Santander Investing: Not much to recommend

• Existing, happy Santander customers wanting to invest solely in funds

It is a lot of work to register for the Santander if you're not already a customer. I wouldn't, therefore, recommend it for non-existing customers as there is nothing in the Investment Hub offering or pricing that is spectacularly unusual and worth the onboarding.

Santander Investing offers its customers access to a:

• General investment account (GIA) is an account designed to provide access to investments. You may be liable for tax on any income or capital gains earned within a general investment account but this can be a useful vehicle for anyone who has maxed out their ISA allowanceShare dealing account
• Sometimes called an investment ISA, a stocks and shares ISA is an individual savings account that allows you to invest in shares, unit trusts, investment funds, and bonds. You will not need to pay tax on any income or capital gains earned on investments within an ISAStocks and shares ISA
• A self-invested personal pension (SIPP) is a type of private pension that allows you to control the specific investments that make up your pension fundself-invested personal pension

A stocks and shares ISA is a ‘tax wrapper' – that means your investment account has a layer of protection from taxes that apply to general investment accounts. There is no income tax or Capital Gains Tax to pay within an ISA, which is why general investing accounts are only usually recommended for those who have maxed out their annual ISA allowance.

One thing to note – Santander ISAs are not ‘flexible' ISAs. That means, if you want to withdraw money from your ISA for emergencies, and then pay it back, it counts as a second deposit and eats away at your annual ISA allowance total. Many of Santander's competitors offer flexible ISAs if having the option to withdraw money without being penalised is important to you. Visit our Best Stocks and Shares ISA page for more details.

For customers with at least £150,000 to invest, there is a Model Portfolio Service available. This enables you to get a portfolio created by a Santander Adviser that matches your personal goals.

If you're not using this advice service, you need to comfortable choosing your own investments, although Santander does offer a kind of advisory halfway house – for £20 you can receive automated advice on which of four Santander Multi-Asset funds would best meet your goals and risk profile.

Assets

At Santander, most customers can only invest in funds. Available funds include:

• 4 x diversified Santander Multi Index funds
• 34 funds managed by Santander Asset Management, part of the Santander Group
• Approx. 850 funds from leading fund managers

With a large range of funds, Santander could suit investors happy to leave decisions on which individual stocks, shares, bonds and other assets to include in their portfolio, to professional fund managers.

There is another potential investment opportunity with Santander – fixed term investments (otherwise known as Structured investment products (SIPs) – also known as fixed-term investments – are created by investment banks to create a product that pays out based on the performance of the chosen underlying assets. SIPs be highly complex. structured investment products). These are only available if you work with a Santander Adviser through the paid financial advice service, however, and can only be included within a general investment account or ISA.

A ready-made portfolio is a pre-made collection of investments that have been put together by investment experts. They are designed to be a simple option for those who don’t want to choose individual stocks or funds for themselves.Ready-made portfolios

Santander offers 4 x Multi-Index ready-made funds which aim to deliver returns by investing in a mix of passive and index tracking funds. As there is far less fund manager involvement in the day to day running of the fund, these are designed for investors who want to minimise the effect that costs have on their potential investment returns, but still save time with a ready-made investment solution matched to their preferred level of risk.

Annual fees

Santander's annual fees hover around the industry average at:

• 0.35% for the first £50,000 invested
• 0.20% on anything between £50,000 and £500,000
• And, 0.10% on amounts over £500k

Although these aren't unusual, it's certainly possible to find lower-priced providers. Vanguard, for example, charges 0.15% on buying funds through its own platform, and AJ Bell Dodl also charges 0.15% (with a £1 per month minimum).

Fixed Term Investments

0.10% annual fees.

Dealing fees

Santander doesn't charge dealing fees which helps keep things simple. Some providers charge a small fee every time you buy or sell a fund and is one of the ‘hidden' fees it's important to keep a look out for normally, so the fact that Santander don't do this, is a plus-point.

Ongoing Charges Figure

In common with all platforms, there are additional fund fees to pay. These go directly to the fund providers and vary depending on the fund you choose. The charge isn’t a fee you physically have to pay because it’s built into the investment and reflected in the returns. Figures for each fund should be made clear in the Key Investor Information Document (KIID) that accompanies fund information.

A ready-made portfolio is a pre-made collection of investments that have been put together by investment experts. They are designed to be a simple option for those who don’t want to choose individual stocks or funds for themselves.Ready-made portfolios

To invest in one of the 4 Multi-Index Santander Asset Management funds, you'll pay the annual fees listed above plus ongoing fund charges which vary depending on the risk-level of the fund you choose. They currently range from 0.34% – 0.49%.

Using the average of these fees, this is how Santander's costs compare – not too well, as you can see:

Model Portfolio Service fees

Based on the value of your investments. If you opt for this service, your Santander adviser will inform you of fees before you sign-up.

Minimum deposits

Santander insists on a relatively high £100 initial deposit per fund if you're starting with a lump sum, although you can make ongoing contributions of just £20 per month if you sign up to regular investing.

Fixed term investments require a minimum of £1,500, and the Model Portfolio Service is only open to customers with at least £150,000 to invest.

How does Santander compare on fees?

Financial advice

Santander offers two types of personalised financial advice.

If you're investing less than £20,000, Santander provides the Digital Investment Adviser – a tool, costing just £20 to use, which helps you explore whether investing is right for you via a set of simple questions to answer. An algorithm then highlights which of four Santander ready-made funds could suit your goals and risk profile.

If you're investing more than £20,000, Santander offers
a more holistic personalised advice service with a qualified Financial Planner who will look at your full financial situation. Meetings can be arranged at your home, in branch, or via video link and have a minimum cost of £500 if you choose to go ahead with the recommendations made. Again, this service will only make recommendations to proceed with Santander funds, rather than the whole of the market.

Not many providers offer this choice of advice with different costs to suit different budgets. In fact, not many providers offer any kind of in-house advice so this is a nice differentiator for Santander. I would caution again, however, that what is offered isn't the same as Independent Financial Advice, and advisors are only able to advise on Santander funds.

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