NatWest Invest S&S ISA vs Vanguard etc - fees

jifmoose

Thanks yep I'm liking the look of iWeb. I tried to log in today using the new SW share dealing interface - I haven't logged in in a while, looks like there's been a credential migration snafu so I'll need to wait for the reset by post. No biggie though, not in a great hurry.

Oldhand_2

I wouldn't be in a rush to chase cheaper fees, at the expense of returns. I'd happily pay Natwest's fees, or double, to get 19% last year. My four global trackers, including Vanguard's popular Global All Cap, returned around 13%.

Of course you may have invested when the price was low, and the 19% doesn't represent a full year, but the point remains, returns are more important than fees.

GeoffTF

dunstonh said:

 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.

You get FSCS protection for the insolvency of the investment platform, but you do not get FSCS protection for the insolvency of the ETF provider (or for a foreign domiciled OEIC provider). There have been many instances of investment platforms going bust (albeit platforms that prudent investors would most likely have shied away from). In that case, the investments should be ring fenced, but there is sometimes fraud and there are administrator's fees to pay. Investors' resulting losses have nearly always been covered by the FSCS protection. As far as I have been able to determine, no investor has ever lost money as the result of the failure of a major ETF provider. There are strong protections in place:

"Mythical risk: the ETF running away with your money

A common fear among investors is losing their entire investment if the fund provider or another party goes bankrupt. Fortunately, strong regulatory frameworks have been built over the past centuries to protect individual investors. As a result, although these risks can never be fully ruled out, they are largely theoretical.

Risk of bankruptcy of the ETF provider

As with traditional investment funds, ETFs have to place their underlying investments with a custodian. The fund provider cannot be both the fund manager, and the "guardian" of the assets. So if an ETF provider goes bankrupt, your investments are not gone cause they will still be kept by the custodian. This separation is imposed by the European regulatory framework that governs financial services. In the event of a bankruptcy, another provider will then take over management of the fund.

Risk of bankruptcy of the custodian

Can the custodian go bankrupt though? In the EU, a series of regulations and protective mechanisms aim to prevent them from going bankrupt or, if they do, to ensure that client assets remain protected. In fact, there has never been a case in the EU where a major custodian for ETFs went bankrupt.

A cornerstone of the EU's asset protection framework is the requirement that custodians keep client assets separate from their own. This ensures that, in the event of bankruptcy, client assets (such as the holdings of an ETF) are not accessible to the bank's general creditors and can be returned to the rightful owners. Custodians are also liable in the case of the loss of a financial instrument held in custody. They can only delegate their liability under specific circumstances, ensuring a high level of responsibility for asset protection."

https://curvo.eu/article/etf-risk

(The UK regulations are essentially the same as the EU regulations here.) It is nonetheless prudent to use large ETF providers, e.g. Vanguard and BlackRock.

jimjames

tigerspill said:

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.

Also a regular investment option with iWeb now that doesn't cost. You still pay £5 to sell though

tigerspill

Oldhand_2 said:

I wouldn't be in a rush to chase cheaper fees, at the expense of returns. I'd happily pay Natwest's fees, or double, to get 19% last year. My four global trackers, including Vanguard's popular Global All Cap, returned around 13%.

Of course you may have invested when the price was low, and the 19% doesn't represent a full year, but the point remains, returns are more important than fees.

But if you can invest in the same funds with much cheaper fees, why wouldnt you?

Alexland

Oldhand_2 said:

I wouldn't be in a rush to chase cheaper fees, at the expense of returns. I'd happily pay Natwest's fees, or double, to get 19% last year. My four global trackers, including Vanguard's popular Global All Cap, returned around 13%.

Of course you may have invested when the price was low, and the 19% doesn't represent a full year, but the point remains, returns are more important than fees.

I just looked at the datasheet for the Natwest Adventurous fund (99% equities) and it shows the previous 2 calendar years rounded returns were 11% (2023) and 17% (2024) compared to your Vanguard Global All Cap at 15% (2023) and 18% (2024).

https://www.natwest.com/investments/five-ready-made-funds.html

Natwest don't show the 2025 performance yet but when when I lookup the ISIN from the datasheet then Citywire show the same performance for the past 2 years and only 12% (not 19%) for 2025. So in all 3 years the Natwest fund has had less return. The 19% is likely based on the account contribution dates not the fund.

https://citywire.com/wealth-manager/fund/personal-portfolio-adventurous-fund/c909027

The Natwest fund only did better in 2022 but that's because it didn't exist for most of that year so missed the drop. I haven't compared volatility but there is no indication this Natwest fund is worth paying extra for on performance.

In investing "returns are more important than fees" makes sense but doesn't really work in practice because the returns are usually a result of luck more than skill and one of the best ways to determine attractive future returns is low fees because with investing "you get what you don't pay for".

jifmoose

Yep that's right - for clarity my 19% return has a good component of luck (timing the market!) as I bought in after the significant dip in April

saajan_12

jifmoose said:

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)..

I'd compare with the actual fund you'd choose as this varies massively. I had a much cheaper all world fund with Vanguard in the past, which I doubt has gone up. 

Also Natwest's limited choices will be US focused because some of those US tech companies have ballooned meaning an evenly balanced portfolio 1-2 years ago is now proportionately mostly US companies. 

minimad125

jifmoose said:

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.

Hi there.
I currently have both Vanguard and Natwest for investments and have strangely noticed that when one goes up the other goes down and same other way around. I am tempted to move all to Natwest closer to the time of retirement as it will all be in one place but the offer of a dedicated business manager if I sign up to the premier banking account would allow easy access to customer service and may be a factor if I moved it sooner. what is peoples thoughts on this. 

Albermarle

minimad125 said:

jifmoose said:

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.

Hi there.
I currently have both Vanguard and Natwest for investments and have strangely noticed that when one goes up the other goes down and same other way around. I am tempted to move all to Natwest closer to the time of retirement as it will all be in one place but the offer of a dedicated business manager if I sign up to the premier banking account would allow easy access to customer service and may be a factor if I moved it sooner. what is peoples thoughts on this. 

Investment platforms do not go up or down, it is the investments that you hold on the platform that do .

For example if you held Investment A on the Vanguard platform, and the same Investment A on the Nat West Platform, they would perform exactly the same.

OK in some cases if the range of investments available on a platform are restricted, it not be possible to hold identical investments in each, but it will be the investments you hold on the platform that affect the performance, not the platforms themselves.