Stocks and Shares v Self Trade ISA - Natwest

Psychological_2

Earlier this year I opened a Stocks and Shares ISA with Natwest, looking for an easy way to get involved with shares. However, all it seems to be doing is deducting the 5% fee they charge for the privilege of paying money in and nothing else.

I would like to take a bit more personal control over it so was looking at moving it to a Self-Select ISA and doing some homework, I could do this with Natwest but advice tends to be that high street banks aren't too good with this sort of thing.

I've seen people recommending Selftrade and am fairly interested in them but wanted to see if anyone had any great ideas? The important thing is keeping the fees minimal and being able to have my own input in what I'm investing in.

It's not a huge amount I'm playing with (£1200 if I close out my current Natwest ISA and £250pm investment) but at the moment I'd be better off sticking it in a normal savings account where at least it would be accumulating some interest rather than losing money in management fees.

Any input would be greatly appreciated!

pressuredrop_2

A 5% fee? Are you investing in one of their managed funds and that's the initial charge of the fund?

Psychological_2

It's a Natwest Balanced Growth Fund - managed by their "experts" - 5% of everything i invest is automatically taken so the current balance is about 5% less than what I have paid in. Plus apparently there is another 1.2% taken automatically from the value of my shares for admin.

Not performing whatsoever so would like to see if I can do any better myself without the fees.

http://www.natwest.com/personal/investments/g1/investments-for-everyone/managed-investments/balanced-growth-fund.ashx

Botany

Surely the 5% fee is an initial charge, which is a one-off. This is pretty common with managed funds (although you would probably haven't paid any of that via a fund supermarket).

My biggest concern in reading your posts is that you complain about the poor performance of your investment, but you say that you only started investing earlier this year. In other words: what did you expect your money to do in just a few months? Double?

This is most unlikely to happen (especially in a balanced fund), as I'm sure you know.

You say you want more control over your investments -but are your expectations realistic?
I think you should ask yourself this because otherwise you may become one of those investors who, impatient for results, keep switching funds around. The problem with this is that you'll end up spending more in 'brokerage fees' than you'll make in the stock market proper.

Just a thought

Thrugelmir

Research investment trust shares. A better and cheaper way of obtaining a wide and diversified portfolio.

The large investments trust groups all offer cheap dealing schemes to buy shares through an ISA.

Linton

Psychological wrote: »

Earlier this year I opened a Stocks and Shares ISA with Natwest, looking for an easy way to get involved with shares. However, all it seems to be doing is deducting the 5% fee they charge for the privilege of paying money in and nothing else.

I would like to take a bit more personal control over it so was looking at moving it to a Self-Select ISA and doing some homework, I could do this with Natwest but advice tends to be that high street banks aren't too good with this sort of thing.

I've seen people recommending Selftrade and am fairly interested in them but wanted to see if anyone had any great ideas? The important thing is keeping the fees minimal and being able to have my own input in what I'm investing in.

It's not a huge amount I'm playing with (£1200 if I close out my current Natwest ISA and £250pm investment) but at the moment I'd be better off sticking it in a normal savings account where at least it would be accumulating some interest rather than losing money in management fees.

Any input would be greatly appreciated!

Less than 6 months is much too early to judge whether an investment is doing well or not.

The FTSE100 index today is actually marginally lower than it was at the start of the year with of course various ups and downs in the meantime. When did you buy?

So it's not too surprising that a balanced fund hasnt changed much. If you look at www.trustnet.com you will find that the NatWest Balanced fund performance is very close to the average for all balanced funds.

If you want more excitement you could move to riskier funds, but of course excitement means that some of the time your funds are worth less than you paid.

As your investment is so low I see little point in it being in an ISA - you are most unlikely to be paying tax anyway.

There are several non-ISA online accounts to hold funds that wont make an admin charge and will discount the initial charge.

Psychological_2

Thanks for coming back to me guys.

Yes, I guess "poor performance" is the wrong word but rather than losing money in their admin fees (which is 5% on every £250 i invest per month - total investment thus far £1250, current balance £1185) I could have put it in a normal regular savings account and at least made a small profit on my money rather than a loss. Certainly not expecting my money to double in half a year

I've just been to Santander with a friend and noticed they offer a similar product without the upfront fees so I guess it's time to switch either way - not neccessarily to Santander but looks as though there are better offers around.

Regarding brokerage fees, I think Selftrade has a £40 annual fee which includes £35 or so in trades, even with this it would be ahead of what Natwest have been charging me.

dunstonh

Yes, I guess "poor performance" is the wrong word

Not really. However, it was for the wrong reason. Bank funds are notorious for being expensive and low quality and generally poor performers. However, in your case it was short timescale in a period that has mostly seen a drop in the markets of around 10-15% followed by a more recent rise but still lower than it was earlier in the year.

I could have put it in a normal regular savings account and at least made a small profit on my money rather than a loss.

That isnt comparing like for like though. Savings accounts give straight line returns. Investments zig zag.

Certainly not expecting my money to double in half a year

Good. Typically its closer to 10 years before you see that.

I've just been to Santander with a friend and noticed they offer a similar product without the upfront fees so I guess it's time to switch either way - not neccessarily to Santander but looks as though there are better offers around.

Santander products are generally worse than Natwest.

Psychological_2

Thanks guys - any particular accounts I should be looking into?

Botany

If you want to avoid the initial charge (5% in your case) every time you buy a new 'chunk' of funds, you may want to consider execution-only brokers who rebate all or at least part of these charges. Many such brokers are discussed in this very forums, everyone has their favourite.

The broker issue is just the beginning though.

The Big Decision is how to invest -what to buy. Plain shares, ETFs, managed funds, investement trusts..........? and what type of companies: large-caps, medium, small...... ? and what type of sector? what type of country or geographical area? .....I could go on..... the combinations are almost endless if you are interested.

The problem is, everyone here will have their 'favourite' (some people will tell you you should invest in gold, others swear by BRIC equity, others would only consider gilt..... etc). Nobody is right and nobody is wrong -it all depends on YOU and what YOU want to achieve and how long YOU plan to keep your investments for and how high YOUR risk profile is.

I'm not saying this to confuse you or discourage you. On the contrary, I encourage you to read and research about investments (it's fun, actually!) and bring yourself to the point where you are happy to manage your investments yourself. I had a bad experience with IFAs a while ago and have been studying all about the subject of investments ever since. It has proved an enjoyable and illuminating experience, and I recommend it wholeheartedly (steep as the learning curve may be).

cardsharps

Psychological wrote: »

Thanks guys - any particular accounts I should be looking into?

iii.co.uk have been great for my self-select shares ISA. No annual management charges and they even gave me £100 for transferring in my existing cash ISA. I wanted to buy individual shares and not funds so this was definitely the best one for me.