Here we look at Bestinvest – a DIY online investing platform, which offers a range of ISAs, an investment account, and a SIPP (self-invested personal pension).
Founded in 1986, Bestinvest is a stalwart of the investing space. It launched a DIY investing platform in 2011 but has its own team of financial planners should you not fancy that option.
Bestinvest, which is part of the Tilney Group, offers a range of ISAs, an investment account, and a SIPP (self-invested personal pension).
You can invest in one of its seven ready-made portfolios or, for the more experienced investor, choose and manage the underlying funds yourself.
Although BestInvest is fairly logical to use, some aspects of its site do seem a bit messy and difficult to navigate for novice investors. There is no mobile app, so if you’re accessing Bestinvest through your phone you’ll need to use the webpage which can feel frustrating.
However, Bestinvest does remain one of the most helpful sites around for everyday investors who want a few ideas and pointers on which funds or investments to choose.
Is it safe?
Yes. Bestinvest is covered by the Financial Services Compensation Scheme (FSCS). This protects up to £85,000 of investments per person, per platform. Note that you will not be compensated for investments falling in value, or if a company in which you hold shares goes bust. This is unless its poor performance resulted from bad advice given by a regulated Independent Financial Advisor that has also since gone bust.
Sustainable investing option
Bestinvest’s ‘Best Funds’ list includes 11 sustainable/ethical funds and – for those seeking a managed solution it offers a sustainable ready-made portfolio.
It also has some useful guides on sustainable investing and how to choose ethical funds.
Unique selling points
- Spot the dog. Bestinvest publishes a free “Spot the Dog” report to name and shame poorly performing funds, and promote alternatives.
- Investment selector. If you don’t fancy one of the ready-made portfolios, this excellent function allows you to research and compare a range of funds before you invest. You can view ongoing charges, yield, and the Bestinvest star rating for each fund.
- Investment guides and research. Bestinvest has a wealth of research and guides that are available to anyone, not just its customers.
The plus points
- Low minimum investment. Most of Bestinvest’s portfolios and funds have a minimum investment of just £50.
- Top performing funds. Bestinvest ranks the top performing funds over one year. You can use the interactive table to drill down further based on factors that are important to you such as charges.
- Costly for larger portfolios. Bestinvest can work out relatively expensive in comparison to its competitors for those with larger amounts (between £250,000 and £1 million) to invest.
Cost of use
Bestinvest charges a 0.4 per cent service fee on any investments up to £250,000 (0.3 per cent cent for SIPPs). This drops to 0.2 per cent service fee between £250,000 and £1 million, and anything above £1 million is free.
There is a £7.50 fee to trade shares and investment trusts online. Online trading for unit trusts and open-ended investment company funds is free.
How do these costs compare to competitors?
Bestinvest fees are competitive when it comes to smaller portfolios, but could prove costly for those with larger pots.
Hargreaves Lansdown charges an annual fund fee of 0.45 per cent up to £250,000. This goes down to 0.25 per cent on the portion of funds between £250,000 and £1 million, and 0.1 per cent on anything between £1 million and £2 million. Anything above that is free.
AJ Bell charges an annual platform fee of 0.25 per cent up to £250,000, 0.10 per cent for £250,000 to £1 million and anything over £2 million is free.
Interactive Investor charges a fixed fee of £9.99, £13.99 or £19.99 per month depending on the plan you choose. These fees include an unlimited amount of trades. This could make it cheaper for investors with larger portfolios, compared to HL.