Bestinvest Review: The Best Thing About Investing Online, Is Not Having To Invest Online

Bestinvest Expert Review

For this Bestinvest review, I’ve interviewed the CEO (in the studio and over a lovely lunch at Cobette on Gresham Street) and put some trades and investments on the app and desktop platform. 

Bestinvest Review

Name: Bestinvest

Description: Bestinvest is one of the most established investment platforms in the UK. Bestinvest was founded in 1986 and is now owned by Evelyn Partners (a financial services firm with £52 billion under management). Bestinvest primary offering is low-cost premade portfolios costing as little as 0.2% a year, fund investing and discount UK share dealing.

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Is Bestinvest good for investing?

Yes, Bestinvest has combined low-cost online investing and share dealing with personalised expert advice to help clients choose the right investments for their portfolio. A good choice for large long-term investors who want a bit of added value from their broker.

Pros

• Expert advice
• Lowest comparable costs
• Ready-made portfolios

Cons

• Basic data on platform
• App a bit clunky
• No hedging products

• Pricing
  (5)
• Market Access
  (4)
• Online Platform
  (3)
• Customer Service
  (4.5)
• Research & Analysis
  (4.5)

Overall

4.2

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Bestinvest Review Ratings Explained

• Pricing: Bestinvest scores top marks for their low-cost ready-made portfolios and cheap dealing fees
• Market Access: There is a huge range of UK and US shares, bonds and funds to invest in, although they are let down by not offering emerging markets
• App & Platform: This could be a lot better and the app was only released last year
• Customer Service: Bestinvest gives excellent personal service, although advice is charged on a flat fee basis
• Research & Analysis: There is a really good coverage of funds with their ‘Spot the Dog’ report.

Another way to phrase this review title would be that one of the worst things about investing online, is having to invest online…

This is because investing is a fairly solitary activity. Gone are the days of weekly investment club meetings down the pub, or regular lunches with your stock broker. Plus, if you search for information on investing online, it’s awash with social media influencers coaching newbies, not for the purposes of providing financial advice (which they are not allowed to do anyway), but for clicks, likes and views.

Modernisation

I wasn’t going to talk about how the internet has revolutionised investing, because that is almost as outdated spiel as how RDR has discouraged investors from getting advice on their investments. But both are true so I sort of have to talk about it in a review that takes online investing offline.

There are very few legitimate online resources that help people invest their money well. It’s absolutely staggering that TikTok users spend on average 95 minutes a day scrolling through the app, almost double what people spend on Facebook and Instagram*. The worry here is that, particularly after the pandemic and meme stock mania, more and more people are turning to social media for investment advice.

Social Media

It’s genuinely terrifying. I didn’t have TikTok before today, but I downloaded it to see and searched for videos on investing. Hyperbole aside, 20 minutes later, I looked up after having been hypnotised by a series of kids selling the dream.

It’s a trend, that has even worried Google, as people look to videos to answer questions rather than websites. Luckily they own YouTube, where users ‘only’ spend 74 minutes a day zoning out and watching ‘how to’ videos.

But there is a solution for investors who want actual advice and don’t have a wealth manager.

Advice & Guidance

What Bestinvest has done is added another layer to their historically, execution-only platform in the form of ‘Coaching’. This hybrid approach means you can invest online, but also have a one-on-one chat with an expert.

For new clients, you can have a free 45-minute session with a qualified financial planner who will talk you through the various investment options on the platform and what may be most appropriate. Once you have an account, this service is unlimited.

When I spoke to Jason Hollands, the head of corporate affairs at Bestinvest before writing this review, he was keen to highlight that coaching is not financial advice, it’s guidance. Before you have a coaching session, you can go through a suitability questionnaire that sets out your investing goals and risk tolerance, but it’s not a full-on ‘know your client’ process, as coaching is about what you could do, rather than what you should do.

If you want actual investment advice, to fine-tune your portfolio, get investment ideas, and help with what to buy and sell, Bestinvest can do that by delving a bit deeper on the phone or by video chat. Which is something that most of the other investment platforms out there don’t offer. 

If you are a new investor, Bestinvest charges £295 for a consultation and will recommend a ready-made portfolio (similar to what robo-advisors offer). Or, if you have an existing portfolio, for £495 one of their investment advisors will analyse your holdings and suggest what to keep, what to get rid of and what to replace it with. They can’t help with tax planning or inheritance issues, but if you need proper wealth management Bestinvest is part of Evelyn Partners which can offer those services (Evelyn currently looks after over £52bn).

Quality Costs

Before you gawk at the prospect of having to pay for something investment-related and bemoan ‘investing is for making money, not spending it’, think about what you are getting in return. In the past, this would have been free yes, but it would have been provided by a half-com hungry adviser stuffing new clients into any new old fund for the purposes of generating commission. But those days are over. 

I’ve seen a pattern emerge over the last few years across all investing, trading and currency providers: They want their customers to do well. Because a profitable customer is a happy customer, and happy customers stick around (and yes, to the cynics, incidentally generate more commission that way).

But this is where Bestinvest says they win business. Not from new investors signing up to start investing, but from established investors with larger portfolios transferring in who need a little bit more from their broker. Which to be fair, are a better type of customer for Bestinvest anyway.

Why? Because they are cheap.

Bestinvest & Low Cost Portfolios

Annual account fees for Smart portfolios start at 0.2%pa up to £500k, then 0.1% to £1m, then nothing over £1m. To put that in comparison, Hargreaves Lansdown charges 0.45% up to £250k, and even upstart digital wealth managers like Nutmeg charge 0.35% for portfolios above £100k (0.75% below that), whilst Moneyfarm charges up to 0.45% above £100k. 

Ongoing charges at Bestinvest are a little higher though (the fee to the investment manager for running the fund) of 0.34%, versus about 0.2% for Smart ready-made portfolios.

Another advantage of Bestinvest over Nutmeg and Moneyfarm is that you can also buy individual UK shares for growth, dividends or if you just fancy a punt on the market. For share dealing, Bestinvest has the lowest commission of the big platforms. It’s £4.95 for dealing online, whereas HL is £11.95, Interactive Investor £7.99 and AJ Bell £9.95.

Ready-made portfolios are the ‘investments de jour‘, and people like them because they are low-cost and diverse. Bestinvest launched a new range of Smart portfolios with Evelyn funds in January 2022 containing ETFs and trackers to keep costs down. You can also invest in more actively managed Expert portfolios, which target better returns, however fees are higher with ongoing fund charges around 1.5%.

They have some quite nifty widgets as well. The Goal Planning tool will analyse your holdings and produce a graph of where your investments may be in the future. This is based on what you actually hold, rather than just an averaged-out market performance calculator, which is what you tend to get elsewhere.

Lagging Tech

However, for active investors, the online dealing platform is nowhere near as good as Interactive Investor or Hargreaves Lansdown. The fund and share research on the platform is limited to a fairly poorly integrated data portal from Digital Look, although the fund factsheets are integrated well. When I tested it I found it quite hard to navigate to the actual ‘Invest’ button kept disappearing. But as I said earlier, this is online investing without investing online. It may actually be a blessing as too much tinkering with your long-term investments can be counter-productive.

Personal Service At Bestinvest

What makes Bestinvest one of the best places to invest is if you want to research stocks and funds and don’t want to trawl through online screeners on Trustnet or get waylaid by pump and dump chat on Reddit you can pick up the phone and talk to someone who knows what they are talking about.