Hargreaves Lansdown vs Nutmeg: what’s the difference?

Hargreaves Lansdown (HL) and Nutmeg are two of the biggest investment platforms in the UK. 

But what exactly are the differences between them, and which one is better for your investing needs?  

This guide examines the key distinctions between HL and Nutmeg to help you decide which platform to choose. 

What is the difference between Hargreaves Lansdown and Nutmeg? 

Hargreaves Lansdown, founded in 1981, is a leading investment provider offering access to a broad range of investments such as shares, bonds, funds, ETFs, and investment trusts.

It caters both to self-directed investors and those seeking financial advice or ready-made portfolios. The platform emphasises flexibility, allowing investors extensive control over their investment choices. 

Nutmeg, in contrast, established in 2012 and now part of JPMorgan Chase, functions primarily as a robo-advisor.

Nutmeg provides automated, diversified portfolios made up predominantly of exchange-traded funds (ETFs).

It targets investors who prefer simplicity and minimal involvement in their investment decisions, making it ideal for beginners or those who favour passive investing. 

Hargreaves Lansdown vs Nutmeg: how do the fees compare? 

Fees are an essential factor in investment performance.

Here's how both platforms stack up: 

Hargreaves Lansdown fees: 

• General funds and shares account: 0.45% annual management charge fee.

• Stocks and shares ISA: 0.45% management charge for funds of up to £250,000 (this fee falls with the size of your funds with no charge for over £2 million), 0.45% management charge capped at £45 per year for shares, investment trusts, ETFs, gilts and bonds.

• Lifetime ISA: 0.25% management charge for funds (this fee falls with the size of your funds with no charge for over £2 million), 0.25% management charge capped at £45 per year for shares, investment trusts, ETFs, gilts and bonds.

• Self-invested personal pension (SIPP): 0.45% management charge for funds up to £250,000 in value with lower annual charges for higher values held in funds and no charge for over £2 million, 0.45% management charge capped at £200 per year for shares, investment trusts, ETFs, gilts and bonds.

• There are no trading charges for funds.

• £11.95 fee for ETF/share dealing (this decreases if you made more than nine trades in the previous month). There's also an ongoing charge figure (OCF) on each fund.

Nutmeg fees: 

• Fixed allocation portfolios: Fees typically start at 0.45% annually. 

• Fully managed portfolios: Usually range between 0.75% and 1.00%, depending on the investment amount. 

• Socially responsible portfolios: Similar costs to a fully managed portfolio, with the potential to be ever so slightly higher (fully managed cost over a year is around 1.02% vs a fully managed portfolio at 0.98%). 

Overall, Nutmeg generally offers more predictable costs suited to passive investors, whereas Hargreaves Lansdown’s fees can vary significantly based on investment activity. 

Is Hargreaves Lansdown or Nutmeg better? 

Deciding which platform suits you best depends on specific aspects: 

Range of investments 

Hargreaves Lansdown offers over 3,000 funds, shares, investment trusts, and bonds, ideal for those wanting extensive choice and control. 

Nutmeg focuses primarily on ETF-based portfolios, offering limited individual investment selection but simplicity and automation. 

Research and guidance 

Hargreaves Lansdown provides extensive research tools, in-depth market analysis, and financial advice services, making it suitable for investors who actively manage their portfolios. 

Nutmeg has fairly limited research tools, instead offering simple guidance and automated portfolio management tailored to investor risk levels. 

Brand reputation 

Hargreaves Lansdown has a long-standing reputation as a trusted, well-established platform with a significant market presence. 

Nutmeg has a strong reputation as a pioneering robo-advisor, enhanced by its association with JPMorgan Chase, providing confidence, particularly among newer investors. 

Can you open accounts with both Hargreaves Lansdown and Nutmeg? 

Yes, you can open accounts on both platforms.

You could, for example, use Hargreaves Lansdown for an ISA and Nutmeg for a personal pension, or vice versa, allowing you to take advantage of each platform’s strengths. 

Which is better for passive, long-term investing? 

Nutmeg generally suits passive investors better due to its automated, hands-off approach, focusing primarily on low-cost ETFs that track market indices. Its streamlined platform is particularly beneficial for investors with limited experience or who prefer minimal involvement. 

However, Hargreaves Lansdown also supports passive investing through index-tracking funds and ready-made portfolios, making it a viable alternative for those who prefer more control and variety. 

How do their investment philosophies differ? 

Hargreaves Lansdown supports both active and passive investment strategies, emphasising flexibility, choice, and investor autonomy.

It allows investors to actively manage their portfolios or choose from pre-designed solutions. Its philosophy is grounded in enabling informed decision-making through extensive research, financial education, and robust market analysis. 

Nutmeg’s investment philosophy is distinctly passive and algorithm-driven, focusing on broad diversification, automation, and simplicity.

Nutmeg prioritises long-term, strategic investing with minimal intervention from the investor. Its portfolios are regularly rebalanced to maintain target risk levels and adapt to market conditions. 

Get expert financial advice 

Both Hargreaves Lansdown and Nutmeg offer strong platforms suitable for different investor types and goals.

Your choice between them should align with your investment style: active management and variety with Hargreaves Lansdown, or simplicity and automation with Nutmeg. 

Given the complexities involved, consulting with a financial adviser can help tailor investment strategies specifically to your financial circumstances, ensuring your choices align with your long-term goals.

Expert financial advice can help you navigate fees, account options, and investment strategies effectively, maximising your potential returns.