The UK private bank has created a new offering that aims to help its clients protect the value of their investments from the threat of inflation.
Coutts has rolled out a new online service that offers its clients “easy and low-cost” access to five personal portfolio funds designed to safeguard investments against the bite of rising inflation.
Coutts Invest, the bank's first online investment offering, allows clients to invest in a fund best suited to their risk profile. They can invest a minimum lump sum of £500 ($621) and make regular contributions.
The launch of the service comes amid growing concern over the threat inflation poses to cash deposits, as inflation is forecast to increase over the next few years.
“With the end of the current tax year fast approaching, clients will be able to use any remaining individual savings account allowance and transfer-in existing ISAs as well as take advantage of the increased ISA allowance of £20,000 for the new tax year by using the Stocks and Shares ISA fund,” Coutts said in a statement.
The funds are managed by Coutts' in-house team, comprising more than 60 investment professionals. The maximum charge for the service is 0.95 per cent of the investment value per annum, and fees decrease as the investment value rises, the bank says.
“£100,000 placed five years ago in a zero interest cash account would be worth £6,500 less today in real terms,” said Mohammad Syed, managing director and head of financial advice and investment solutions at Coutts. “Even if it were deposited in an average high street bank instant access account, it would still be worth £2,600 less in real terms. Rising inflation and all time low interest rates is a troublesome combination which poses a very real threat to the value of our clients’ assets.”