NATWEST Stocks & Shares ISA - good investment?

jimjames · 13 March 2018 at 2:04PM

ileven1225 wrote: »

Thanks a lot for your reply!

Why it’s not good for me? What type of investors those bank ISA is good for?

I wouldn't recommend it to anyone as there are far better options with lower charges and more flexibility. I can't think of anyone they would be good for unless you don't care about performance and cost and want everything with your bank.

ileven1225 · 13 March 2018 at 2:09PM

dunstonh wrote: »

Natwest have set up a robo-advice service. Its a basic option with a handful of bank managed funds that launched in 2016.

They have a £10 initial charge on top of what they call a 0.35% platform charge (despite it not being a platform in the sense of what posters here and IFAs would consider a platform) and fnud charge of 0.6% p.a.

So, its quite expensive for basic, low feature, guided process that is using bank funds. And as many people know, bank funds tend to be at the bottom end.

if not bank fund, what fund you would recommend to invest? Thanks

eskbanker · 13 March 2018 at 2:21PM

aj23 wrote: »

Banks are only there to serve their directors and big shareholders.

I got my AGM from Leeds BS yesterday, and 5 of the directors got £50k pay increases last year, one of them to £420k. They only care about making profit off their customers, whom without they wouldn't exist for anyway.

It's called capitalism - as with all other commercial organisations their primary raison d'etre is profitability and shareholder return, even if some companies successfully manage to dress this up more palatably with decent customer service.

Obviously the government bailouts during the global financial crisis resulted in banks being demonised more than most (and hence the Pavlovian hissing on the likes of Question Time when the trigger term "bankers' bonuses" was deployed) but if they weren't there as pantomime villains for the tabloids then their place would be filled by utility companies, train operators, oil companies, etc, where there is similar resentment of profits being generated....

ileven1225 · 13 March 2018 at 2:25PM

Alexland wrote: »

I would just observe they are on the expensive side of the market when compared to bigger players like Vanguard.

Investing for only 1 year has a circa 25% chance of ending in a loss. Basically you might just randomly hit a period where the market is declining and then crystallise a loss on withdrawal. The best investing is long term investing.

Still if you are happy with the risk (and have nothing better to do with the money) and want to see the 3 funds go up and down then that's fine or you could stick it all in the medium risk fund. High street bank funds tend to be a bit more cautious anyway as they are aware their customers might not have much volatility tollerence which comes from confidence built from understanding the underlying assets.

Alex

I will have a look at Vanguard, thanks.
If bank funds tend to be more cautious, that is what I prefer. I believe the return could be less than other funds but I understand I couldn't get both.

dunstonh · 13 March 2018 at 2:48PM

ileven1225 wrote: »

if not bank fund, what fund you would recommend to invest? Thanks

I'm a regulated individual. I cannot tell you without being in breach of FCA guidelines. The board has historically discouraged recommendations as there are over 30,000 options out there. Nobody can tell you what is best for you on the basis of a few lines of text in a forum.

Bank funds are just bad. Banks always find a way to make their own investments perform badly or damage the investments of the insurance company they are linked to (looking at you Lloyds bank and your destruction of Abbey Life, Scottish Widows and Clerical Medical)

Audaxer · 13 March 2018 at 2:49PM

ileven1225 wrote: »

I will have a look at Vanguard, thanks.
If bank funds tend to be more cautious, that is what I prefer. I believe the return could be less than other funds but I understand I couldn't get both.

Vanguard LifeStrategy funds are low cost globally diversified multi asset funds that come in 5 different risk levels - from a very cautious 20% equities to a high risk 100% equities. Other good options worth considering are HSBC Global Strategy funds and L&G Multi Index funds. A VLS60 (60% equities) for instance is medium risk and is a good option in my opinion. Bear in mind risk here means volatility, not risk of permanent loss. In a bad equity crash a VLS60 may drop 20% to 30% in value, but that would be a very bad time to sell the fund as that would crystallise your losses. More experienced investors would see that as a good time to invest more in the fund if they have spare cash available, because in the long term equities do continue to grow on an upward trend despite equity crashes every now and then.

You can really learn a lot by reading this forum and searching for more info, as well as reading on sites like Monevator. Once you have a good grounding in understanding investments I think you will realise that going through a bank for investments is not the best option to take. You would not be decreasing risk by going via a bank, just increasing costs and lowering returns in choosing the same risk level than you can get by DIY investing in low cost multi asset funds.

cfw1994 · 13 March 2018 at 9:52PM

(minor thread hijack, but relevant I believe!)

If one was considering a LifeStrategy fund....is there a strong reason not to use their own ISA wrapper?

Curious why folk would use HL or similar when Vangard themselves appear to offer the wrapper!
Maybe if you have a bunch of other funds, but if that was the *only* one for the time being.....??

& reading other threads, I think that is the reason.

So maybe my statement might be "if you were early into investing and just planned to have the one LifeStrategy fund for the foreseeable (5+ years), probably no reason NOT to just go with Vangard "direct".

Presumably in the future you could move that to another platform if desired....

dunstonh · 13 March 2018 at 10:03PM

If one was considering a LifeStrategy fund....is there a strong reason not to use their own ISA wrapper?

Its a tied wrapper. e.g. only has Vanguard funds. So, you are stuck with them unless you transfer out later.

Curious why folk would use HL or similar when Vangard themselves appear to offer the wrapper!

Because there is more to life than Vanguard. Others are now undercutting VLS on price and returns at fund level. Vanguard trackers are the best in some sectors but not all sectors.

So, if you want whole of market access, you dont use a platform that ties you to one fund house.

cfw1994 · 14 March 2018 at 2:44PM

dunstonh wrote: »

Its a tied wrapper. e.g. only has Vanguard funds. So, you are stuck with them unless you transfer out later.

Because there is more to life than Vanguard. Others are now undercutting VLS on price and returns at fund level. Vanguard trackers are the best in some sectors but not all sectors.

So, if you want whole of market access, you dont use a platform that ties you to one fund house.

Thanks, understood....it strikes me (from a few different forums) that the Vanguard LifeStrategy funds are a reasonable way to get a broad global bucket at very low cost for a starter 'long term' investor.
In my case I am thinking of suggesting my kids (young adults, not JISA candidates!) perhaps open one & I can help put funds in.

Kind of interested in the approach lauded by Lars at https://www.kroijer.com - would you have any other broad suggestions of which other 'global' fund buckets might be worth checking into?

(I think you might have said earlier you were regulated & therefore cannot give direct 'advice', but any pointers would be appreciated!)

dunstonh · 14 March 2018 at 3:10PM

Thanks, understood....it strikes me (from a few different forums) that the Vanguard LifeStrategy funds are a reasonable way to get a broad global bucket at very low cost for a starter 'long term' investor.

I've got millions in Vanguard funds. We used to use VLS for inexperienced investors with small amounts to keep it within their scope of understanding. So, very similar to those DIYing. However, the minute they are ready to move beyond that and the amount invested is high enough, we move on to a model portfolio and go more advanced. Some people never do and stay multi-asset.

There are a lot of new investors with small amounts and VLS has been a good starting point for them. Until it gets larger and your knowledge improves, it's a good option.

NATWEST Stocks & Shares ISA - good investment?

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