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  • FIRST POST
    • Mr Moolah
    • By Mr Moolah 9th Jul 17, 10:02 PM
    • 2Posts
    • 0Thanks
    Mr Moolah
    Investmenting with Nationwide (and with investment advice)
    • #1
    • 9th Jul 17, 10:02 PM
    Investmenting with Nationwide (and with investment advice) 9th Jul 17 at 10:02 PM
    I wondered if people had any opinions and advice on Nationwide in regards to their Financial Planning Service and investments.

    Essentially we've had money (over £50,000) in various different bonds with Nationwide over the years, but now the interest is very poor. Nationwide have been pushing for us to start investing through them instead, as they say that the income is better from investments than it is from standard savings products. We've had a meeting that essentially goes through 5 different funds (with varying levels of risk), this I assume is part of their financial planning service. We also had to answer a multiple choice questionnaire to get attitude towards risk.

    I am sold on the idea of investing but a major sticking point with the whole process is that there is a 3.5% advice fee on whatever is invested. So from £50,000 Nationwide receive £1,750 for the process, I think this is excessive (especially for what little Nationwide have done). Obviously Nationwide are giving all the sales talk and seem perplexed that we would question this 3.5% charge. There is another annual 0.5% Nationwide service charge as well as roughly 0.75% annual fund charges. It seems like I'm paying a lot out in fees and charges.

    I'm a complete novice at all of this investment business, but it seems like I'm being taken for a ride here. What's people's advice on this? These advice charges seem like a new PPI scandal in the making.
Page 1
    • Audaxer
    • By Audaxer 9th Jul 17, 10:33 PM
    • 589 Posts
    • 258 Thanks
    Audaxer
    • #2
    • 9th Jul 17, 10:33 PM
    • #2
    • 9th Jul 17, 10:33 PM
    Yes, it is a very high initial charge at 3.5% and I am fairly sure the advice is restricted to their products, i.e. not from an Independent Financial Adviser (IFA). I would either contact an IFA or consider DIY investing in an S&S ISA. If you have a read on this forum and sites like Monevator you will get some ideas and may want to do further research. A good way to start is through low cost passive investing in a multi asset fund as high fees like you have been quoted will eat into your investment returns.
    • oldfella
    • By oldfella 9th Jul 17, 10:48 PM
    • 1,500 Posts
    • 573 Thanks
    oldfella
    • #3
    • 9th Jul 17, 10:48 PM
    • #3
    • 9th Jul 17, 10:48 PM
    rule 1, do not buy an investment product from a bank

    rule 2, see rule 1
    • Eco Miser
    • By Eco Miser 9th Jul 17, 10:57 PM
    • 3,181 Posts
    • 2,944 Thanks
    Eco Miser
    • #4
    • 9th Jul 17, 10:57 PM
    • #4
    • 9th Jul 17, 10:57 PM
    rule 1, do not buy an investment product from a bank
    Originally posted by oldfella
    Or from a Building Society.

    Actually, some banks have good investment products, but you won't find them on the High Street.
    Eco Miser
    Saving money for well over half a century
    • droopsnoot
    • By droopsnoot 10th Jul 17, 12:32 PM
    • 1,090 Posts
    • 692 Thanks
    droopsnoot
    • #5
    • 10th Jul 17, 12:32 PM
    • #5
    • 10th Jul 17, 12:32 PM
    I have various investments, both inside and outside an ISA, with Nationwide. They've been there for some time, performing reasonably well now (in themselves, I'm not sure how they compare to other things), and were done in response to them suggesting I could get better returns with investments that I could with the various savings accounts and bonds that I had at the time. I suspect this dates back to a time where it wasn't as taboo to get advice from a bank, around 2000 if I recall correctly. I do recall they were very keen to point out the risks of losing value, though I don't think even they expected it to happen quite the way it did only months after I invested with them.

    Anyway, all that aside, the biggest problem I have with them is that the range of investment funds available is very limited. Many times, when I've been trying to get my head around doing something different with my funds, I've read about something on here or elsewhere, signed into the Nationwide IPS platform, only to find they don't list it. So, in addition to anything else, have a look at what options they offer and compare them to other platforms before you take the plunge.

    Nationwide IPS (their online platform, Investor Portfolio Service) was transferred to Aegon earlier in the year, so I should also clarify that's what I am talking about, I don't know whether Nationwide have started up another investment service after that happened or whether they're still using the same one.
    Last edited by droopsnoot; 10-07-2017 at 12:34 PM.
    • Mr Moolah
    • By Mr Moolah 10th Jul 17, 1:24 PM
    • 2 Posts
    • 0 Thanks
    Mr Moolah
    • #6
    • 10th Jul 17, 1:24 PM
    • #6
    • 10th Jul 17, 1:24 PM
    Or from a Building Society.

    Actually, some banks have good investment products, but you won't find them on the High Street.
    Originally posted by Eco Miser
    Is that advice on the basis that fees are a rip-off or that the products are poor? Obviously banks/building societies will have a limit on available products (and be a bit biased). It may have been the sales talk, but the returns seemed solid and I would imagine that they'd have some responsibility to provide some decent funds.

    I know I'm putting a bit of faith in these organisations, but I'm assuming that their "con" is the advice fee. I'm happy to be proved wrong though (as I'm a complete novice with this).

    Independent financial advisors are just that, but I'm assuming their money comes from upfront fees?
    • Malthusian
    • By Malthusian 10th Jul 17, 2:17 PM
    • 3,319 Posts
    • 5,060 Thanks
    Malthusian
    • #7
    • 10th Jul 17, 2:17 PM
    • #7
    • 10th Jul 17, 2:17 PM
    Is that advice on the basis that fees are a rip-off or that the products are poor?
    Originally posted by Mr Moolah
    Both.

    Obviously banks/building societies will have a limit on available products (and be a bit biased). It may have been the sales talk, but the returns seemed solid and I would imagine that they'd have some responsibility to provide some decent funds.
    They may be "decent" but why pay top dollar for merely "decent" investments? For the amount you are paying you could hire an IFA who would be obliged to recommend you the best solution, not merely a decent one.

    Independent financial advisors are just that, but I'm assuming their money comes from upfront fees?
    You mean like Nationwide's 3.5% fee?

    IFAs are paid via initial and ongoing fees, generally around the same level or less than Nationwide's 3.5% initial plus 0.5% per annum. You are proposing to pay Michelin-level prices for a McDonalds quality product.
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