Do I need an Investment Platform?
Discussion
Getting to that time of life when I'm beginning to accumulate rather than borrow and spend.... I'm looking for the easiest way to manage all this stuff.
At the moment I have a few years worth of cash ISAs - need to transfer these to Stocks & Shares - probably passive funds. Will also have funds in excess of the ISA limit which I'll invest in something similar, as well as bonds for short-term stuff.
I can scatter this around various banks etc, but it sounds like a pain to keep on top of it all. Is it worth subscribing to an investment platform e.g. HL or Fidelity. An experiences?
At the moment I have a few years worth of cash ISAs - need to transfer these to Stocks & Shares - probably passive funds. Will also have funds in excess of the ISA limit which I'll invest in something similar, as well as bonds for short-term stuff.
I can scatter this around various banks etc, but it sounds like a pain to keep on top of it all. Is it worth subscribing to an investment platform e.g. HL or Fidelity. An experiences?
Mike,
If you're at the point they can make your life simpler, they can be a boon. When you choose, anticipate your future needs as well - all platforms tend to focus on a sweet spot. Identify your future sweet spot and whoever satisfies that the best, that's the one to go for.
Look for functionality such as availability of tax wrappers, choice of funds and bandings for costs and charges. But do you actually *need* one? Well, no.. nobody needs one - it's an extra layer of cost and admin. The question is, can you justify that? For all of my clients, then yes, they can be justified because it makes planning far easier, which in turn, keeps costs down.
They add administrative efficiency and clarity as well, and it's probably better to get paperwork from one common source. I choose from about 20 but in reality, I tend to sift through 6-8 - mainly because my clients needs are quite closely aligned. The start of the year saw a bit of a bunfight with platform providers so shop around for the best deal.
If you're at the point they can make your life simpler, they can be a boon. When you choose, anticipate your future needs as well - all platforms tend to focus on a sweet spot. Identify your future sweet spot and whoever satisfies that the best, that's the one to go for.
Look for functionality such as availability of tax wrappers, choice of funds and bandings for costs and charges. But do you actually *need* one? Well, no.. nobody needs one - it's an extra layer of cost and admin. The question is, can you justify that? For all of my clients, then yes, they can be justified because it makes planning far easier, which in turn, keeps costs down.
They add administrative efficiency and clarity as well, and it's probably better to get paperwork from one common source. I choose from about 20 but in reality, I tend to sift through 6-8 - mainly because my clients needs are quite closely aligned. The start of the year saw a bit of a bunfight with platform providers so shop around for the best deal.
Mike,
All platforms claim rebates from fund managers - and these days, 'clean' share classes usually strip away the opaqueness. If you have £250k to invest, then something like Skandia (think Waitrose rather than Aldi or Tesco - NOT a social comment!) can be had for 0.3% pa plus fund costs. If you wanted a Fidelity passive fund, add 0.1 +/- change. Any other fund, then that cost too, has to be added.
Skandia can offer too much for some people though - sometimes, even though you have the capital to justify the cheaper costs, it doesn't mean because you can do something, you should. Other factors include choosing the wrappers available and getting the big picture right. Considering the macroperspective and getting that right first can knock the benefits of shaving and nicking the occasional 0.4% cost here and there into a cocked hat.
Aviva, Ascentric, Standard Life, Fidelity, CoFunds, Permenion, Novia etc.. they all offer platforms and fund supermarkets. Lots out there - getting the platform right is like choosing the right car for your specific needs. If you want an informal natter, inbox me.
All platforms claim rebates from fund managers - and these days, 'clean' share classes usually strip away the opaqueness. If you have £250k to invest, then something like Skandia (think Waitrose rather than Aldi or Tesco - NOT a social comment!) can be had for 0.3% pa plus fund costs. If you wanted a Fidelity passive fund, add 0.1 +/- change. Any other fund, then that cost too, has to be added.
Skandia can offer too much for some people though - sometimes, even though you have the capital to justify the cheaper costs, it doesn't mean because you can do something, you should. Other factors include choosing the wrappers available and getting the big picture right. Considering the macroperspective and getting that right first can knock the benefits of shaving and nicking the occasional 0.4% cost here and there into a cocked hat.
Aviva, Ascentric, Standard Life, Fidelity, CoFunds, Permenion, Novia etc.. they all offer platforms and fund supermarkets. Lots out there - getting the platform right is like choosing the right car for your specific needs. If you want an informal natter, inbox me.
The platforms do cost money but they also do negotiate discounts from certain funds/organisations, so the cost to you can be neutral, or it's even possible to save money (compared with buying into an OEIC completely independently). Another benefit of using a platform is that it is often possible to have the "joining fee" negotiated to 0% when investing in a fund.
Things to consider are the types of funds that the platform can do (e.g. Cofunds is not a good place to have cash in either savings accounts or ISA forms) and the nature of their charges. These are usually tiered, but some are a flat rate which can be cheaper if you have a very large amount invested through the platform. If you are married, find out if they offer a "family" (cheaper) rate for the combined value of any investments that are held in your individual names.
If you have a variety of investments like a SIPP pension, stakeholder pension, ISAs, OEICs etc then make sure that your target platform supports all of them. One of the main benefits of a platform is aggregating your entire portfolio in one place, it's irritating if a few things get left outside.
Look at the tools and the quality of the website. Amazingly, all the platforms I have experience of have websites that are deficient in one way or another making it hard to track growth YoY.
Consider if the platform offers offshore accounts if you want those.
Finally, don't make the mistake of thinking that because these vehicles have billions of pounds invested through them, that they are slick and faultless operations. There is a surprising amount of manual activity that takes place behind the scenes and mistakes can and do happen. You still need to check every single transation and report that they execute, in my opinion. Errors that I have detected from a number of different platforms on my own accounts are:
- incorrect day's unit price used for a sale
- incorrect entry charges being deducted from a fund
- wrong advisor % being deducted
- incorrect treatment of equalization in calculating capital gain
- completely incorrect CGT report calculation
- incorrect calculation of combined unit price when buying into the same fund at different times
- tax being deducted at source for offshore funds
and many more I've forgotten! So they are a convenience, can be cost-neutral, but they are not infallible.
Things to consider are the types of funds that the platform can do (e.g. Cofunds is not a good place to have cash in either savings accounts or ISA forms) and the nature of their charges. These are usually tiered, but some are a flat rate which can be cheaper if you have a very large amount invested through the platform. If you are married, find out if they offer a "family" (cheaper) rate for the combined value of any investments that are held in your individual names.
If you have a variety of investments like a SIPP pension, stakeholder pension, ISAs, OEICs etc then make sure that your target platform supports all of them. One of the main benefits of a platform is aggregating your entire portfolio in one place, it's irritating if a few things get left outside.
Look at the tools and the quality of the website. Amazingly, all the platforms I have experience of have websites that are deficient in one way or another making it hard to track growth YoY.
Consider if the platform offers offshore accounts if you want those.
Finally, don't make the mistake of thinking that because these vehicles have billions of pounds invested through them, that they are slick and faultless operations. There is a surprising amount of manual activity that takes place behind the scenes and mistakes can and do happen. You still need to check every single transation and report that they execute, in my opinion. Errors that I have detected from a number of different platforms on my own accounts are:
- incorrect day's unit price used for a sale
- incorrect entry charges being deducted from a fund
- wrong advisor % being deducted
- incorrect treatment of equalization in calculating capital gain
- completely incorrect CGT report calculation
- incorrect calculation of combined unit price when buying into the same fund at different times
- tax being deducted at source for offshore funds
and many more I've forgotten! So they are a convenience, can be cost-neutral, but they are not infallible.
what makes a good platform,i recently moved some into www.alliancetrustsavings.co.uk are they any good,flat rate and pay a set amount every quarter or is there something better
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