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fivetide

After gaining a bit of cash thanks to a property sale I have a few quid (£20k) sitting in a current account that pays precisely 0% of sod all in interest. I don't have any loans etc to pay off and I can't see me needing the cash in the medium term at least.

With that in mind, I'm thinking of bunging it in a investment ISA (all 11k) as this seems to have the best potential return. I'm aware there are risks but I also feel that in the next five years, things will be unlikely to get any worse!

I'd probably go through the bank to do it, the upfront fee is 5% and the management fee is 2% annually. No other charges apply and this is a balanced investment fund, basically a fairly low risk one.

Having not done this before - am I mad?

5t.

badger09

fivetide wrote: »

After gaining a bit of cash thanks to a property sale I have a few quid (£20k) sitting in a current account that pays precisely 0% of sod all in interest. I don't have any loans etc to pay off and I can't see me needing the cash in the medium term at least.

With that in mind, I'm thinking of bunging it in a investment ISA (all 11k) as this seems to have the best potential return. I'm aware there are risks but I also feel that in the next five years, things will be unlikely to get any worse!

I'd probably go through the bank to do it, the upfront fee is 5% and the management fee is 2% annually. No other charges apply and this is a balanced investment fund, basically a fairly low risk one.

Having not done this before - am I mad?

5t.

Not qualified to advise on this, except to say your bank is probably the worst possible choice for this sort of investment. Those charges will devastate any return! Hopefully someone better qualified - such as one of the IFAs who post regularly will be along soon

fivetide

badger09 wrote: »

Not qualified to advise on this, except to say your bank is probably the worst possible choice for this sort of investment. Those charges will devastate any return! Hopefully someone better qualified - such as one of the IFAs who post regularly will be along soon

They reckon that if I'd had it for the last five years my initial 11k would now be 17k and that's after charges.

They seem slightly high but only by .5% on the annual charge. The 5% up front is the issue. I was wondering if they ever negociate on that.... ?

5t.

badger09

fivetide wrote: »

They reckon that if I'd had it for the last five years my initial 11k would now be 17k and that's after charges.

They seem slightly high but only by .5% on the annual charge. The 5% up front is the issue. I was wondering if they ever negociate on that.... ?

5t.

I'm sure there are so many better options around, but as I said, I'm not qualified to advise

You didn't say what timescale you are considering. Five years isn't long in investment terms and don't forget your bank will only be able to advise (for that read 'sell') you their own, or tied products. As I said, I'm not qualified to advise on what you should do - happy to suggest what you shouldn't do though

fivetide

anyone?

seeing them at 12.....

5t.

innovate

You have already had the best advice you can possibly get. As badger09 said, your bank is probably the worst possible choice for this sort of investment. Those charges will devastate any return!

Banks are an excellent choice for cash ISAs, but the most terrible choice for S&S ISAsbecause of their charges.

Instead of going like a lamb to the slaughter (i.e. asking your bank for investment advice), you could read up about investing on monevator.com. Or go to an IFA - though they aren't very likely to be interested if your total investment is £20K only.

innovate

fivetide wrote: »

They reckon that if I'd had it for the last five years my initial 11k would now be 17k and that's after charges.

This suggests something like a 10% net return every year. This doesn't sound right for the last 5 years.

What is the exact name of the investment?

fivetide

It's NatWest's balanced investment ISA (I think that's the official name - mix of things in units so some shares, some bonds etc hence not uber high risk but not basic)

Edit to add - as you say an IFA isn't going to be that interested, I don't want to buy share per say, I prefer a bit less risk hence the interest in an ISA.

I also don't have the experience to do it myself, hence the chat with the bank. Not sure it is quite 'lamb to the slaughter' though, I'm aware there will be cheaper ways to do it, I just want to mitigate risks a little.

Futher add: having read monevator - that's all the stuff I want them to do and the principle sounds very much like what the bank have offered/discussed. Avoiding risk creep, spread across the asset classes and also warnings that long term is better than short term (not worried about that aspect) and not to panic as the market moves like it should.

5t.

5t.

innovate

There's a fund called "NatWest Balanced", which seems to have grown 9.9% in total (not year on year) over the last 5 years. So £11K would be just over £12K now. Sounds a lot more realistic than the £17K you mentioned earlier. And it's actually less than you would have got in a five-year cash ISA.

If, for whatever reason, you are intent on buying this fund, you should be able to do so with a fund supermarket, thereby reducing the fees you pay significantly.
EDIT: can't find it in a supermarket, so may be you can only buy it from NatWest directly.

innovate

fivetide wrote: »

Futher add: having read monevator .

You are a fast reader - - - there is TONS of stuff to read on monevator.

However, if you say you want to pay someone to look after your money, then you are probably doing well with a banker. Just don't expect to make much money since they will charge you substantial sums of money.