Nutmeg, the U.K.-based online wealth manager is a success story. Nick Hungerford, the CEO of the company, is a brilliant salesman with a powerful vision of banking in the future.

Mister Hungerford, you worked at Barclays in the wealth-management unit. What made you develop a digital competition to the traditional private banking through Nutmeg?

I had the idea for Nutmeg when I made my MBA at Stanford Business School. Some friends asked me whether I would manage their money. And as everyone knows, there's only one sensible answer to this question: no thank you – because every friendship meets a very sudden end that way.

So you decided that a computer had to do this?

Not so quickly. In 2010 there were only two alternatives for my friends: one is «DY-Investing», «destroy yourself investing», meaning: You manage your money yourself via an online platform and you're guaranteed to lose it. The other alternative is the traditional wealth management. For that you need to be wealthy. My initial idea was to build a platform similar to a dating website, matching wealth managers and customers.

And what happened to that idea?

A lot of wealth managers and client advisers I spoke to initially thought the idea was great. They told me it was fantastic, because they were looking for customers with a specific profile and for that purpose my platform was ideal. When it all became a little more serious they all of a sudden said: the opposite is true, our clientele must be as diverse as possible. My interpretation was that customers should simply bring along as much money as possible.

Which is why you gave up your idea of a dating-website?

I learned that most wealth managers have the exact same investment principles they adhere to. So the problem was the following: People don't want to spend much for advice, they don't want to risk «DY» and they don't like the hidden fees of wealth managers.

«We tried to copy for the investment industry how Amazon revolutionized the book market.»

So my solution was: I make the investment principle I know from talking to wealth managers and from my own experience available online. Each customer thus get all the advantages of the available possibilities, he can invest himself for a low and transparent fee and he receives professional advice and service.

That simple?

Yes. We tried to copy for the investment industry how Amazon revolutionized the book market. We aimed to build a platform for people who want to invest money in the best available asset products. A platform that is available around the clock accessible from everywhere and with a first-class customer service.

How did you transform the idea into reality?

We were able to raise some money in California to start with and then moved to London with the help of further investors and the U.K. regulator.

We now have been here for four years, and Nutmeg is the fastest growing wealth manager in the history of Great Britain – these aren't my words, but what the media have written. And today we are one of the 20 biggest wealth managers here, based on the number of clients.

At Nutmeg, you can become a customer starting from 1,000 pounds. Under these conditions you will need a lot of clients still. When do you expect to become profitable?

We are a growth firm and invest continuously in the platform. I expect to reach profitability in two to three years.

Recently, you sold a stake to Schroders, the U.K. asset manager. Why did you take a representative of the «old world» on board?

Several financial institutions were interested in a cooperation with Nutmeg. We held talks with all of them. But only Schroders was prepared to participate financially.

Don't you worry about losing all your know-how to a competitor through the venture with Schroders?

Schroders invested in 2014 and has been a fantastic partner so far. The company has an enormous network in the industry as well as with regulators, which is very useful. I'm convinced that Nutmeg has profited more from this partnership that Schroders so far.

«In Great Britain, regulation is a question of principles and not rules»

Are you planning further investment rounds?

If you have 50 million pounds to spare, no problem... Seriously: that's not on the table at the moment. But as a company with strong growth we will in due course have to look for new money.

You turned your back to the biggest financial market in the world, the U.S. Why's that?

Regulation was one of the reasons, why we chose the U.K. as our location. In Great Britain, regulation is a question of principles and not rules. Which means that we can implement innovations much quicker than in the U.S.

And that's different in the U.S.?

Yes. In the U.S. I constantly met restrictions and constraints. The reason is the conflict between the stock exchange regulator SEC and Finra, the financial market authority. Both want to oversee fintech companies – which doesn't work.

Customer information is a crucial element for the user friendliness of a platform such as Nutmeg. How important are social media data?

I'll explain you how money management with Nutmeg will look like in ten years time: You wake up one morning with a message on your smartphone. A friend of yours has had a son born and wants you as godfather. Nutmeg knew about the birth in advance and opened a savings account as a welcome gift. Now we also get to know that you will be the godfather because of our access to your social-media profile.

«You only have to click 'accept'»

We suggest to you to open a savings fund to help your godson go to university comes the day. We show how a monthly 10 pounds can turn into 10,000 pounds. You only have to click on «accept». Nutmeg is taking care of the payment order and opens the fund.

Will everything really be so unbureaucratic?

Easy, your day has only just started: Now you get into your self-driving car to get to work. Nutmeg tells you that you still have 200 pounds left from your montly budget. Fantastic, you think, because you need new clothes. In the shop, where you would like to spend your 200 pounds, a Nutmeg-avatar jumps out of your smartphone telling you to spend only 100 pounds and to save the rest because that amount will be worth 1,000 pounds once you retire.

Nick Hungerford, 35, is a co-founder and CEO of Nutmeg, the leading European online wealth manager. Some 50,000 customers are using the platform. They pay fees between 0.3 and 1 percent. The Brit started his career at Barclays Wealth. He founded Nutmeg in 2010 in California. Daniel Aegerter, a Swiss citizen, was one of the early investors and remains a member of the board. The company doesn't say how much money it has under management.

The interview is a compilation of questions and answers from a conference of Schroders in London.