Stocks and shares ISA - IFA or DIY

[Ginge R]

GregK2 said:

Signed up to fiveraday last night from the recommendations on here. Thoroughly impressed with the site and sign up process.

Nice 'chatting' earlier.

[bogie]

TartanPaint said:

bogie said:

£1500 a year is a lot to give some advice on a few funds.

Spend £15 on a book, educate yourself, and make your own mind up, then Self manage online...its really simple.

https://www.amazon.co.uk/d/Books/Millionaire-Teach...

Is that book a serious recommendation? I wouldn't mind reading something along those lines, but the presentation of that one stinks of "get rich quick" seminars, not "teach yourself investment and savings".

Thanks.

Yes its a good book, written by a "millionaire" retired school teacher who invested in sensible, boring, low cost index funds and bonds and retired a millionaire......Its some basic rules that could be taught to school kids, certainly parents should advise their kids. Wish I had read it when I started my first job at 16....I would have been retired by now too

[MKA29]

Ginge R said:

Nice 'chatting' earlier.

Probably a basic question but assuming one does not make £11,000 in profit in a tax year.. taking a general investment account is no different from a S&S ISA, is this correct?

[Ginge R]

MKA29 said:

Probably a basic question but assuming one does not make £11,000 in profit in a tax year.. taking a general investment account is no different from a S&S ISA, is this correct?

If you're investing and if your funds do well enough to breach your annual CGT allowance, you're saved from paying CGT by having your wealth within an ISA wrapper. And if you're not a Higher Rate taxpayer now, you might be in the future, and that's when the benefit will really be noticed.

In addition, if you want to place a decent amount of wealth into something like a Business Relief (BR) AIM ISA to avoid Inheritance Tax, then an ISA that invests specifically in AIM listed companies (smaller, fledgling companies) which qualify for BR can offer inheritance tax exemption *as well as* the traditional ISA benefits of tax-free income and capital growth. And you can now transfer the ISA benefit to a spouse on death too.

So, lots of benefits, and from a planning perspective, lots of *potential* benefits too. An ISA can allow you to keep more, pass more on, and it lets you keep your options open.

Edit: removed cash ISA stuff.

Edited by Ginge R on Thursday 9th March 22:16

[TartanPaint]

bogie said:

TartanPaint said:

bogie said:

£1500 a year is a lot to give some advice on a few funds.

Spend £15 on a book, educate yourself, and make your own mind up, then Self manage online...its really simple.

https://www.amazon.co.uk/d/Books/Millionaire-Teach...

Is that book a serious recommendation? I wouldn't mind reading something along those lines, but the presentation of that one stinks of "get rich quick" seminars, not "teach yourself investment and savings".

Thanks.

Yes its a good book, written by a "millionaire" retired school teacher who invested in sensible, boring, low cost index funds and bonds and retired a millionaire......Its some basic rules that could be taught to school kids, certainly parents should advise their kids. Wish I had read it when I started my first job at 16....I would have been retired by now too

Thanks bogie.

I read most of it last night until 0530 when I decided I had to get some sleep before the alarm went off at 0600. Couldn't put it down. I was raging. Why did nobody tell me this 20 years ago???

It criminal that we're not taught this at school. I could have been retired by now. As it is, a quick back-of-an-envelope calculation shows I have no hope of ever catching up to create a 4% rule sized pot, having been "advised" property was better than a pension.

Anyway, I'm getting started today, and my kids will get solid advice and help when the time comes.

I've got a load of questions, but I'll start new threads for those when I get my thoughts together and try a bit of my own research first.

Many, many thanks for posting the link. Absolutely life changing for me.

[BoRED S2upid]

I use HL a lot of detail about each fund where they are invested, past years performance, HL view on it etc... never used fiveraday I presume that doesn't refer to a cost to use it as that would be very expensive.

[Hainey]

TartanPaint said:

Thanks bogie.

I read most of it last night until 0530 when I decided I had to get some sleep before the alarm went off at 0600. Couldn't put it down. I was raging. Why did nobody tell me this 20 years ago???

It criminal that we're not taught this at school. I could have been retired by now. As it is, a quick back-of-an-envelope calculation shows I have no hope of ever catching up to create a 4% rule sized pot, having been "advised" property was better than a pension.

Anyway, I'm getting started today, and my kids will get solid advice and help when the time comes.

I've got a load of questions, but I'll start new threads for those when I get my thoughts together and try a bit of my own research first.

Many, many thanks for posting the link. Absolutely life changing for me.

Totally agree with you. All I can say is the best time to start was yesterday, the second best time is today.

Good luck.

[Shrimper]

Another vote for fiveraday, been using it for nearly a year now and it seems to be a great platform for novices like me

[DonkeyApple]

A traditional IFA is really only viable once you have funds to the level that the fees are a negligible cut of the average annual performance.

Self education and common sense are the core options open to the average investor along with the new micro investor platforms that are coming along.

[Hoddo]

WindyCommon said:

someonewithalittleknowledge said:

Hargreaves Lansdown ISA

Vanguard Lifestrategy 100% Equity

Set monthly savings to auto-invest in the Vanguard

Done.

That'll be 22bps to Vanguard for fund management and 45bps to HL for administration. A low cost fund and an expensive platform.

Why choose HL over another ISA provider with lower charges? Even Charles Stanley Direct is at 25bps for ISAs.

The "advice" offered freely here - and with such certainty - really is extraordinary at times.

For a truly passive approach investing monthly in low cost funds which is the cheapest platform? 25bps is appealing. Before I head off and do my own research wondering if anyone knows of a reliable comparison online.

[CarlosFandango11]

Hoddo said:

For a truly passive approach investing monthly in low cost funds which is the cheapest platform? 25bps is appealing. Before I head off and do my own research wondering if anyone knows of a reliable comparison online.

http://www.thisismoney.co.uk/money/diyinvesting/article-1718291/Pick-best-cheapest-investment-Isa-platform.html

[Hoddo]

CarlosFandango11 said:

Hoddo said:

For a truly passive approach investing monthly in low cost funds which is the cheapest platform? 25bps is appealing. Before I head off and do my own research wondering if anyone knows of a reliable comparison online.

http://www.thisismoney.co.uk/money/diyinvesting/article-1718291/Pick-best-cheapest-investment-Isa-platform.html

Much appreciated.

[toastyhamster]

Been looking at fiver a day, just bought the Millionaire Teacher book, some good advice on here.

[MKA29]

Ginge R said:

If you're investing and if your funds do well enough to breach your annual CGT allowance, you're saved from paying CGT by having your wealth within an ISA wrapper. And if you're not a Higher Rate taxpayer now, you might be in the future, and that's when the benefit will really be noticed.

In addition, if you want to place a decent amount of wealth into something like a Business Relief (BR) AIM ISA to avoid Inheritance Tax, then an ISA that invests specifically in AIM listed companies (smaller, fledgling companies) which qualify for BR can offer inheritance tax exemption *as well as* the traditional ISA benefits of tax-free income and capital growth. And you can now transfer the ISA benefit to a spouse on death too.

So, lots of benefits, and from a planning perspective, lots of *potential* benefits too. An ISA can allow you to keep more, pass more on, and it lets you keep your options open.

Edit: removed cash ISA stuff.

Edited by Ginge R on Thursday 9th March 22:16

Thanks for your help Ginge, that cleared it up for me

[DonkeyApple]

Ginge R said:

If you're investing and if your funds do well enough to breach your annual CGT allowance, you're saved from paying CGT by having your wealth within an ISA wrapper. And if you're not a Higher Rate taxpayer now, you might be in the future, and that's when the benefit will really be noticed.

In addition, if you want to place a decent amount of wealth into something like a Business Relief (BR) AIM ISA to avoid Inheritance Tax, then an ISA that invests specifically in AIM listed companies (smaller, fledgling companies) which qualify for BR can offer inheritance tax exemption *as well as* the traditional ISA benefits of tax-free income and capital growth. And you can now transfer the ISA benefit to a spouse on death too.

So, lots of benefits, and from a planning perspective, lots of *potential* benefits too. An ISA can allow you to keep more, pass more on, and it lets you keep your options open.

Edit: removed cash ISA stuff.

Edited by Ginge R on Thursday 9th March 22:16

It does raise the question as to at what level of wealth does paying for the tax efficiency of an ISA wrapper become relevant?

If you look at the average levels of savings in the U.K. the typical saver will simply never have need of the tax benefits but is being encouraged to pay for it.

For example, wouldn't something such as fiveraday be better if sold without the cost of the ISA wrapper as it's surplus to requirements for most and just removing performance in fees that are of no benefit?

[Ginge R]

Well, the ISA with Fiver is priced the same as the GIA (non ISA). I imagine that's the same for everyone.

Is the ISA pointless though? To an extent.. for some people - because the annual personal savings allowance helps. But let's think back. In last year's budget, remember when George Osborne did away with the divi tax credit and upped the divi allowance to 5k instead? Everyone justifiably said that the ISA was dead for basic rate taxpayers. Now, Hammond has cut the allowance back to 2k, and there's still no tax credit.

From next year, basic-rate taxpayers whose divi income exceeds £2,000 a year will be taxed at 7.5%, higher-rate taxpayers’ dividends will be taxed at 32.5%, and additional-rate taxpayers’ income from shares will be taxed at 38.1%. So, yeah.. I'd say that the common or garden ISA will still be priceless, especially as it's going to be worth 20k each pa from April.

If there are married couple reading this, and they don't think ISA are worth it, in the space of a few weeks, they can shelter £70,480 from Hammond's drop in the five allowance. So, although it's impossible to say it's the right thing to do, it's still certainly something to consider doing.

[Ginge R]

More thoughts from the Guardian. The most important point, probably, is that none of us knows what future tax legislation holds, or what our future income positions are going to be.

https://www.theguardian.com/money/2017/mar/11/isa-...

[aussieal]

This has been a really helpful thread guys, thanks.

Have done some more reading and narrowed down my options to the following:

1. Charles Stanley Direct ISA (seems to be fairly low annual fee at 0.25%) with Vanguard life strategy 80 or 60
2. Charles Stanley Direct ISA with a fund index portfolio covering UK and intl share and bonds - as per Millionaire Teacher's theory - just trying to identify some good funds now
3. Ginge R's fiver a day, came out as a 7/10 risk.

From what I can tell, all three would broadly do a similar job, with slightly different fees and slightly different levels of involvement.

Cheers

[aussieal]

Decision made, given the chaos of dealing with a young family at the moment (20 months and 3 months), need something I can leave to tick along on it's own for a while.

Going to go with Charles Stanley and a mixture of Vanguard Lifestrategy 80 and 60, set up a monthly DD, only 0.47% in fees, job done.

That way, can look at it in more detail when I have a little more time, without losing the chance to invest.

[KTF]

Out of interest, are you planning to drip feed in a regular amount or max it with this years ISA allowance (or as close as funds allow) then drip feed?