[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.
