Investments are the next step for customers who have built up a bit of a reserve and have their emergency savings safely tucked away. There are a variety of ways to invest and customers should do careful research to ensure they meet their financial goals. HSBC Investments offer a vast range of options, and this review takes a closer look. How do these investment options compare on a global playing field?
HSBC was founded just before the 19th century when America was at war with itself. The Civil War took place as the Northern and Southern U.S. citizens were at odds where the slave trade was concerned. Europe did not wish to be a part of this and decided to foster stronger ties with Asia. Thus the formation of HSBC, or Hong Kong and Shanghai Banking Corporation Limited.
The relationship ensured a continuous flow of business, and during the World Wars, the bank was at the forefront to assist in the maintenance and upkeep of the infrastructure in Asia. This enabled them to increase their trade and once again achieve a semblance of financial stability.
Currently, the bank has locations across the world with many subsidiaries that service millions of customers. The bank made a bold move by ensuring that all the subsidiaries carried the simple yet iconic branding of HSBC, to allow customers to relate to it easier. As a group, HSBC is considered a mega financial institution.
We recently did a full review on HSBC. Read here to learn more.
Things To Consider when Opening an Investment Account
HSBC allows customers the option to invest on their own, or with the help of a financial adviser. Some of the tips on their website include:
- Customers need to ensure that they regard their investments as a time commitment. Not only will the investment need time to recoup the fees, it will also have to ride out the peaks and valleys that occur during the various market conditions.
- Investments, even ones in low-risk portfolios, carry a certain degree of risk. Some of the investments may carry a guarantee on the capital, however, past performance on a fund is no indication of future success. There is always the underlying risk that customers may not get back what they initially invested.
- Finally, those who invest in a product merely to benefit from tax incentives, may not enjoy these benefits forever. There is no guarantee that a product will have the same benefits today as it will in 20 years, as tax rules change all the time.
HSBC Investments Product Offerings
Stocks and Shares ISA Options
This option allows customers to choose a ready-made portfolio. Furthermore, the portfolio is managed by HSBC.
- The portfolio is determined by the amount of risk a client wants to take.
- The minimum investment is a lump sum of £1,000 or monthly installments of £50.
- Finally, the account charges are 0.25% plus fund charges.
Global Investment Centre
This option allows customers to build and manage their own portfolio of funds, including index trackers from HSBC. Also, there are funds from other leading asset managers as well.
- The investments start from lump sums as little as £100.
- Furthermore, there is a 0.39% charge plus fund charges.
InvestDirect/ InvestDirect Plus
This option allows customers to build and manage their own portfolio of securities. Furthermore, these include UK and US shares, Government bonds and exchange traded funds.
- There is no minimum on the account.
- Also, there is a £10.50 charge per standard online share trade.
- Finally, there is also a £10.50 quarterly account fee.
This option is suitable for those who wish to benefit from a variety of assets. The fund is a collection of deposits from many individuals, and a fund manager pools it all together to invest in these assets. Fund pools often include a mix of money market instruments, bonds, shares, and property. The advantage of fund pools is that the mixture often contains varied risk, however, the percentages will determine the overall risk class. HSBC investment fund options are:
- Global Investment Centre
- Selected Investment Funds
Customers who sign up for this service are in control of their own investment decisions. Furthermore, the process is simple as it allows customers to set up an account and trade online. Also, the platform provides tools to help customers make informed decisions.
- The option allows customers to trade in stocks and shares. The platform allows customers to buy and sell their stocks and shares whenever it suits them.
- Customers have access to stocks and shares ISA, which as no initial charge or annual management fee. Furthermore, customers will only pay an account fee for the taxed account.
- The platform also allows customers to create a virtual portfolio that lets them test their trading strategies.
- Furthermore, customers benefit from competitive rates that are paid quarterly in arrears.
- Customers need to prepare themselves for a long-term commitment as it should be held for at least five years.
- Finally, the investment type carries risks and customers should be prepared for the potential of loss.
Another bank with a competitive investment portfolio is Deutsche Bank. Read more here.
World Selection ISA
This option makes it possible for customers to invest at their preferred level of risk. They also have access to a range of portfolios. Furthermore, these portfolios are managed by qualified HSBC investment professionals.
- Customers can start investing with as little as £50 per month or a £1,000 lump sum.
- Furthermore, customers can invest up to £20,000 in the current 2016/2017 tax year.
- This is a ready-made portfolio which is managed by a team of qualified investment professionals.
- Also, this product is exclusive to HSBC current or savings account customers.
- With this product, customers can top up and withdraw whenever they like.
- Customers benefit from a range of asset classes, geographies, and currencies.
- Finally, customers gain access to a simple online application.
HSBC Premier Financial Advice Service
This service provides customers with access to a range of wealth building tools.
- Customers are required to have at least £50,000 or more in savings and investments.
- Furthermore, they need to be at least 18 years old and live in the UK.
- Finally, customers are required to have an HSBC or First Direct current account or savings account.
HSBC Onshore Investment Bond
This is a platform designed for a lump sum investment. Furthermore, this provides them with the potential for capital growth. Also, customers are allowed to make withdrawals from their investment.
- This bond is designed as a medium to long term investment.
- Customers can invest for growth or income, or both.
- Furthermore, the product allows customers to switch between funds with no immediate tax liability.
- There is also the option for Trusts to help mitigate Inheritance Tax.
- Finally, customers enjoy transparency and no hidden costs.
Child Trust Fund
This option allows a tax-efficient way for customers to save for their children’s future. The investment is spread over a wide range of investments in order to reduce risk.
- Customers can invest up to £4,080 each birthday year.
- When children reach the age of 18, they can access the money without paying tax.
- Finally, this product is only available to those who wish to transfer their existing Child Trust Fund.
Customers who prefer a straightforward savings account can read more on HSBC Savings here.
Critical Reviews Rating HSBC Investments – 9 of 10
The investments options made available by HSBC provide customers with the needed foundation to build their wealth. There are a number of options that expose customers to a variety of risks and a number of funds.
Clients who wish to leave a legacy have the option of straightforward investing or bringing over their Child Trust Fund to HSBC. If there is any flaw in an otherwise perfect portfolio of products, it would be the fact that customers can only access this product when they bring their existing one over. This forces them to seek assistance from other institutions, which could cost HSBC some business.
Furthermore, customers have the option to approach investments on their own, or with the help of a financial adviser. The various platforms make it simple for customers to make their investments, and when needed, access their funds.
The investment section is filled with helpful tips to assist customers when making their decisions. Also, there are guidelines in place as well that allow customers to invest with the full knowledge of what they’re getting themselves into. The products also disclose the funds that customers could expect to pay.
Finally, customers who have their savings and emergency funds safely tucked away and are now looking to increase their wealth, do so with the full knowledge that there is risk. The products to try to diversify portfolios in order to mitigate the risk. But even doing so, there is always a fair amount of risk to consider. The products allow customers to access fund managers they may not previously have discovered on their own.
Deutsche Bank offers a full financial planning portfolio. Read here to find out how it ranks.