Nationwide Building Society has launched a new online investment service in response to customer demand for low-fee funds which are easy to access and choose.
Guy Simmonds, head of product, protection and investment, told FTAdviser that the launch is complementary to Nationwide’s in-store advised financial planning service.
He said: “As customers undertake more transactions online, we foresee a future where customers hop between channels to manage their investments in an optimum way to match their personal needs and circumstances.”
Customers will be able to choose from four risk-graded funds provided by Legal and General Investment Management. They can invest in a stocks and shares Isa up to the new annual allowance of £15,000, or even more in a unit trust, with the minimum investment being £20.
Consisting of three mixed asset funds and a FTSE all-share tracker, the amount of risk and potential reward is increased the proportion invested in shares.
“In looking for a partner to provide the funds behind this, we wanted something that didn’t have any derivatives, stock lending, just investing in the companies in the index,” said Mr Simmonds, adding that Nationwide and Legal and General undertook customer research to simplify the phraseology and user experience online.
Research conducted by the building society showed that a large number of customers wanted to invest online at a time and place that suits them.
Rob Angus, head of protection and investments, said: “Our customers told us they wanted to invest online without advice but were put off by the large number of potential funds available, jargon used and amount of documents they had to read.
“The traffic we’re seeing at the moment, with people researching Nisas, wanting to find out about the changes, they don’t need to sit with a face-to-face adviser, they can do it quickly and easily elsewhere.
“I wouldn’t say there’s an awful lot of competition, I’d say there’s an awful lot of customer need to provide a service in this market. Nationwide have offered financial planning advice since 1996, so we’ve got a large back book of customers, but in the digital age they’re saying they want to have choice.”
