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Coutts engineers NatWest robo advisory initiative
21/11/2017 , John Evans, International Editor

NatWest has launched a full robo-advice platform, becoming the first of the major UK banks to break into the automated advice business which has been so far dominated by smaller firms.

The service has been designed and developed by Coutts & Co, a sister bank to NatWest within the RBS group.  The management of investments will also be conducted by Coutts, including all the strategic asset allocation and investment implementation.

However, Coutts itself will continue to adhere to its classic private banking advice face-to-face model.

NatWest Invest launched its digital offering earlier this year, but without an advice capability.  So far, entrants like Nutmeg, MoneyFarm and Blackrock unit Scalable Capital have led the charge into digital investment.

The new service is primarily aimed at the affluent client base. Users can invest from £500 upwards for a £10 charge plus fees.

The 0.95 percent expense ratio for the service comprises an annual platform fee of 0.35 percent and an annual fund-related charge of 0.60 percent.

So far, the underlying performance of the NatWest funds offered on the platform for  12 months to this October are 13.5 percent for the higher risk fund. Medium/higher risk returned 10.6 percent, medium risk 8 percent, lower/medium risk 5.9 percent and lower risk 3.6 percent.

While Coutts is not going down the robo route itself, its involvement with NatWest is considered all part of the private bank acting as “the centre of excellence” for investments for the whole RBS group.

This is a big change in Coutts role, extending its first quartile investment expertise across one, three and five years in the ARC performance indicators to a wider group of customers using the NatWest brand for targeted mass affluent or premier customers. So this helps bring further scale to the rapidly growing assets under management at Coutts and its widening reputation as an investment manager.

Meanwhile, Santander and HSBC are thought to be next among the big banking guns to move into the robo adviser sector.

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