Time to invest in a FTSE 100 tracker?
Discussion
"You mention three mining companies, and perhaps you possibly had a large proportion of your fund in that single sector. The eggs rule."
No,only two companies - (XTA was gobbled up by GLEN), and RIO - both bought when cheap as contrarian buys, both tripled in value and I should have taken profits but didn't, so, though the proportion rose with their success it was never more than 10% and though frustrating, not a big issue. I'm going to hold, though the amount of debt that especially Glencore has is worrisome. However I've not got the time or sufficient interest (nor clearly, discipline to sell!) for individual stocks atm.
No,only two companies - (XTA was gobbled up by GLEN), and RIO - both bought when cheap as contrarian buys, both tripled in value and I should have taken profits but didn't, so, though the proportion rose with their success it was never more than 10% and though frustrating, not a big issue. I'm going to hold, though the amount of debt that especially Glencore has is worrisome. However I've not got the time or sufficient interest (nor clearly, discipline to sell!) for individual stocks atm.
Jon39 said:
You clearly know, but some firms charge an annual percentage without any cap at all. That could eventually lead to some big annual fees.
I now won't use anyone, unless there is a fee limit (say £30 p.a.)
I assume their actual work involvement, will depend on how many holdings a client has, not the size of those holdings.
Absolutely.I now won't use anyone, unless there is a fee limit (say £30 p.a.)
I assume their actual work involvement, will depend on how many holdings a client has, not the size of those holdings.
But it is a trade off depending on AUM.
At the start with a smaller pot the %age figure might work out cheaper.
But obviously if you have £500k and they charge you 2%, you are just a LITTLE bit better off just paying £30+VAT!
I totally agree with the work involvement.
It's the same at £5k vs. £500k.
Jon39 said:
DonkeyApple said:
Here is a question:
Does everyone in the UK who uses an ISA also use up their CGT allowance each year?
If not, what is the reason for paying an annual fee for a tax shelter that is not required?
Does everyone in the UK who uses an ISA also use up their CGT allowance each year?
If not, what is the reason for paying an annual fee for a tax shelter that is not required?
The answer to your first question must be NO.
Second question - Let us assume that your investment strategy goes well, and after many years you achieve a high fund value. Let's for example call that £500,000 to 1m.
Imagine paying £30 a year (plus VAT) to keep an ISA running.
For that miniscule percentage fee, you know that you could withdraw the whole lot if you wanted to, completely tax free at any time.
Compare that to having the same fund outside an ISA.
You would probably be frightened to even consider selling your holdings, because of the enormous CGT bill, which is now charged on both GAINS and INFLATION.
You are quite right to ask why bother. In the initial years - little benefit, but later on you are certainly glad you have an ISA around your holdings.
Edited by Jon39 on Thursday 18th February 11:32
It's a product that has been pushed aggressively and indiscriminately by managers as it helps to lock people in and fits a management fee model to a majority of people who would never realistically be expected to have any kind of tax issue. I'm just surprised the no win no fee industry hasn't kicked off on a compo spree.
I believe I'm recalling correctly that ISA returns are exempt from Income Tax as well as CGT within the ISA. Income paid out from the ISA is also tax free.
Since "Greedy Gordon's" stealth tax raids the non-reclaimable dividend tax credit is no help to basic rate taxpayers but I think it does give ISA an advantage for higher rate taxpayers.
Yes, some people who have invested/re-invested religiously in their ISAs may by now have very large holdings. They ought to be able to agree "sensible" fees with their ISA providers.
My suspicion is that "Greedy George" may eventually cap off ISAs in the same way he has dealt with pensions. Fill yer pockets lads!
Since "Greedy Gordon's" stealth tax raids the non-reclaimable dividend tax credit is no help to basic rate taxpayers but I think it does give ISA an advantage for higher rate taxpayers.
Yes, some people who have invested/re-invested religiously in their ISAs may by now have very large holdings. They ought to be able to agree "sensible" fees with their ISA providers.
My suspicion is that "Greedy George" may eventually cap off ISAs in the same way he has dealt with pensions. Fill yer pockets lads!
Revisitph said:
I've managed to resist, but seeing substantial (well, substantial for me - a year's post-tax income) dip in the value of a portfolio over the last year or so was tough to watch!
Yes, sometimes strong nerves are required! Remember, a Pendulum swings to and fro, https://www.youtube.com/watch?v=o5CvtKKb3nQ
"Hold your colours against the wall,
When they take everything away,
Hold your colours against the wall,
With me."
OzOs
DonkeyApple said:
I agree but the average ISA portfolio is never going to get anywhere near that size. Doubt the average is even a tenth of that.
It's a product that has been pushed aggressively and indiscriminately by managers as it helps to lock people in and fits a management fee model to a majority of people who would never realistically be expected to have any kind of tax issue. I'm just surprised the no win no fee industry hasn't kicked off on a compo spree.
It's a product that has been pushed aggressively and indiscriminately by managers as it helps to lock people in and fits a management fee model to a majority of people who would never realistically be expected to have any kind of tax issue. I'm just surprised the no win no fee industry hasn't kicked off on a compo spree.
Hopefully not more of those waste of time, unwanted 'phone calls.
There is one way out for anyone who is locked in by exit fees, if they can be bothered.
Some better and cheaper providers, do refund exit fees when a new customer does an ISA transfer.
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