So who can you trust to protect your nest- egg?

For years investors have been wary of high street banking giants, so...

INVESTING through your high street bank was once a big no-no. Renowned for their steep charges, poor performance and limited choice, they rarely offered the best option for investors. But as they slash costs and smarten up their offerings, could investing where you do your everyday banking finally make sense? All of the big five high street banks – NatWest, Lloyds Bank, HSBC, Barclays and Santander – operate investment platforms for customers.

The banks are well placed to capture their custom. They have brand power, a high street presence – and customers already trust them with their money.

High street banks also now offer readymade options for investors who have neither the time nor inclination to research investment funds, pick stocks or reposition a portfolio through periods of constant economic change.

This month, NatWest raised the stakes by cutting service fees – from 35p per £100 invested down to 15p, in a bid to entice more customers into its investment fold.

Dylan Williams, head of ‘affluent’ at NatWest, says: ‘ We need to make investing more accessible for everyone – cost must not be a barrier. This is an opportunity for those individuals and families who can, to invest and secure their financial wellbeing for the long-term.’

Ready-made investment funds allow you to choose the level of risk you want to take with your money and the bank then looks after everything else from that point onwards.

You can select from a basic menu of between three and five funds, ranging from low-risk to a bolder strategy for the long term.

Lloyds Bank has three different funds to choose from, Santander four, while Barclays, HSBC and NatWest each have five.

Alternatively, you can reach for a bit more hand-holding with an advice service that helps people decide which fund to tip their money into.

All offer t his except Lloyds Bank, which shares guidance but not advice.

Typically, investors can start with just £50 a month – with Santander it is as low as £20 and with Lloyds Bank it is £100.

NatWest, Barclays, Lloyds Bank and HSBC only allow their own online banking customers to sign up to their no- frills investment plans. But Santander welcomes customers who bank elsewhere.

Customers with a current or savings account with a high street bank will find the path to investing with them easy to navigate. The familiarity may also be appealing if they have never invested before.

And an uncomplicated route to investing is welcome if it translates into more people doing it.

Holly Mackay, of straight-talking investment website BoringMoney, says: ‘ Some traditional financial advisers will not see clients with less than £100,000 of investments and so people need a credible digital alternative.

‘For those people who want help – and feel hesitant – I think digital advice services from banks are worth a look.’

But investors could be forgiven for questioning whether investi ng t hrough t heir bank represents good value for money.

Justin Modray, of independent adviser Candid Financial Advice, says: ‘Banks have historically been poor value for investments, with customers typically suffering from high charges and poor performance. Thankfully that is changing, to an extent.’

Modray points out t hat most banks also offer a platform with a wider range of investments from across the market, allowing more engaged retail investors to pick t heir own f unds or i ndividual company shares. He adds: ‘ Provided your bank does this, then gone are the days when you should avoid investing money with them at all costs.’

However, for people chasing an easy life it will be the ready-made funds that appeal. And some experts argue that these ready- made funds still don’t offer good value.

Damien Fahy, founder of personal finance website Money to the Masses, says: ‘NatWest offers five invest-

ment choices, all of which have underperformed their respective benchmarks since launch.’

For ‘medium risk’ ready- made portfolios, Santander’s fund has also under performed its benchmark.

Established investment platforms offer an alternative to high street banks. They tend to provide more choice and can be lower cost.

Modray says: ‘There are plenty of investment platforms vying for your business, such as AJ Bell, Fidelity and Hargreaves Lansdown.

‘They all fundamentally do the same thing but charges and service, along with bells and whistles, vary. It’s worthwhile comparing your bank to these and finding a platform that best suits your needs.’

These longstanding platforms offer an extensive range of investments and the option for investors to choose funds themselves.

For those who prefer less choice, they also provide suggested portfolios of funds, depending on your appetite for risk.

Modray adds: ‘A wide choice of investments is great, but not if it confuses or leads to you making a poor decision.

‘ Recommended portfolios of funds are a sensible starting point.’

Robo-advisers are another alternative. These are online companies that ask customers a series of questions and find a portfolio suitable for them based on their answers.

Fahy says: ‘Costs are broadly in line with those of NatWest but they offer more fund choice – often including ethical options – and in many cases better investment performance.’

Examples include Nut meg, Wealthify, Wealthsimple and Moneyfarm. Robo-advisers often come with state-of-the-art a pp sf or smartphones or tablets and modern branding.

But Mackay doesn’t write off banks completely. She adds: ‘Banks might not have the same sexy apps that some of the newer roboadvisers do, but they present a credible way for less confident people to put a toe into the world of investing.’

She highlights a useful tool from Santander’s ‘ digital investment adviser’, which guides customers through a series of questions to work out a person’s risk profile, how they might cope with financial loss – and then comes up with a personalised suitability report.

If a customer chooses to buy the £20 report, it will also recommend which one of its four funds to invest in.

Mackay says: ‘ It’s up to you whether you proceed with Santander or another provider. But that report in itself is useful. Most people just want someone to tell them what to do – if that sounds like you, then at least have a look at the tools and take the questionnaire.’

Investing at the bank may be an imperfect start for investors, but sometimes starting is what matters most.

Mackay adds: ‘It’s affordable and will often beat the alternative for long-term savers – which is sitting there doing nothing with your money for another year whilst you worry about what to do.’ la ur a.s hannon@ mailonsunday. co.uk