Can Trustnet convince its users to convert virtual assets into real ones as it launches a new direct platform?

12th March 2014


Trustnet, the fund rating firm, has launched another platform service at direct investors called Trustnet Direct. The firm currently runs a well respected fund rating, analysis and investment news service.

The new direct launch emphasises its guides, articles and guidance tools combined with the usual analysis of funds and portfolios but also offers access to  6,000 equities, open-ended funds, ETFs and investment trusts.

Head of Trustnet Direct John Blowers says: “DIY investing can be a daunting task and many investors who have historically sought advice from an IFA in their local bank branch now find themselves on their own in the so-called advice gap. As a trusted provider of information to the investment community for almost two decades, we’ve worked hard to order this information into a format that is readily accessible by any retail investor.”

Platform consultancy the Platforum says the Trustnet is hoping to hit the ground running by converting the million unique users on the Trustnet website, who actively manage £5bn of ‘virtual’ assets into concrete investors.

Holly Mackay, MD of The Platforum says: “The site shows us how much direct platforms have evolved over the last few years from a more basic shopping list of funds and tax wrappers. Trustnet’s fund research and ratings is helpful and will assist those looking for guidance rather than regulated advice.

“We like the way that you can identify with ‘Investors like me’ or look at ready-made portfolios for achieving various types of goals whether they are specific (like paying off the mortgage) or general (like providing regular income).

“The site is a mine of information and can feel overwhelming. Fashion legend Coco Chanel was known for her less-is-more approach and advised clients to look in the mirror before leaving the house and to remove at least one accessory. We love the content and the feel of Trustnet Direct but think that many consumers may require more direction and fewer potential journeys through the site – time will tell.”

Platforum has also provided an analysis of charges for comparison with other websites.

“With a 0.25% service fee (capped at £200) this is reasonably price competitive for most account sizes although there are trading costs for funds as well as shares. Unlike most others their pricing is consistent across different types of investments – someone initially investing in funds won’t get any nasty surprises if they want to buy shares or investment trusts at a later date”, it says.

Platforum Price Comparison Table

The following table compares Trustnet Direct against other platforms for various portfolio sizes (the underlying funds’ annual management charges are included since they differ between platforms). These costs are illustrative only and will depend on the funds held, the number of trades made, levels of cash held and other specific activity-related charges a platform may levy. The three lowest cost for each portfolio are highlighted.

£10,000 £50,000 £150,000 £500,000
AJ Bell Youinvest £121 £654 £1,662 £2,695
Alliance Trust Savings £221 £805 £1,614 £2,422
Barclays Stockbrokers £116 £579 £1,737 £3,178
Bestinvest £121 £579 £1,738 £3,608
Charles Stanley Direct £104 £642 £1,685 £2,928
Fidelity Personal Investing £116 £579 £1,737 N/A
Halifax Share Dealing £143 £632 £1,530 £2,338
Hargreaves Lansdown £121 £605 £1,815 £3,285
Interactive Investor £161 £648 £1,456 £2,265
TD Direct Investing £118 £738 £2,003 £3,240
The Share Centre £218 £902 £1,710 £2,518
Trustnet Direct £146 £773 £1,656 £2,465

The Platforum modelling is based on fund portfolios of £10k, £50k and £150k and a mixed portfolio of £500k. The £10k portfolio is an ISA only; the others are half ISA half SIPP. For the £500k portfolio we have split the holdings 50:50 between funds and shares. The funds used are those that appear most on the buy lists of major UK platforms.

These are Artemis Income, AXA Framlington UK Select Opportunities, First State Asia Pacific Leaders, M&G Optimal Income,  BlackRock Gold and General and M&G Recovery.

Hargreaves Lansdown has used its purchasing power to secure discounted rates on a number of funds – for the funds used in our analysis this discount is 0.048% and is recognised in the table.

What Platforum likes:  Breadth of content including impartial fund assessments and simple portfolio solutions. Detailed reporting on your holdings including a good total portfolio performance tool. The ability to easily convert virtual portfolios.

What Platforum doesn’t like:       Overwhelming for people who are not existing Trustnet users – mainly for the interested investor. This site retains a feel of those who want to make the customer journey easier but are held back by regulatory restrictions in leading customers to solutions.

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