ESL takes your wishes into account but it is not bound by them.

P9.7

You can state or amend your wishes at any time. You can state or amend your wishes by notifying us in writing.

 


P10. BENEFITS FOLLOWING BENEFICIARY'S DEATH

P10.1

If a beneficiary dies while taking income through drawdown pension, ESL will use the beneficiary's remaining pension fund in either or both of the following ways as ESL in its absolute discretion determines:

  • to provide pension income in accordance with section P9.3 for any one or more beneficiaries and, if more than one, in such proportions as it decides; and

  • to pay one or more lump sum death benefits in accordance with section P9.4 for any one of more beneficiaries and, if more than one, in such proportions as it decides.

 


P11. DESIGNATED ACCOUNT

P11.1

ESL will open a bank account for your plan ("the designated account"). The bank account selected by ESL is opened as a trust account in the name of the trustee, and is used to pass monies to and from your Account which is set up in accordance with section P3 of these Additional Pension Terms. Once the monies have been received in the Account, they will be transferred for investment purposes to your account with our Sub-Custodian as defined in Appendix D: Custody and Client Money of the Nutmeg Terms and Conditions.

P11.2

For audit purposes all contributions, transfers and benefit payments will be recorded in the "general ledger" for ESL's operating system as having been credited to or debited from your designated account.

P11.3

ESL gives instructions to the trustee in relation to the operation of the designated account and the trustee is the only authorised signatory.

P11.4

The designated account earns interest at a tiered rate depending on the balance of the account. Any cash held in the designated account will be automatically transferred to your Account with us and invested in accordance with section P3 or, if intended for the payment of benefits under sections P7, P9 or P10, transferred to the intended recipient no later than the end of the next business day following the day that the cash becomes held in the designated account. Any interest earned will be paid annually to a registered charity selected by ESL and will not be paid to you. If the interest earned by the designated account is less than the interest paid by the bank to ESL across all the accounts ESL has with them, ESL keeps the difference.

P11.5

ESL does not hold client money. Money which is held in the designated account falls outside the scope of protection provided by the Client Money Rules as set out in the Financial Conduct Authority's Client Assets Sourcebook.

P11.6

The designated account must not go overdrawn.

P11.7

ESL operates central clearing client account(s) through which cash amounts pass before or after being allocated to your designated account, as follows:

  • any amounts to be invested are transferred from the designated account to the central clearing client account up to 5 business days prior to ESL processing your instruction;

  • the amount of any expenses and costs being paid from your plan is transferred from the designated account to the central clearing client account up to 5 business days prior to paying the recipient;

  • the gross amount of any pension income payments is debited from the designated account up to 5 business days prior to the payment date and transferred to the central clearing client account;

  • any tax deducted under PAYE from pension income paid to you from the designated account is credited to the central clearing client account pending payment to HMRC.

P11.8

The central clearing client account(s) are non-interest bearing accounts.

 


P12. INSUFFICIENT FUNDS

P12.1

If there is not enough cleared money to make any payment due under these Additional Pension Terms ESL instructs us on behalf of the trustee to make a disinvestment from the Nutmeg account held within your plan.

P12.2

Neither the trustee nor ESL is responsible for determining which assets should be sold under this section P12 in order to provide sufficient cleared money.

P12.3

ESL will instruct us to commence the disinvestment process 11 business days before payment is due.

P12.4

In some circumstances, it is necessary to sell an asset at whatever price is available at the time. This can result in selling assets when the relevant market is depressed. Selling any investment is governed by the terms and conditions of that investment.

 


P13. RESPONSIBILITY AND LIABILITY

P13.1

ESL and the trustee are not responsible for selecting or monitoring performance of investments, or for assessing suitability of investments for you or providing financial or other advice.

P13.2

You are responsible to us for the fees and charges set out in Appendix E: Fees and Charges Schedule to these Terms and Conditions. Without prejudice to section P13.3, for the duration of the agreement described in section P1.1 (between us and ESL for the operation of the Scheme) neither ESL nor the trustee will charge you any additional fee for the administration of your plan.

P13.3

With the exception of the fees and charges described in section P13.2, you are responsible to ESL and the trustee for all reasonable fees, costs, claims, expenses, tax charges, levies, liabilities, demands and losses that they suffer or incur in respect of any person who is not part of the Embark group of companies and that is beyond their reasonable control:

  • in performing their duties under your plan;

  • in carrying out their lawful duties and responsibilities in relation to you;

  • in acting on requests or instructions made by you (including in connection with the appointment of any investment firm or service provider) if the requests or instructions are in compliance with law and your plan; or

  • if you carry out or arrange an action in respect of your plan that is unlawful or contrary to the Scheme or that results in a liability or cost to you, your plan or the Scheme.

except in all cases as a direct result of ESL's or the trustee’s wilful neglect, wilful default or fraud. This section P13.3 continues in force after your pension fund(s) have been extinguished or the Scheme has been wound up.

P13.4

Neither ESL nor the trustee are responsible for any loss (including loss of profit) in relation to, or reduction in value of any investment:

  • acquired at your request unless such loss or reduction results from fraud, wilful misconduct, negligence or breach of regulatory duty on the part of ESL or the trustee, or the fraud, wilful misconduct, negligence or breach of regulatory duty of any of their employees or agents;

  • not acquired or not disposed of in accordance with ESL's or the trustee's rights under these Additional Pension Terms;

  • disposed of in accordance with these Additional Pension Terms unless such loss or reduction results from fraud, wilful misconduct, negligence or breach of regulatory duty on the part of ESL or the trustee, or the fraud, wilful misconduct, negligence or breach of regulatory duty of any of their employees or agents;

  • which results from any action or omission of any nature whatsoever by any investment firm or by any nominee, banker, custodian or other person providing services to any investment firm or to ESL or the trustee; or

  • which may arise as a consequence of selling an investment under section P6.

P13.5

Other than as a direct result of wilful neglect, wilful default or fraud by ESL or the trustee, neither ESL nor the trustee accept any liability or obligation for any or all losses, costs, actions, proceedings, claims and demands arising directly or indirectly that are incurred by, or brought or made against ESL or the trustee:

  • if ESL or the trustee acted in good faith in accordance with any instruction (relating to benefit options, benefit nominations and investment directions) that reasonably appears to ESL to have been given by you;

  • as a result of having acted in good faith on the instruction of a legally authorised party acting on your behalf;

  • as a result of any default or error by you or by your agents or investment firms or your representatives;

  • as a result of any instruction or investment direction sent by you, or your representatives or agents, or any other third parties who may hold or manage or advise on investments not being received by us;

  • as a result of any investment disposed of or not acquired or not disposed of in accordance with ESL's rights under your plan;

  • for the defaults or errors of or any losses whatsoever caused by any third parties, investment firms, providers of execution only dealing facilities, third parties who may manage investments, nominees, custodians, banks or institutions which hold any assets including cash (or are a counterparty to any investment) including, but not limited to, insurance company unit-linked funds, stocks and shares, unit trusts, open-ended investment companies (OEICs) and investment trust companies; and

  • for the default or error of or any losses whatsoever caused by any professional adviser or manager appointed by some or all of you, ESL and the trustee; and

  • for any failure or delay in implementing any instruction or investment direction or in performing some or all of ESL's or the trustee's obligations in respect of the Scheme or your plan which is caused by circumstances beyond ESL's reasonable control, including but not limited to any one or more of: act of God, earthquake, storm, flood, lightning, fire, explosion or similar natural events; power failure; failure or disruption of a computer system or other equipment, including electronic mail systems and telecommunications; failure or disruption of any relevant stock exchange, including depositories, settlement systems or markets; strike, lockout, other industrial action or other interference with work; nationalisation, expropriation, prohibition, intervention, direction or embargo; imposition by any governmental or quasi-governmental authority of currency restrictions, exchange controls or other charges or restraints affecting your arrangement(s) or the investments and assets allocated to it; inability or delay in obtaining governmental or quasi-governmental approval, consent, permit, licence, authority or allocation; intervention by an exchange or regulator; act of war (declared or undeclared), terrorism, insurrection, revolution, civil disturbance, riot, blockade or other disturbance.

P13.6

If such an event occurs and the failure or delay by ESL or the trustee is material, ESL, to the extent reasonably practicable, will give you prompt notice of that event unless you might reasonably be expected to be aware of the circumstances. ESL then also gives you reasonable particulars of it and, insofar as known, the probable extent to which ESL and/or the trustee are unable to perform, or be delayed in performing, the relevant obligations.

P13.7

Other than as a direct result of wilful neglect or wilful default or fraud by ESL or the trustee, neither ESL nor the trustee accept any liability or obligation for unauthorised payment tax charges, taxable property charges, scheme sanction charges, tax surcharges, income or capital gains tax, or any other tax or levy.

 


P14. TAXATION AND LEVIES

P14.1

ESL deducts from payments made under your plan any tax or levy that ESL or the trustee are required or entitled to deduct in accordance with law or HMRC requirements. Any income payments you receive from your plan are taxed under the pay as you earn system. ESL and the trustee are not liable for any loss that you incur as a result of the use of an incorrect tax code. ESL may also deduct any taxation or levy for which ESL or the trustee might be accountable in accordance with law or HMRC requirements until ESL's or the trustee's liability has settled – any remaining amount of the deduction from the proposed payment is made by ESL on settlement of the liability.

P14.2

ESL deducts from each pension fund any tax (including scheme sanction charge) or levy imposed on ESL or the trustee that relates to the relevant plan. If a tax or levy is imposed on ESL or the trustee in respect of the Scheme as a whole, ESL allocates such proportion of the tax or levy to your plan as it considers reasonable.

 


P15. FINANCIAL SERVICES COMPENSATION SCHEME

P15.1

ESL is covered by the Financial Services Compensation Scheme (FSCS). This is a scheme that provides limited compensation for customers who might otherwise lose out if a company regulated in the UK by the Financial Conduct Authority is unable to pay claims against it. If ESL is unable to meet its obligations to you then you may be eligible to make a claim for compensation under the FSCS. If a provider of an underlying investment or bank account is unable to meet its obligations to ESL, then you or ESL on your behalf may be eligible to make a claim for compensation under the FSCS. The maximum amount that can be claimed will depend on the investment type. FSCS contact details are:

10th Floor
Beaufort House
15 St. Botolph Street
London EC3A 7QU

Tel: 020 7741 4100
www.fscs.org.uk

 


P16. COMPLAINTS

P16.1

If you have any complaints in relation to your plan, please notify us by Nutmail and/or by emailing the Head of Customer Support at: support@nutmeg.com.

P16.2

We will aim to acknowledge your complaint promptly, investigate the matter and report the results to you. If your complaint relates to services provided by ESL we will direct your complaint to ESL.

P16.3

If you are not happy with the response to your complaint, you might have the right to refer it to the Pensions Advisory Service, the Pensions Ombudsman Service or the Financial Ombudsman Service. We tell you about any ombudsman referral rights at the time. Making a complaint, unless made to the Pensions Ombudsman Service, does not hinder your right to take legal proceedings.

The Pensions Advisory Service
11 Belgrave Road
London SW1V 1RB
Tel: 0300 123 1047

Pensions Ombudsman Service
11 Belgrave Road
London SW1V 1RB
Tel: 020 7630 2200

Financial Ombudsman Service
Exchange Tower
London E14 9SR
Tel: 0800 023 4 567

 


P17. DATA PROTECTION AND CONFIDENTIALITY

P17.1

ESL is the data controller of any information it holds about you. ESL complies with all relevant data protection legislation.

P17.2

Your information includes any details which ESL holds about you and includes information received from third parties. ESL uses your information for the purpose of establishing, processing and administering the Scheme and discloses your information to the trustee. You accept that even if the application to join the Scheme does not proceed, your information can be stored for regulatory, statutory or audit purposes.

P17.3

ESL does not disclose your information to anyone other than us and the trustee unless:

  • it is to other members of the Embark group of companies, any of ESL's agents, delegates and advisers and any person anywhere in the world in the proper performance of ESL's obligations in relation to your plan or the Scheme including under the Finance Act as it affects the Scheme; or

  • ESL has your permission; or

  • it is to any person ESL reasonably believes to have been appointed by you as your investment manager or professional adviser; or

  • ESL is required or permitted to do so by law or any competent authority; or

  • ESL is transferring your information to its third party service providers, credit reference agencies and fraud prevention agencies; or

  • ESL has transferred its rights and obligations in relation to your plan.

P17.4

ESL can transfer your information to other countries that provide a different level of data protection from the UK. In such circumstances, ESL will put a contract in place to ensure your information is protected. Your information may be accessed by law enforcement agencies and other authorities in that country to prevent and detect crime.

P17.5

You can request a copy of the information ESL holds about you by writing to us at The Data Protection Officer, Nutmeg, 2nd floor — Vox Studios, 1–45 Durham Street, London SE11 5JH. We reserve the right to charge a small fee in accordance with the guidelines of the Information Commissioner’s Office.

 


P18. VARIATION

P18.1

ESL can change your plan (including these Additional Pension Terms) for any of the following reasons:

  • to respond proportionately to changes in general law or decisions of the Financial Ombudsman Service or the Pensions Ombudsman or the Financial Services Compensation Scheme;

  • to respond proportionately to a court order or decision affecting the Scheme or plan;

  • to meet regulatory requirements;

  • to reflect new industry guidance and codes of practice which raise standards of consumer protection;

  • to reflect a change in ESL's corporate structure that doesn’t have an unfavourable impact on you but which does require ESL to make certain changes to the terms of the Scheme or plan;

  • to respond proportionately to changes in the Bank of England base rate, other specified market rates or indices or tax rates;

  • to proportionately reflect other legitimate cost increases or reductions associated with providing the Scheme and plan;

  • to provide for the introduction of new or improved systems, methods of operation, services or facilities; or

  • to correct any mistake in the Additional Pension Terms, provided the correction does not reduce any rights that you have as a result of the mistake.

P18.2

ESL gives you notice of any change under section P18.1 in advance where practicable, or at the earliest opportunity after the change where advanced notice is not practicable.

P18.3

Further, ESL can change your plan (including the Additional Pension Terms) if ESL has any other valid reason for doing so.

 


P19. TERMINATION

P19.1

Your plan continues until all your pension fund(s) have been extinguished through the payment of a transfer value to another registered pension scheme or the provision of pension or death benefits outside the Scheme. The provisions of sections P13 and P14 continue in full even though all your pension fund(s) have been extinguished.

P19.2

By giving you six months’ notice in advance, ESL can transfer-out your plan for any of the following reasons:

  • if the Scheme becomes too expensive for ESL to operate;

  • if ESL makes an alternative scheme available that provides the similar benefits;

  • if the registration of the Scheme is removed by HMRC; or

  • your behaviour, in ESL's reasonable opinion, is abusive, offensive or threatening (in language or action) or is otherwise inappropriate.

P19.3

For transfers under section P19.2, ESL makes the transfer to any registered pension scheme you notify to ESL before the end of the six month notice period or, if you do not notify ESL of your chosen scheme, to a scheme that ESL chooses and you authorise ESL to execute any documentation on your behalf necessary to achieve the transfer. Further, ESL transfers the investments and cash held in respect of your plan net of any liabilities (less the amount required to satisfy all charges due to us and all costs chargeable to your plan). Investment transactions already initiated by ESL are completed. The trustee is authorised to continue to operate the designated account to ESL's order and direction for the purposes of receiving money, paying benefits and paying any expenses or fees due to ESL, the trustee or other parties.

 


P20. OTHER TERMS

P20.1

ESL can transfer its rights and obligations under your plan to another organisation, and ESL will always notify you in writing if this happens, but this will not affect your rights or ESL's obligations under your plan.

P20.2

You must not assign, mortgage or charge your plan in any way.

P20.3

These Additional Pension Terms are a contract between you and ESL. It gives rights to you, ESL, and to the trustee. No person other than you, ESL and the trustee shall have any rights to enforce any of its terms.

P20.4

Each of the paragraphs of these Additional Pension Terms operates separately. If any court or relevant authority decides that any of them are (i) unlawful, the remaining paragraphs remain in full force and effect; (ii) unfair it, as far as possible, still applies but without any part which could cause it to be held, viewed or considered unfair.

P20.5

If ESL fails to insist that you perform any of the obligations under your plan, or if ESL does not enforce its rights against you, or if ESL delays in doing so, that will not mean that ESL has waived its rights against you and will not mean that you do not have to comply with those obligations. If ESL does waive a default by you, ESL will only do so in writing, and that will not mean that ESL will automatically waive any later default by you.

P20.6

Your plan is governed by English law. You, the trustee and ESL agree to submit to the non-exclusive jurisdiction of the English courts. However, if you are a resident of Northern Ireland you can also bring proceedings in Northern Ireland, and if you are a resident of Scotland, you can also bring proceedings in Scotland.

 


P21. DEFINITIONS

Account means the online account you open with us.

Additional Pension Terms means the terms and conditions set out in this appendix to the Agreement, together with any amendments that relate to it.

Annual allowance means the maximum amount of pension savings under UK tax approved scheme you can accrue each year without incurring a tax charge. If you have accessed your pension savings, you may be subject to a lower annual allowance as a result.

Beneficiary means any of an individual's dependants, nominees or successors.

Capped drawdown pension means a type of drawdown pension under which the amount of "income" you can draw from a pension fund is subject to a maximum limit set by the Finance Act. The maximum amount of income is reviewed regularly.

Dependant has the meaning set out in the Finance Act and means, in relation to you as the member, a person falling within any of the following categories at the date of your death:

  • the member's wife, husband or civil partner;

  • any child of the member who has not reached the age of 23 (any pension to a child will cease on the child’s 23rd birthday unless the child is also dependent or mutually dependent on the member because of physical or mental impairment);

  • any child of the member who has reached the age of 23 and in ESL's opinion is dependent on the member because of physical or mental impairment; or

  • any other individual who in ESL's opinion is financially dependent on the member, or who is in a mutually-dependent financial relationship with the member or is dependent on the member because of physical or mental impairment.

Defined benefits arrangement means an arrangement described in section 152(6) of Finance Act 2004.

Designated account means the bank account that ESL selects to pass money to and from your plan to your custodian account.

Drawdown pension means taking regular amounts as income directly from a pension fund instead of buying an annuity contract from an insurance company. The part of the pension fund allocated for paying drawdown pension remains invested so its value can go up and down.

Finance Act means the Finance Act 2004 as amended from time to time.

Flexi-access drawdown pension means a type of drawdown pension under which you can draw any amount of "income" from a pension fund, subject to income tax.

Embark group of companies means ESL, any of its subsidiaries or any holding company of ESL, or any subsidiary of any holding company. "Subsidiary" and "holding company" have the meanings given to them in Section 1159 of the Companies Act 2006.

HMRC means Her Majesty's Revenue & Customs.

Lifetime allowance means the overall ceiling on the amount of tax privileged pension savings that you can draw.

Lifetime annuity means an annuity contract purchased from an insurance company which provides an income for life.

Member means you, an individual whose application for a plan is accepted by ESL and has been admitted as a member of the Scheme under the Rules and who has not subsequently left the Scheme.

Nominee has the meaning set out in the Finance Act and means someone nominated by a member or ESL to receive death benefits from the Scheme, but who is not a dependant.

Normal minimum pension age means the earliest date that benefits can normally be taken which since 6 April 2010 is age 55.

Plan means the personal pension plan operated for you under the Scheme in accordance with these Additional Pension Terms.

Pension fund means the net value of the investments and money held for you after deduction of any costs, charges and liabilities.

Registered pension scheme means a pension scheme registered under Part 4 of the Finance Act.

Rules means the trust deed and rules that establish the Scheme, as amended from time to time.

Scheme means the Nutmeg Personal Pension, which is a registered pension scheme established by declaration of trust on 8th July 2014.

Successor has the meaning set out in the Finance Act and means an individual who becomes entitled to benefits from the Scheme on the death of a dependant, nominee or successor.

Tax relief limit means the highest amount of 100% of your relevant UK earnings, within the meaning of section 189 of Finance Act 2004; or the basic amount of £3,600.

Trustee means Embark Trustees Limited (company number 08979345) or any successor appointed by ESL.

Unauthorised payment means an unauthorised payment (as defined in Section 160(5) of the Finance Act) which attracts tax charges.

“us” and “our” means Nutmeg Saving and Investment Limited (company number 07503666).

APPENDIX A: BEST EXECUTION POLICY


Under the terms of the Markets in Financial Instruments Directive (“MiFID”), we are required to put in place an order execution policy and to take all reasonable steps to obtain the best possible result on behalf of our clients when executing orders.


A1 QUALITY OF EXECUTION

We are a discretionary investment manager. We aggregate all client orders and trade on a consolidated basis.

When executing these orders we take all reasonable steps to achieve best execution. We have procedures designed to obtain the best possible result for you.


A2 EXECUTION FACTORS

In executing an order under our execution policy, we will take into account the following execution factors, based upon the following priority:

  • Size and nature of the order;

  • Likelihood of execution;

  • Speed of settlement

  • Price;

  • Cost, and

  • Other relevant considerations.


A3 EXECUTION VENUES

We will use our discretion to determine the appropriate execution venue for a trade, which may include, without limitation, an exchange, multilateral trading facility or a broker.

Our main execution venue is the London Stock Exchange, using a Retail Service Provider platform, Bloomberg EMSX, or an Authorised Participant. We may also deal directly with certain execution counterparties.

We will only execute trades on a regulated market or multilateral trading facility.


A4 REVIEW AND MONITORING

We will review the effectiveness of our order execution arrangements (including the venues that we use) and the execution policy on an annual basis (and also on an ad hoc basis in response to any material change affecting a relevant execution venue). We will monitor our compliance with the policy, making enhancements to it or to our order execution arrangements where necessary and advising you of such changes and/or our on-going compliance with the policy, as appropriate.

In exceptional circumstances, such as technical faults leading to loss of connections with an execution venue, we may have to use other execution methods than those listed above.


A5 ELIGIBLE INVESTMENTS

The instruments that we may trade in include the following:

  • ETFs and other exchange traded products;

  • Fixed Interest Securities, e.g. Bonds and Gilts;

  • Collective Investment Schemes, and

  • UK and Non-UK equities, including investment trusts.

The risks of these types of investment are covered in Appendix B.

APPENDIX B: CUSTOMER INVESTMENT RISKS


B1 INVESTING

B1.1

We have set out below a summary of the nature and risks associated with the types of investments we may include in your Account, subject to your Objectives as notified to us. This information is not intended to constitute a comprehensive statement of all the risks to which investors might be exposed and there may be others that exist now or which may arise in the future.

B1.2

The main general risks associated with investing are as follows:

  • Past performance is not an indicator of future performance;

  • The value of investments may go down as well as up;

  • You are not certain to make a profit. You may make a loss. You may lose your entire investment;

  • The price or value of investments may fluctuate significantly;

  • If there are income distributions, they may also fluctuate significantly.

  • Market conditions may limit the ability for the investment manager to trade and/or adversely affect the price of an asset;

  • Investments in non-UK markets are subject to exchange rate fluctuations.


ETFs

B1.3

We primarily invest in Exchange Traded Funds (ETFs), although on occasion we may invest in other Exchange Traded Products (ETPs) such as Exchange Traded Commodities (ETCs). For the purposes of these terms, these are collectively referred to under the term ETFs.

B1.4

We invest in ETFs listed on recognised stock exchanges in the UK (e.g. the London Stock Exchange) and overseas (e.g. the New York Stock Exchange).


B1.5

The main risks associated with investing in ETFs are:

  • The prices of the underlying investments of the ETFs will vary according to the markets on which these are listed or traded;

  • With regard to funds holding non-UK investments, foreign exchange rates may move in an unfavourable direction affecting adversely the valuation of funds in sterling currency terms;

  • Dividend growth is not guaranteed, nor are companies in which you invest obliged to pay dividends;

  • Underlying assets may decline in value;

  • ETFs on overseas markets may involve different risks to the UK;

  • As with all funds, ETFs may be suspended from trading due to the closure of the underlying market or due to the winding down of the fund.


Fixed Interest Securities

B1.6

We may invest in fixed interest securities issued by governments, governmental bodies, quasi governmental bodies in the UK (and overseas), UK local authorities, corporates in the UK (and overseas).

B1.7

The main risks associated with investing in fixed interest securities are:

  • There are few recognised markets in such securities, as the trading is between the issuers, their brokers, and the banks and securities houses making a market in the securities;

  • With regard to securities in currencies other than Sterling, foreign exchange rates may move in an unfavourable direction affecting adversely the valuation of investments in base currency terms;

  • Securities issued by overseas bodies may involve different risks to the UK;

  • Capital may be lost whether or not held to maturity or in the event of default of the issuer;

  • There is a risk of capital erosion in real terms over time due to the effects of inflation, and

  • The value of fixed income securities may fall as well as rise due to market movements.


Collective Investment Schemes

B1.8

We may invest in units/shares issued by collective investment funds both in the UK and overseas, that are authorised by an approved regulator or are unauthorised.

B1.9

The main risks associated with investing in collective investment funds are:

  • There are no recognised markets for collective investment funds as units/shares are issued and redeemed by the managers/operators/administrators of the funds;

  • Funds may be valued for pricing and dealing purposes either daily, weekly, fortnightly, monthly or even less frequently by the managers/operators/administrators;

  • The prices of the underlying investments of the funds will vary according to the markets on which these are listed or traded;

  • Unregulated funds are not subject to the supervision by a regulatory body as authorised funds, and some authorised funds are subject to greater supervision than others depending on their structure;

  • With regard to funds in currencies other than Sterling foreign exchange rates may move in an unfavourable direction affecting adversely the valuation of investments in base currency terms.


UK and Non-UK Equities

B1.10

We may invest in equities, including investment trusts, listed on recognised stock exchanges in the UK (e.g., the London Stock Exchange) and overseas (e.g. the New York Stock Exchange).

B1.11

The main specific risks associated with investing in equities include:

  • Dividend growth is not guaranteed, nor are companies in which you invest obliged to pay dividends;

  • Companies may go bankrupt rendering the original investment valueless;

  • Equity markets may decline in value;

  • Corporate earnings and financial markets may be volatile;

  • If there is no recognised market for equities, then these may be difficult to sell and accurate information about their value may be hard to obtain;

  • Smaller company investments may be difficult to sell if there is little liquidity in the market for such equities and there may be substantial differences between the buying price and the selling price;

  • Equities on overseas markets may involve different risks to the UK;

  • With regard to investments in overseas companies, foreign exchange rates may move in an unfavourable direction affecting adversely the valuation of investments in base currency terms.

 


B2 INVESTMENTS DENOMINATED IN AN ALTERNATE CURRENCY

B2.1

We may effect transactions on your behalf in an investment denominated in a currency other than the agreed base currency of your Portfolio (which is the currency in which your Portfolio is valued).

B2.2

A movement in exchange rates may have a separate effect, unfavourable as well as favourable, on the gain or loss otherwise experienced on the investment concerned. In addition, if you deposit collateral denominated in one currency, you may be subject to margin calls in circumstances where the obligations secured by such collateral are denominated in another currency (in addition to the risk of margin calls for fluctuations in relative values). Some currencies are not freely convertible and restrictions may be placed on the conversion and/or repatriation of your funds including any profits or dividends.

B2.3

The base currency of your Portfolio will be Sterling.

 


B3 DISCRETIONARY INVESTMENT MANAGER RISK

B3.1

Our principal service is discretionary investment management where your individual Pots are managed in accordance with each customer's requirements as set out in your Account. This means that we have discretion over both asset allocation and individual security selection in relation to the assets held in your Portfolio. This means that your Portfolio and its performance will be specific to you, even when compared to a portfolio with a broadly similar mandate.

B3.2

We have a core investment and asset allocation process.

We regularly monitor portfolios to ensure they behave within an acceptable range of returns and reference Nutmeg performance against comparative benchmarks. Customer performance can differ from the average return for a chosen risk level due to size of customer portfolio, movements of cash in or out and customers changing their risk level.

APPENDIX C: CONFLICTS OF INTEREST


C1 INTRODUCTION

C1.1

We are committed to taking measures to recognise, supervise, examine and resolve conflicts of interest. We recognise that it is not possible to eliminate all sources of conflict of interest; however, safeguarding customers' welfare remains our primary objective. This policy encompasses the relationships with customers and third party contacts.



C2 DEFINITION

C2.1

We define a conflict of interest as being either:

  • between us and you as a customer; or

  • between yourself and another customer where your interests are materially affected.


C3 SITUATIONS

C3.1

We have identified areas where a conflict of interest may arise. They include, but are not limited to:

  • services in different capacities at the same time;

  • providing advice or management;

  • acting for more than one customer in a transaction;

  • holding information on other customers that would affect you or them if it was disclosed;

  • receiving gifts or entertainment which could conflict with our duties to you;

  • employees pursuing activities or personal relationships potentially detrimental to you; and

  • personal account holdings in companies or other investments being recommended by us.


C4 PROCEDURES

C4.1

Our protocols are noted below and we consider them satisfactory to allow us to act without bias to prohibit damage to your interests. At all times stringent criteria to address and resolve conflicts is followed. Protocols have been developed and introduced to manage conflicts of interest. Our employees are provided with relevant training about the protocols and standards of conduct expected thereafter. Our management remain responsible for ensuring the protocols and resources are sufficient to identify and attend to a conflict as it may arise.

C4.2

We maintain an internal log of conflicts that arise, listing how each conflict was monitored and any solution which was developed and applied to resolve the problem and to prevent the customer's interests from being disadvantaged. The effectiveness of our protocols is assessed by internal audit staff members who execute their duties in a wholly independent capacity.

C4.3

We have in place protocols to prevent unauthorised access or inappropriate dissemination of information.

C4.4

Where our functions could create an internal conflict our duty lines are kept separate and individual management and reporting structures are established. The operations functions are maintained and conducted separately from the front office functions and in both an appropriate level of qualification, expertise and supervision is applied.



C5 REMUNERATION

C5.1

Staff remuneration is by means of a basic salary which is not linked to the underlying performance of the company. A remuneration committee agrees and monitors awards to achieve consistency and equitability and does not lead to conditions which may foster conflict.

C5.2

Inducements from third parties are acceptable with respect to a service we provide to you if it is disclosed to you and if it is the payment of a normal fee.

C5.3

Personal account dealing rules are enforced for each member of staff.

C5.4

A register of all gifts to staff and valued in excess of £50 is maintained and approved by a senior manager.



C6 RESOLUTION

C6.1

Where we are unable to resolve a conflict of interest we will notify you formally by email. This disclosure will permit you to evaluate whether it is appropriate to continue using our services in respect of the pertinent conflict.

C6.2

Where we have examined the conflict of interest and its cause we may inform you of our decision not to act on your behalf if we determine no other course of action is possible.

APPENDIX D: CUSTODY AND CLIENT MONEY


We are your Custodian and have appointed a Sub-Custodian which will hold your assets.

Your money is held with our Client Money Bank.


D1 SAFEGUARDING YOUR INVESTMENTS

D1.1

Nutmeg is your Custodian and passes your client assets to its Sub-Custodian which has been selected by us in accordance with the FCA Rules in respect of client assets. Your assets will be held by our Sub-Custodian in compliance with the FCA client assets rules. Your assets are held securely in a pooled client account with our Sub-Custodian which is identifiable separately from our own assets and any assets belonging to the Sub-Custodian.

D1.2

When considering which Sub-Custodians to use, Nutmeg will exercise due skill, care and diligence and will periodically review the adequacy and appropriateness of any Sub-Custodian where your assets are deposited and of the arrangements for holding your assets. It is important to note that Nutmeg is not responsible for any acts, omissions or default of a Sub-Custodian chosen by it, but only for taking care in its choice and monitoring.

D1.3

Nutmeg shall keep a record of your entitlement to investments in situations where our Sub-Custodian has registered or recorded your investment in a combined account or pooled in some other way with investments belonging to other clients of ourselves, of our Sub-Custodian. In such a situation you should note the following effects:

  • your individual entitlements may not be identifiable by separate certificates, physical documents or equivalent electronic entries on the register;

  • when we receive investments or money on behalf of more than one client in connection with pooled holdings (for instance in a bonus or rights issue or takeover) we will allocate such investments between clients on a pro rata basis, in accordance with FCA Rules;

  • if a share issue or other corporate event favoured the small investor your actual allocation may be less than it would be if your investments were registered in your own name; and

  • sometimes amounts or investments may arise which would not have arisen if the investments had been registered in your own name. You may not be entitled to any such additional amounts.

D1.4

Our Sub-Custodian will inform us of any rights issues, takeover offers, capital reorganisations, conversion or subscription rights (collectively “corporate actions”) that affect or relate to your investments. We will act on your instructions in relation to such corporate actions, including any standing instructions that you have given to us.

D1.5

Our Sub-Custodian will be responsible for claiming and receiving dividends and other entitlements automatically arising in respect of the investments held for your account. We will reflect these entitlements in your account and hold them in accordance with the FCA Rules in respect of Client Money.

D1.6

Sometimes our Sub-Custodian may receive dividends, interest and other rights or payments after local withholding or similar taxes or other deductions are made from those sums. You accept that our Sub-Custodian may, if it is required to do so to comply with legal or regulatory requirements, withhold or deduct tax or other amounts from any such payments. Any costs our Sub-Custodian incurs when complying with these obligations may be deducted from your account. If you are eligible to reclaim any such withholdings or deductions then this will be your responsibility and not that of our Sub-Custodian, to do so.

D1.7

Nutmeg and our Sub-Custodian will not loan your investments or use them to raise finance.

D1.8

For certain products where we use a third party administrator (e.g. Personal Pension) we will act as Custodian. By accepting these terms of business, you grant authority to Nutmeg to provide information to the third party administrator to take such action in relation to your investments as Nutmeg may be required to under the arrangements that have been agreed with us or the third party administrator.

D1.9

In some cases, transactions will be subject to netting. You agree, in respect of any transaction which is subject to netting, to discharging the settlement obligations on a net basis in accordance with the rules of the relevant central counterparty ("CCP"), central securities depository ("CSD"). You acknowledge that if net settlement takes place then Nutmeg will only be obliged to account to you for any investments or cash in connection with the transaction on a net basis.

D1.10

Transactions executed on your behalf may settle in the books of a CCP, CSD or other body or Sub-Custodian combined with transactions for the account of other clients of ours. If this happens then we will allocate between our clients the cash or investments received by it or on its behalf as a result of the settlements in accordance with the client trades we have notified to it. If we receive cash or investments for trades that were intended to settle at the same time (but which, for whatever reason, do not do so), then we will allocate that cash or investments received by it on the following basis:

  • in accordance with any priority for settlements determined by us prior to the transactions taking place;

  • if transactions have the same priority, then the allocation will be in order of time, by reference to the intended settlement date of the transaction which was specified to us, so that the earliest in time will settle first in each case;

  • where transactions have the same priority and intended settlement date, then the allocation will be by value so that the larger or largest trade by value (not by number of units or size) will be settled first in each case.

  • where these allocations are necessary, they will also be subject to the operation of the relevant CCP, CSD, Sub-Custodian or other entity. Such operations may include a netting rule or practice, automatic splitting of unsettled transactions or other automatic aggregation, splitting or allocation.

D1.11

In order to settle transactions on your behalf, we will need to deal with the other party to the transaction (the “counterparty”) and sometimes transactions will be settled through a CCP or CSD or other depositary transfer agent or similar body. When we deal with these parties, it does so as your agent, in good faith and on the basis that:

  • Nutmeg is not responsible for any default or failure of the CCP, CSD or other counterparty or of any depositary or agent of those entities; and

  • the delivery of any securities or payment to you as a result of the transaction is entirely your risk and not that of Nutmeg.

D1.12

If in future we hold overseas investments, certain overseas markets may require us to register your investments in the name of another Sub-Custodian. We will inform you of any additional terms in advance.

D1.13

You expressly authorise us to grant to the Sub-custodian, in respect of the cash and investments held for your account, the right to retain any cash or investments or sell or realise any investments at any time held by it in order to meet any liabilities and obligations owed to it in connection with its services, and to deduct or set-off any amounts owing to it from any amounts that it is holding or owes to us in connection with its services.


D2 SAFEGUARDING YOUR MONEY

D2.1

Your money is held by our Client Money Bank, in compliance with the FCA Rules in respect of Client Money. This means, amongst other things, that our Client Money Bank will hold your money in a designated client bank account which is an account kept separate from our own funds.

D2.2

When considering which Client Money Bank to use, we will exercise due skill, care and diligence and will periodically review the adequacy and appropriateness of any bank or credit institution where your money is deposited and of the arrangements for holding your money. It is important to note that we are not responsible for any acts, omissions or default of a credit institution or bank chosen by it but only for taking care in its choice and monitoring.

D2.3

When we hold your money in a client account it may be pooled with money belonging to our other clients. Where funds are pooled in this way, you will not have a claim for the specific sum in a specific account. Your claim would be against the client money pool in general and if there is a deficiency in the pool you would share pro rata in that loss.

D2.4

If we hold money which is not immediately required to settle an investment transaction, such money will be deposited with a bank or credit institution, together with other clients’ money. Money may earn interest at a rate determined by the relevant bank or credit institution. However, the amount of any interest on money that would be credited to your account and made available to you will be determined by our Client Money Bank and us, and will be as notified by us to you from time to time. Any interest will be calculated on a daily basis and credited to your account every six months. We may decide not to credit to your account such amount of the interest until it reaches a minimum threshold amount as agreed between us and our Client Money Bank.

D2.5

If any of your money held by our Client Money Bank is unclaimed after a period of six years, Nutmeg may cease to treat that money as Client Money and may include it as part of its own assets. Nutmeg will only do this after it has taken reasonable steps to trace you and return any balance to you. If you then later show a valid claim for the money to Nutmeg, it may then pay you any amount owed to you.

D2.6

Sometimes we will undertake a transaction for you which requires your money or investments to be passed to a Relevant Party in order to meet the obligations under that transaction or as Margin or Collateral. When a Relevant Party is involved then any money or investments passed to the Relevant Party may be at risk in the event of its insolvency. By accepting these terms of business, you acknowledge that this is the case.

APPENDIX E: FEES AND CHARGES SCHEDULE


E1 CATEGORIES

E1.1

Our fees and charges fall into three categories:

  • Annual management fees;

  • Withdrawal charges; and

  • Additional charges.


E2 ANNUAL MANAGEMENT FEES

E2.1

The fee is a percentage of your total assets under management with us. From 1 October 2013 the percentage is determined with reference to the value of your total gross contributions to your Portfolio as set out in the table below. We reserve the right to review the fee where we believe total gross contributions are being manipulated by deposits and subsequent withdrawals, or other unreasonable activity.

Total Gross Contributions to Portfolio

Annual Management Fee

£0-£24,999.99

0.95% (0.79% + VAT)

£25,000-£99,999.99

0.75% (0.63% + VAT)

£100,000-£499,999.99

0.5% (0.42% + VAT)

£500,000+

0.3% (0.25% + VAT)


E2.2

Management fees are subject to VAT.


E3 WITHDRAWAL CHARGES (NOT SUBJECT TO VAT)

E3.1

When withdrawing either a portion or the entirety of cash from your Nutmeg account, a charge may apply based on the method of your withdrawal:

Standard

Express

Trade (if necessary) at next scheduled trading day and transfer cash (typically next day)

Trade (if necessary) next business day* and transfer cash (typically next day)

Free

£10


* For Express withdrawals, we will endeavour to trade as quickly as possible. Generally, that means the next business day after we receive the withdrawal instruction, but it may mean the same business day for withdrawal instructions received before 8 am. For instructions received after markets have closed, we endeavour to trade the next business day, but may have to trade the business day after that (2 business days after we received the instruction).

E3.2

Withdrawal charges are not subject to VAT.


E4 ADDITIONAL CHARGES

E4.1

Panel on Transactions and Mergers (PTM) levy

£1 on all UK share deals over £10,000 gross consideration

Electronic copy letter of certification of discretionary management services

Free

Hardcopy letter of certification of discretionary management services

£10

Additional copies of statements

£10

Subject Access Requests (Data Protection Act)

£10

In Specie transfer

£20 per stock

Hard copies of tax certificates

£25


E4.2

Additional charges are not subject to VAT.


E5 INTEREST

E5.1

We look to obtain the best client money interest rate. We pay all interest received directly to you, i.e. we do not retain any portion.

E5.2

Interest is paid at the Bank of England base rate less 0.35% p.a.