Scottish Friendly Review: Decent Investments and Easy to Use – but Expensive

What Does Scottish Friendly Offer?

There are 2 types of stocks and shares ISA and junior ISA with Scottish Friendly: a ready-made portfolio and a DIY version. The ready-made ones give you 2 options, a with-profits fund or a climate-focused one (the Schroder ISF Global Climate Leaders fund).

According to fund reviewer Yodelar, Schroders’ performance isn’t great – it found 57.7% of Schroders’ funds have a history of underperformance when it reviewed them at the end of 2024, with 56 of the 97 funds analysed receiving a poor 1 or 2-star rating. So yeah, not great.

Who Are the Scottish Friendly Asset Managers?

Scottish Friendly has recently carried out a review to reduce the number of funds it offers and investment managers it uses for its stocks and shares ISAs. It’s transferring customers to a single investment manager, Schroders Asset Management, during 2025 and 2026.

Scottish Friendly says this will benefit investors in a couple of ways:

1) You’ll be able to select funds which more accurately match your investment strategy and

2) It may reduce the annual management charges you pay

Scottish Friendly Stocks and Shares ISAs

Scottish Friendly offers 2 flavours of stocks and shares ISA: ready-made and DIY.

The ready-made version offers 2 single fund options: My Easy Choice ISA, a with-profits fund and My Climate Leader Choice ISA, a climate-focused fund choice.

Ready-Made: My Easy Choice ISA

With the My Easy Choice ISA your money will be invested in Scottish Friendly’s with-profits fund.

With-profits funds are designed to reduce day-to-day market volatility for investors. So if you don’t like to watch big up-and-down swings happening to your money you might like this. The “balanced” investment has a risk rating of 3 out of 7, making it lower risk – and so lower returning. Don’t expect to shoot the lights out with this one.

For investors who like certainty, you’ll get a minimum cash sum, on your 10-year anniversary of investing, of at least as much as you’ve put in. That’s provided you don’t make any withdrawals or switch money out of the fund. There is also the potential for some growth.

By Scottish Friendly’s calculations, if you invest £10,000 as a lump sum in the Easy Choice ISA, then add £100 a month for 5 years (a total of £16,000), you could expect to get back between:

• £16,400 – assuming low annual growth of 2%
• £18,500 – assuming medium annual growth of 5%
• £20,800 – assuming high annual growth of 8%

This is just an indication, not in any way guaranteed.

However, something that is guaranteed is the total costs of the Scottish Friendly My Easy Choice ISA, which, at 1.28% recurring, are high.

The fees information is also hidden deep into the Key Information Document – not upfront like it really should be for easy comparison (though there is a rough calculator if you scroll down far enough on the ISA page).

Assuming you invest £10,000, Scottish Friendly calculated the cost of the My Easy Choice ISA – what it calls the Reduction in Yield – as 1.29%.

So £129.33 if you cash in after 1 year, £418.17 if you cash in after 3 years, and £750.61 after 5 years (the recommended holidaying period).

You can certainly find cheaper elsewhere.

Ready-Made: My Climate Leader Choice ISA

This invests in the Schroder ISF Global Climate Leaders fund – equities, mainly in the US. The top 5 underlying investments in the fund are:

• Apple Inc (4.5%
• Microsoft Corp (4.2%)
• Alphabet Inc (3.9%)
• Meta Platforms (3.4%)
• Mastercard Inc (3.1%)

Source: Citywire, 17.05.2025

This kind of split is quite usual for sustainable funds. But if you’re looking for a proactively climate-supporting fund this may not be the ISA for you.

Tech stocks had a wobble in late 2024/early 2025 but have done very well over the mid-to-longer term – the fund has given a strong total return of 21.5% over the last 3 years (as at spring 2025). This compares to its sector average which has lost 3.3%. (Citywire data). So clearly it’s doing very well. Big tick there.

You’ll pay 1.5% on the first £5,000, 1% on your investment between £5,001 and £20,000, and 0.5% on any amount over £20,000.

These charges are pretty high for an ISA. Cheaper alternatives are definitely available.

That said, as your fund value grows, your overall percentage charge will decrease, giving you lower fees (as a proportion) the more you invest.

So if you have £5,000 invested in the Scottish Friendly My Climate Leader Choice ISA with fees at 1.5% you’ll be charged £75 a year. If you have £15,000 invested you’ll pay £150 a year (1%) and on £15,000 and on £20,000 you’ll pay £100 a year (0.5%).

Scottish Friendly DIY ISA

You have 13 funds to invest in that range from cautious to moderate and adventurous, with a few other stop gaps in between.You can select one, a mixture of them all, or somewhere in between.

Spoiler – they are, once again, not cheap.

Take the lower risk (cautious) UK Government Bond Fund, managed by Schroders.

Transaction costs are 0.37%. Then, in annual management charges, you’ll also pay 1.5% on the first £5,000, 1% on your investment between £5,001 and £20,000, and 0.5% on any amount over £20,000.

The Reduction in Yield shows what impact the total costs you pay will have on the investment return you might get.

Assuming you invest £10,000, the total cost if you cash in after 1 year is £168.17, or 1.68%. After 3 years it’s £531.43, or 1.66%. And after 5 years, the recommended holding period, the cost is £933.47, or 1.65%.

These are all very high fees for a bog standard UK government bond fund.

The charges are similar for the other 12 funds Scottish Friendly is offering as you go up the risk levels. There’s some fluctuations up and down in transaction costs, but the annual management charges (AMC) remain the same by amount invested.

Even for a UK Equity Tracker Fund, in this case currently managed by BlackRock, which given tracker funds should be among the cheapest available – you’re still looking at the same high AMC (though the transaction cost is lower at 0.22%).

Scottish Friendly Junior Stocks and Shares ISA

Just to make things simple, Scottish Friendly’s Junior Stocks and Shares ISA options are basically the same as the adult ISAs. You get to choose between ready-made and DIY options, with the same fund choices.

I won’t repeat all the same info above here – but needless to say with the same charges applying the Junior ISA is no better value than the adult version.

App and Website: Easy to Use

Scottish Friendly’s website is fairly easy to navigate. Pages are clear and uncluttered – though it’s not that easy to find fund costs and there is also no obvious mention of the £50 exit fee that applies in the first 5 years.

The app is likewise easy to use. It’ll ask new customers upfront if you are investing for yourself or a child, and take you to the right pages.

For example, if you choose the DIY ISA (My Easy Choice), it is a simple tick box exercise to pick which funds you want to invest in – and a summary and key information is provided to help you make your choice (though again costs are not as clearly displayed as with some other investing apps).

You can also set up a transfer in from another ISA via the app.

Customer Service: Friendly But Didn’t Have All the Info

It was very quick and easy to get to talk to a real human when I called the Scottish Friendly customer services telephone line on 0333 323 5433. I only had to press one number, 5, to get put through to someone to talk about ISAs. And the woman I spoke to really wanted to be helpful. But…

The information she gave me was a bit of a mixed bag in terms of accuracy. When I asked how much it was to invest in a stocks and shares ISA she said: “There is no cost to opening it”, which while technically true, doesn’t account for the fact investors will have to pay fees on it.

She did, though, alert me to the fact there is a £50 exit fee if you close the ISA or transfer it within the first 5 years – this is information that was not clear from the ISA page on the website.

When I asked about which fund managers it used she correctly told me the platform was moving to use only Schroders. She directed me to the website to see which funds are available. I was also told, when I asked about costs, that the funds have an AMC of around 1%.

Research and Analysis: Basic Guidance about Investing

The first page of the app has a link to a saving and investing guide with some basic information about time horizons for investing, potential financial goals and an introduction to Scottish Friendly’s ISA products.

The website also has basic guidance about investing, namely guides to ISAs and junior ISAs, and a guide comparing cash and stocks and shares ISAs. Pretty rudimentary but helpful for beginners.