Lloyds Bank partners with BlackRock to launch ETF investment Quicklist

Lloyds Bank is attempting to lure customers to the DIY investment space with the launch of its ETF Quicklist.

The bank has partnered with BlackRock to put together a list of 16 iShares ETFs for investors.

It follows Monzo launching its DIY service, Monzo Investments, also in partnership with BlackRock, in a sign banks are looking to build business in this area. 

Lloyds Bank has launched a limited list of ETFs to make it easier for investors to choose from the many thousands on offer

Lloyds Bank has launched a limited list of ETFs to make it easier for investors to choose from the many thousands on offer

Lloyds launched a ready made investments service in July. Its new ETF Quicklist is billed as a ‘simple and cost-effective way to invest’. 

There is a £20 half yearly admin fee and an £11 dealing fee, if you do not have a regular investment plan. 

As a result, it is only cost effective if you have a larger pot to invest or are dealing in large amounts. 

Lloyds’ ready-made portfolios through its investment service have a £3 monthly account fee with annual fund charges of 0.21 per cent to 0.23 per cent, depending on which of the three portfolios is held – Cautious Managed Growth Fund 2, Balanced Managed Growth Fund 4 or Progressive Managed Growth Fund 6.

With the ETF Quicklist, customers can choose those they want through a share dealing account or an Isa, accessible from their banking app or online.

The ETF list is split into four categories – themes, around the world, fixed income, and trending now, which includes ETFs ranging from UK property to healthcare.

Manuel Pardavila-Gonzalez, managing director of Lloyds Bank Investments, said: ‘Investing should be hassle-free, affordable and accessible to all customers and our new ETF Quicklist will provide an easy way to get started on their investment journey.’

What are ETFs? 

Exchange-traded funds or ETFs are shares listed on stock exchanges and therefore can be bought and sold throughout the trading day.

Traditionally they clone a market index, and are passively and therefore cheaply run like a tracker fund, but there are many variations across many sectors so you need to do your research on them as with any investment.

‘ETFs are a great option for people who want to build and manage their own portfolio. They’re simple to understand and offer investors a low-cost, diversified set of holdings.’

Banks have been trying to claw investors away from DIY investing platforms, but this isn’t a new phenomenon.

Henry Tapper, chief executive of pension comparison service AgeWage, says: ‘Lloyds Bank is perhaps the first and the biggest bank to get involved in this, with their purchase of Embark Group in 2022, while Monzo is a high profile example of a digital bank looking to diversify in the retail investor space.

‘Part of the reason for these moves is due to banks understanding that the income they receive from traditional banking activities is limited and dependent on external factors, for example interest rates.

‘So this move makes good commercial sense.’

Justin Modray, boss of Candid Financial Advice, agrees that banks are launching these services to boost revenue if loyal customers invest surplus savings, especially if it’s as simple as a few clicks.

But they are also looking ahead to the next generation of investors. In the case of the challenger banks, they have a group of customers who have a natural affinity for digital services to tap into.

Initial demand for Monzo Investments was so strong that the waiting list for the service grew to 200,000 in two days.   

Lloyds Bank's ETF list is split into four categories - Themes, Around the world, Fixed income and Trending now

Lloyds Bank’s ETF list is split into four categories – Themes, Around the world, Fixed income and Trending now

Mike Barrett, commercial director of financial services consultant the Lang Cat, says: ‘Services like these are targeting a different customer to the existing investment platforms, with this clearly being first-time investors.

‘If you are an experienced investor or are already investing elsewhere, I suspect you might find them too limited. Monzo most notably only has three BlackRock funds to choose from.

‘But for those starting out, for whom choosing funds from a list of thousands on a platform is too much, they are a great option.’

There are of course many retail platforms where you can buy BlackRock funds, and Modray warns: ‘Banks have traditionally been a poor option when buying investment funds, with choice often limited and costs high.

He says: ‘Lloyds’ £3 monthly account fee with it equates to 0.36 per cent on £10,000, so could prove extremely expensive on smaller investment pots but become progressively good value on larger.’

‘Comparative investment platforms are less pricey. For example, Vanguard, which offers a wide range of low-cost index tracking finds, has a much lower 0.15 per cent annual account charge.’

AJ Bell has a £9.95 dealing charge for ETFs and a 0.25 per cent annual account charge. 

BlackRock says it will review the ETF Quicklist at least each calendar quarter.

Compare the best DIY investing platforms and stocks & shares Isas

Investing online is simple, cheap and can be done from your computer, tablet or phone at a time and place that suits you.

When it comes to choosing a DIY investing platform, stocks & shares Isa or a general investing account, the range of options might seem overwhelming. 

Every provider has a slightly different offering, charging more or less for trading or holding shares and giving access to a different range of stocks, funds and investment trusts. 

When weighing up the right one for you, it’s important to to look at the service that it offers, along with administration charges and dealing fees, plus any other extra costs.

To help you compare the best investment accounts, we’ve crunched the facts and pulled together a comprehensive guide to choosing the best and cheapest investing account for you. 

We highlight the main players in the table below but would advise doing your own research and considering the points in our full guide linked here.

>> This is Money’s full guide to the best investing platforms and Isas 

Platforms featured below are independently selected by This is Money’s specialist journalists. If you open an account using links which have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence. 

DIY INVESTING PLATFORMS AND STOCKS & SHARES ISAS 
Admin charge Charges notes Fund dealing Standard share, trust, ETF dealing Regular investing Dividend reinvestment
AJ Bell*  0.25%  Max £3.50 per month for shares, trusts, ETFs.  £1.50 £9.95 £1.50 £1.50 per deal  More details
Bestinvest* 0.40% (0.2% for ready made portfolios) Account fee cut to 0.2% for ready made investments Free £4.95 Free for funds  Free for income funds More details
Charles Stanley Direct 0.35%  No platform fee on shares if a trade in that month and annual max of £240 Free £11.50 n/a n/a More details
Fidelity* 0.35% on funds £7.50 per month up to £25,000 or 0.35% with regular savings plan. Max £45 per year for shares,  trusts,  ETFs Free £7.50 Free funds £1.50 shares, trusts ETFs £1.50 More details
Hargreaves Lansdown* 0.45% Capped at £45 for shares, trusts, ETFs Free £11.95 £1.50 1% (£1 min, £10 max) More details
Interactive Investor*  £4.99 per month under £50k, £11.99 above, £10 extra for Sipp £3.99 per month back in free trading credit (does not apply to £4.99 plan) £3.99 £3.99 Free £0.99 More details
iWeb £100 one-off (no fee until end of 2023) £5 £5 n/a 2%, max £5 More details
 Accounts that have some limits but attractive offers    
Etoro*  No Isa or Sipp Free Investment account offers stocks and ETFs. Beware high risk CFDs in trading account Not available  Free  n/a  n/a  More details 
Freetrade* No investment funds Free for Basic account,  £4.99 per month for Standard with Isa £9.99 for Plus Freetrade Plus with more investments and Sipp is £9.99/month inc. Isa fee No funds  Free  n/a  n/a  More details 
Vanguard  Only Vanguard’s own products 0.15%  Only Vanguard funds Free  Free only Vanguard ETFs  Free  n/a  More details 
(Source: ThisisMoney.co.uk Sept 2023. Admin % charge may be levied monthly or quarterly

 

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source: dailymail.co.uk