Britain’s biggest banks axed or scaled back investment services following a clean-up of the financial industry that banned cosy backdoor commission deals four years ago.
But now most banks are bringing back or expanding investment options for customers under the simpler, more transparent regime that has operated following the overhaul.
Under the old system, financial advisers sold people investments that were often poor value and took substantial fees from providers for doing so.
Santander: DIY investing and financial advice
What services are available? Santander has scooped up lots of extra customers with its popular 123 account and offers them both a DIY investing platform-style route, along with a financial planning service.
Santander Investment Hub is the DIY investing option and allows people to buy and sell funds with no dealing fee, but they must pay a 0.35 per cent annual admin charge to hold investments. Fund charges also apply.
It offers a full range of funds to choose from, Santander managed funds, and for those looking for a ready-made portfolio, it also has multi-index funds, which blend low-cost funds to deliver a risk-rated investment option. Unfortunately, to evaluate the list of what is available, you need to register for the service first.
You can invest in an Isa but not a Sipp through the investment hub.
Santander’s Financial Planning service charges 2.5 per cent of the sum invested and is designed for those with more than £50,000 to invest, or £25,000 to invest combined with at least the same amount in other existing Santander investments to get up to a £50,000 level.
Advice comes from its financial planning managers, who will assess customers’ needs and make a recommendation. If customers go through with this, they will have the investments arranged for them under Santander Isa Managers, a wholly owned subsidiary.
Products that will be recommended are restricted to Santander’s structured deposits, also known as index-linked savings bonds, its structured investments, also called fixed term investments, and Santander Asset Management’s fund ranges.
What products are on offer? The investment hub offers a full range of funds and multi-index options too, the financial planning service is restricted to Santander products and funds.
What are the charges? The Investment Hub DIY investing service charges 0.35 per cent on holdings annually, but comes with no charge to buy or sell funds.
For the Financial Planning service, an advisory service fee is charged, which is collected as a single one-off payment, but is not charged if you choose not to invest.
Santander says: ‘The amount used to calculate the advisory service fee is the total of the lump sum being invested plus any amount invested on a monthly basis multiplied by 36. The fee will be rounded up or down to the nearest whole pound.’
The fee is set as 2.5 per cent of the amount invested up to £150,000, on larger amounts above this no further fee is charged, meaning the maximum is £3,750. The minimum fee is £250.