Aviva Wealth Review: So-so fees for so-so investment options

Aviva’s Wealth is best-suited to:

• Wealthier buy-and-hold investors in shares, who can benefit most from the annual fee cap
• Investors in funds with holdings valued at more than £500,000 who can benefit from the removal of fees for values over that amount

Accounts

Aviva offers retail investors access to:

• 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 allowanceGeneral investment 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 (SIPP)
• A Junior ISA through its subsidiary, Wealthify

An investment ISA (Individual Savings Account) is a tax-efficient wrapper in which you can buy, hold and sell investments.

The Aviva stocks and shares ISA is a ‘flexible’ ISA, meaning you can take money from your ISA with no fees or penalties, and you can pay money back in the same tax year without it being deducted twice from your annual ISA allowance.

Discover our best-rated investment ISAs

Junior ISA

Aviva’s robo-advice brand, Wealthify, administers the Junior ISA. Unfortunately, my colleague Antonia, doesn’t rate Wealthify as a particularly stellar brand. “Poor historical performance on their funds, combined with fees at the higher end of the passively managed spectrum, makes for a fairly grim combination.”

SIPP

A self-invested personal pension (SIPP) is ideal for self-employed people and those looking to make additional investments for retirement in addition to their workplace pension. A SIPP allows you flexibility – you get to choose how often you pay in, and how much – and total control as you get to choose what you’re invested in and how much risk you want to be exposed to. It’s also a tax-efficient way to save as, for every 80p you pay in, the government will top it up to £1.

Like the Aviva ISA and general investing account, you’re getting an unspectacular selection of stocks and ETFs (although a strong offering of funds) for above average fees, so it’s hard to recommend this product over SIPPs offered by cheaper rivals such as AJ Bell, interactive investor, and funds specialists Fidelity and Vanguard. It’s cheaper than the personal pensions offered by smart apps PensionBee and Penfold.

Aviva does offer a ‘Find and Combine’ service to help you track down lost pensions, although this is a service many other providers also offer now too.

Assets

Aviva retail clients can access a fairly limited menu of assets that, at present, consists of:

• 830+ UK stocks
• 720+ ETFs
• 155 investment trusts
• 5,100+ funds
• 5 x risk-rated, 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

The big problem with that list is that there are no US stocks. No Apple, Tesla, Amazon, Nvidia and other giants that form the backbone of many DIY investors’ portfolios at the moment. Not having access to the S&P 500 index – an index that has consistently outperformed the FTSE 100 in recent years – will be an issue for many investors.

Ready-made portfolios

Aviva offers retail clients a choice of five ready-made portfolios:

1 x income portfolio which mainly invests in a range of shares and bonds and aims to deliver a regular income through dividends.

4 x growth portfolios which have varying risk ratings across lower, low-medium, and high.

See ‘portfolio performance’ below for analysis of historical performance of these portfolios.

Aviva’s five ready-made portfolios have – on average – underperformed the industry average over the past five years.

Returning just 23.6% on average, that is slightly below the industry average of 28.8% before fees. For those portfolios that have a 10-year record, the figures are even more disconcerting with 10-year yields averaging 39.7% against an industry average of 74.1%.

Of course, it’s important to remember that these are just averages, that some portfolios (Aviva’s adventurous portfolio with a higher risk/reward strategy, for example, have done better. It should also be stressed that past performance does not predict future performance. However, it is disappointing for Aviva customers that ready-made portfolio-holders elsewhere have seen better returns.

To view our full analysis of industry portfolio performance data, see our ready-made portfolio tables.

With Aviva Wealth, you’ll need to pay:

• Annual fees

These vary according to what you’re invested in (funds or shares, for example) and the value of your portfolio (across all Aviva accounts you have open).

For funds

First £50,000 0.40%
Next £200,000 0.35%
Next £250,000 0.25%
£500,000+ 0%

For shares / ETFs / investment trusts

An annual fee of 0.40% capped at £45 per year for a stocks & shares ISA or investment account, and £120 a year for a SIPP.

Dealing fees

There are no dealing fees for funds. If you want to buy and sell shares, however, you’ll be charged £7.50 per transaction.

Ongoing fund management charges

These are levied by the fund managers, taken directly from your investment, are vary according the fund you choose. You should always be able to see how much this ongoing charge is by looking at the fund factsheet which should accompany every fund listing.

The verdict

Annual fees of 0.40% are comparatively high. Although they do reduce in size for values over £50,000, that’s still a high price to pay for the initial holding.

Another word of warning – there is no fee cap for holding funds, so although fees do reduce when the size of your portfolio value exceeds £50,000 your fees will reach £200 per annum if you hold £50,000. Annual fees are waived altogether on values over £500,000, but again, it’s only amounts over that amount that are annual fee-free, so you will still be paying £1,525 per year on holdings of £500,000. That’s very expensive for holding funds as the comparison chart below shows:

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