Smile to Open an Online Funds Supermarket
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[London, ENGLAND] The U.K. Internet bank "smile" announced Wednesday it will be offering a new service -- "smile invest" -- to provide an online funds supermarket to its account holders.
The latest service comes as a result of an arrangement between smile and its subsidiary Co-operative Bank Financial Advisers Ltd. By joining forces with funds supermarket Fidelity, the bank says it can pass back to account holders 80 percent of any initial commission earned from the online transaction.
Bob Head, chief executive of smile, noted that the bank already offers a cash ISA (an individual savings account that gets tax breaks from the government), but wanted to increase the investment options available to customers.
Head said that smile invest would offer account holders the opportunity to purchase funds online, and that these funds could be wrapped into either a maxi or mini ISA.
"As people have come to expect from smile, our costs are less because we are an Internet operation and we are committed to passing back any cost savings to our customers," said Head.
Fidelity currently offers 452 funds from 33 providers, giving smile account holders a huge choice of funds.
Information available to investors will include details of each fund's past performance, charges, and the reputation of its managers. Among the other facilities are a consolidated statement of transactions to help investors value their portfolio.
With smile's latest announcement, the Internet's impact on the U.K. banking industry is becoming increasingly apparent. By shaving commission's to a minimum, online banks are almost certain to increase their business at the expense of their offline rivals.