NatWest Invest S&S ISA vs Vanguard etc - fees

jifmoose

As well as a smaller pot (for messing around with manually) in a GIA on Trading2&2, I've kept the bulk of my non-pension investments in a stocks and shares ISA. Have 20K in there at the moment.

I set this up about 5 years ago with fairly little knowledge of what was involved, just going off my bank at the time: NatWest Invest.

Conventional wisdom seems to be that bank investment "platforms" in general, and Natwest in particular are (i) expensive in terms of fees and (ii) not particularly good. So as part of a general review of my position I was going to transfer this out, probably to Vanguard to keep up the theme of passive and simple investment.

I'm quite surprised then when looking at the current fees, there doesn't seem to be that much in it:

• NatWest Invest - "platform" fee 0.15%, fund fee 0.40%. On £20K => £110/year
• Vanguard - £4/month account fee, "average" fund cost 0.26%. On £20K => £100/year

It is certainly true that NatWest's funds are extremely limited (just 5 different risk levels and they have too much US exposure for my current liking). However they've also performed perfectly well, 19% last year* so happy with that.

Is there any argument with sticking with NatWest here? Are the fees these days actually competitive? Worth transferring to Vanguard - or somewhere else? I could transfer to Trading212 which has zero fees AFAIK, but I already have my GIA and Cash ISA there, so like the idea of spreading things about a bit...

(my preferences here are for a set-and-forget, simple index fund. I experiment much more with the £4-5 in my GIA, partly for fun).

* this is with the "ambitious fund", and I did buy the dip so make of that what you will.

Alexland

jifmoose said:

Is there any argument with sticking with NatWest here?

No, 0.55% is way too expensive especially if they only offer multi asset funds when you say you want an index fund. I think there are merits to being multi-asset but there are cheaper ways to do that too.

You could pay roughly half that at Dodl with 0.15% platform fee (min £1 pm) and invest in the HSBC All World fund at 0.13% or a Vanguard LifeStrategy multi asset fund at 0.22%.

Or even cheaper on Scottish Widows Share Dealing (was iWeb) with no ongoing charge, access to thousands of funds including those HSBC and Vanguard funds (and also access to the HSBC Global Strategy multi asset fund series) and free regular scheduled investing.

Or if you really only want an index fund (not a multi asset fund) there are plenty of low cost global ETFs you can buy on T212, InvestEngine, Freetrade, etc.

jifmoose

Ah interesting, thanks. I actually have an iWeb account before it was migrated to Scottish Widows (and have a pension with SW as well), so that could be most straightforward.

GeoffTF

NatWest and Vanguard are both expensive. Here is a cost comparison:

https://monevator.com/compare-uk-cheapest-online-brokers/

Scottish Widows Share Dealing (formally called iWeb) is popular here. You should not need to spread your investments around, particularly if your other accounts are on a similar scale. It is best to use one of the big platforms though.

jifmoose

Thanks yeah, Cash ISA about the same size and GIA a few £K. it should all be covered by FSCS etc so in principle no worries. I have liked using Trading212 - one part of using something else will be to remove the temptation to buy/sell frequently, which T212 makes all too easy!

dunstonh

 it should all be covered by FSCS etc 

..assuming you are using UT/OEICs.  If you are using ETFs, then those do not get FSCS protection.

jifmoose

Huh, interesting. Yes it seems that non-UK domiciled ETFs (which is most of them) are not covered by the FSCS. Good to know...

Albermarle

jifmoose said:

Huh, interesting. Yes it seems that non-UK domiciled ETFs (which is most of them) are not covered by the FSCS. Good to know...

Presume you know that no investments of any type are covered for investment losses.
The FSCS cover for investments, is mainly in case of fraud, maladministration and to cover any administration costs, if the platform/fund goes bust.
All of these are very unlikely is you stick to mainstream investments/platforms.

jifmoose

Oh yes, naturally. It's only in the case of e.g. T212 going completely belly-up, in itself unlikely.

tigerspill

jifmoose said:

Ah interesting, thanks. I actually have an iWeb account before it was migrated to Scottish Widows (and have a pension with SW as well), so that could be most straightforward.

If you don't plan to trade regularly, SW/iWeb bight be a decent choice as there is no monthly charge for GIA and ISAs (not sure about SIPPs), but charge £5 per trade.  I ise them for most of my investments as i don't trade often.

artyboy

jifmoose said:

Oh yes, naturally. It's only in the case of e.g. T212 going completely belly-up, in itself unlikely.

If T212 goes belly up, you'd still own the underlying ETF. It might take a bit of time to sort out, but you wouldn't actually be facing a loss.