Lloyds Bank is trying to attract customers to the DIY investment space with the launch of its Quicklist ETF.
The bank has partnered with BlackRock to put together a list of 16 iShares ETFs for investors.
It follows Monzo’s launch of its DIY service, Monzo Investments, also in partnership with BlackRock, in a sign that banks are looking to build businesses in this area.
Lloyds Bank has launched a limited list of ETFs to make it easier for investors to choose from the thousands on offer.
Lloyds launched a turnkey investment service in July. Its new quick list of ETFs is billed as a “simple, cost-effective way to invest.”
There is a semi-annual administration fee of £20 and, if you don’t have a regular investment plan, a trading fee of £11.
As a result, it is only profitable if you have a larger pot to invest or if you trade larger amounts.
Lloyds’ ready-to-use portfolios through its investment service have a monthly account fee of £3 with annual fund charges of 0.21 per cent to 0.23 per cent, depending on which of the three portfolios is held : Cautious Managed Growth Fund 2, Balanced Managed Growth Fund. 4 or Progressive Managed Growth Fund 6.
With ETF Quicklist, clients can choose whichever ones they want through a share trading account or Isa, accessible from their banking app or online.
The list of ETFs is divided into four categories: Themes, Worldwide, Fixed Income and Current Trends, which includes ETFs ranging from UK property to healthcare.
Manuel Pardavila-González, CEO of Lloyds Bank Investments, said: “Investing should be simple, affordable and accessible to all clients, and our new Quicklist ETF will provide an easy way to start your investing journey.”
What are ETFs?
Exchange-traded funds or ETFs are stocks that are listed on stock exchanges and can therefore be bought and sold throughout the trading day.
Traditionally, they clone a market index and are managed passively, and therefore economically, like a tracking fund, but there are many variations in many sectors so they need to be researched as with any investment.
‘ETFs are a great option for people who want to create and manage their own portfolio. They are easy to understand and offer investors a low-cost, diversified set of holdings.’
Banks have been trying to steer investors away from DIY investment platforms, but this is not a new phenomenon.
Henry Tapper, chief executive of pension comparison service AgeWage, says: “Lloyds Bank is perhaps the first and largest bank to get involved in this, with its purchase of Embark Group in 2022, while Monzo is a high-profile example of digital bank looking to diversify into the retail investor space.
‘Part of the reason for these measures is because banks understand that the income they receive from traditional banking activities is limited and dependent on external factors, for example interest rates.
“So this move makes business sense.”
Justin Modray, head of Candid Financial Advice, agrees that banks are launching these services to boost revenue if loyal customers invest their excess savings, especially if it’s as simple as a few clicks.
But they also look toward the next generation of investors. In the case of challenger banks, they have a group of customers who have a natural affinity for digital services that they can take advantage of.
Initial demand for Monzo Investments was so strong that the waiting list for the service grew to 200,000 in two days.
Lloyds Bank’s ETF list is divided into four categories: Themes, Around the World, Fixed Income and Current Trends.
Mike Barrett, commercial director at financial services consultancy Lang Cat, says: ‘Services like these target a different customer to existing investment platforms, and these are clearly first-time investors.
‘If you are an experienced investor or are already investing elsewhere, I suspect you may find them too limited. Notably, Monzo only has three Blackrock funds to choose from.
“But for those starting out, for whom choosing funds from a list of thousands on one platform is too much, they are a great option.”
Of course, there are many retail platforms where you can buy BlackRock funds, and Modray warns: ‘Banks have traditionally been a poor option for buying investment funds, with often limited options and high costs.
It says: The Lloyds account’s £3 monthly fee is equivalent to 0.36 per cent on £10,000, so could be extremely expensive in smaller investment funds, but progressively become good value in larger funds.’
‘Comparative investment platforms are less expensive. For example, Vanguard, which offers a wide range of low-cost index-tracking findings, has a much lower annual account fee of 0.15 percent.
AJ Bell has a trading fee of £9.95 for ETFs and an annual account fee of 0.25.
BlackRock says it will review the ETF quick list at least every calendar quarter.
Compare the best DIY investment platforms and stocks and shares Isas
Investing online is simple, affordable and you can do it from your computer, tablet or phone at a time and place that suits you.
When it comes to choosing a DIY investment platform, stocks and shares Isa or general investment account, the range of options can seem overwhelming.
Each provider has a slightly different offering, charging more or less to trade or hold shares and giving access to a different range of shares, funds and investment trusts.
When assessing which one is best for you, it is important to consider the service it offers, along with any administration and dealing charges, plus any other additional costs.
To help you compare the best investment accounts, we’ve looked at the facts and put together a complete guide to choosing the best and cheapest investment account for you.
We highlight the main players in the table below, but we recommend that you do your own research and consider the points in our full guide linked here.
>> This is Money’s complete guide to the best investment platforms and Isas
The platforms shown below are independently selected by This is Money’s dedicated journalists. If you open an account using links that have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence.
|Administrative position||Notes of charges||Fund trading||Standard Shares, Trusts and ETF Trading||Regular investment||Dividend reinvestment|
|AJ Bell*||0.25%||Maximum £3.50 per month for shares, trusts and ETFs.||£1.50||€9.95||£1.50||£1.50 per bid||More details|
|Bestinvest*||0.40% (0.2% for ready-made wallets)||The account fee is reduced to 0.2% for investments already made||Free||£4.95||Free for funds||Free for income funds||More details|
|Charles Stanley Live||0.35%||No platform fee on shares if a trade is made in that month and an annual maximum of £240||Free||£11.50||n/a||n/a||More details|
|Fidelity*||0.35% on funds||£7.50 per month up to £25,000 or 0.35% with regular savings plan. Maximum £45 per year for shares, trusts and ETFs||Free||£7.50||Free Funds £1.50 Shares, ETF Trusts||£1.50||More details|
|Hargreaves Lansdown*||0.45%||Capped at £45 for shares, trusts and ETFs||Free||€11.95||£1.50||1% (£1 minimum, £10 maximum)||More details|
|Interactive investor*||£4.99 per month under £50,000, £11.99 over, £10 extra for Sipp||£3.99 per month in free business credit (does not apply to £4.99 plan)||€3.99||€3.99||Free||€0.99||More details|
|iWeb||£100 one-off (no fee until end 2023)||£5||£5||n/a||2%, maximum £5||More details|
|Accounts that have some limits but attractive offers|
|Etoro* No Isa or Sipp||Free||The investment account offers stocks and ETFs. Be careful with high risk CFDs on trading account||Not available||Free||n/a||n/a||More details|
|Free trade*No investment funds||Free for Basic account, £4.99 per month for Standard Account with Isa £9.99 for Plus||Freetrade Plus with more investments and Sipp costs £9.99/month inc. isa rate||Without funds||Free||n/a||n/a||More details|
|Vanguard Only Vanguard products.||0.15%||Vanguard funds only||Free||Free Vanguard ETFs Only||Free||n/a||More details|
|(Source: ThisisMoney.co.uk, September 2023. The administrative percentage charge can be applied monthly or quarterly.|
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