Best S&S ISA company?

Best S&S ISA company?

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Discussion

boyse7en

Original Poster:

6,671 posts

164 months

Thursday 5th September 2019
quotequote all
I've got a bit over £6k in a cash ISA currently earning the square root of bugger all in interest.

Think i want to put it in a Stocks and Shares ISA or similar.
I'm not an active investor - just want to put it into a tracker fund of some sort.

Looking around, the costs of investing seem to vary between companies quite considerably. Are there any advantages to going with one of the pricier ones, or do i just get a HL account (0.45% charge, fund purchases and sales are free) and be done with it?

Mr Pointy

11,145 posts

158 months

Thursday 5th September 2019
quotequote all
boyse7en said:
I've got a bit over £6k in a cash ISA currently earning the square root of bugger all in interest.

Think i want to put it in a Stocks and Shares ISA or similar.
I'm not an active investor - just want to put it into a tracker fund of some sort.

Looking around, the costs of investing seem to vary between companies quite considerably. Are there any advantages to going with one of the pricier ones, or do i just get a HL account (0.45% charge, fund purchases and sales are free) and be done with it?
If you really just want to stick it in a tracker then a more cost effective option is to invest directly, say with Vanguard Lifestrategy:

https://www.vanguardinvestor.co.uk/investing-expla...

This will cost you just 0.22% - don't forget the 0.45% HL charge is just their fee, you'll pay the fund fee as well (which varies greatly depending on which fund you go for). Look at transferring your existing ISA, not cashing it out, as that will preserve your allowance for this year.

Also have a look at the IM sticky at the top of the Finance forum.



bitchstewie

50,767 posts

209 months

Thursday 5th September 2019
quotequote all
Apologies if I'm about to patronise you massively but as you mentioned a tracker by which I assume you mean 100% equities, I'd suggest take a look at what happened in 2008 and even more recently the end of 2018 etc.

Earning the square root of bugger all on £6K is unpleasant but make sure you're prepared for going in one day and finding there is £5K in there if the markets are taking a beating.

JulianPH

9,912 posts

113 months

Friday 6th September 2019
quotequote all
Mr Pointy said:
If you really just want to stick it in a tracker then a more cost effective option is to invest directly, say with Vanguard Lifestrategy:

https://www.vanguardinvestor.co.uk/investing-expla...

This will cost you just 0.22% - don't forget the 0.45% HL charge is just their fee, you'll pay the fund fee as well (which varies greatly depending on which fund you go for). Look at transferring your existing ISA, not cashing it out, as that will preserve your allowance for this year.

Also have a look at the IM sticky at the top of the Finance forum.
Mr Pointy is quite correct about going direct to Vanguard rather than paying for the HL platform.

Please bear in mind though that there are dealing costs and Vanguard's own platform costs on top of the fund fee. However, the total costs are still only 0.4% to 0.45% compared to 0.7% to 0.75% with HL.

With regard the IM sticky at the top of the Finance Forum, there is an interesting table comparing the performance of Vanguard LS to IM Index (which costs 0.57%) on page 50.

I also agree with bhstewie that you may want to look at holding a mixture of shares and bonds when you first move from cash. Both Vanguard LS and IM Index offer this (along with other investment companies, of course).


gregf40mark2

74 posts

59 months

Friday 6th September 2019
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www.freetrade.io

The HL platform it absolutely terrible (even for someone experienced!) - and don't get me started on their fees.

boyse7en

Original Poster:

6,671 posts

164 months

Friday 6th September 2019
quotequote all
bhstewie said:
Apologies if I'm about to patronise you massively but as you mentioned a tracker by which I assume you mean 100% equities, I'd suggest take a look at what happened in 2008 and even more recently the end of 2018 etc.

Earning the square root of bugger all on £6K is unpleasant but make sure you're prepared for going in one day and finding there is £5K in there if the markets are taking a beating.
No need to apologise. I'm dangerously knowledgeable in terms of saving/investing - in other words i know a little bit but don't know what i don't know.

I'm not too worried about volatility as I just want to put the money in and basically forget about it. If look and it is worth £5k I'll just leave it a bit longer until it recovers.

Phooey

12,574 posts

168 months

Friday 6th September 2019
quotequote all
boyse7en said:
bhstewie said:
Apologies if I'm about to patronise you massively but as you mentioned a tracker by which I assume you mean 100% equities, I'd suggest take a look at what happened in 2008 and even more recently the end of 2018 etc.

Earning the square root of bugger all on £6K is unpleasant but make sure you're prepared for going in one day and finding there is £5K in there if the markets are taking a beating.
No need to apologise. I'm dangerously knowledgeable in terms of saving/investing - in other words i know a little bit but don't know what i don't know.

I'm not too worried about volatility as I just want to put the money in and basically forget about it. If look and it is worth £5k I'll just leave it a bit longer until it recovers.
You don't wait for it to recover, you add to it. Providing you've done a bit of research and put your £6k into a solid fund AND have a good (long) timespan then hopefully your £6k will take a beating and be worth £5k (or less!). Then what you do is reach into your pocket and add to it. Takes a strong mindset but a market crash can really make or break your investment/s. You don't understand how much I wish someone had told me this back in 2008 when I was blowing money on cars.. biggrinrolleyes

Phooey
(missed the 2008 boat. Waiting for the next one to come in..)

boyse7en

Original Poster:

6,671 posts

164 months

Friday 6th September 2019
quotequote all
Phooey said:
boyse7en said:
bhstewie said:
Apologies if I'm about to patronise you massively but as you mentioned a tracker by which I assume you mean 100% equities, I'd suggest take a look at what happened in 2008 and even more recently the end of 2018 etc.

Earning the square root of bugger all on £6K is unpleasant but make sure you're prepared for going in one day and finding there is £5K in there if the markets are taking a beating.
No need to apologise. I'm dangerously knowledgeable in terms of saving/investing - in other words i know a little bit but don't know what i don't know.

I'm not too worried about volatility as I just want to put the money in and basically forget about it. If look and it is worth £5k I'll just leave it a bit longer until it recovers.
You don't wait for it to recover, you add to it. Providing you've done a bit of research and put your £6k into a solid fund AND have a good (long) timespan then hopefully your £6k will take a beating and be worth £5k (or less!). Then what you do is reach into your pocket and add to it. Takes a strong mindset but a market crash can really make or break your investment/s. You don't understand how much I wish someone had told me this back in 2008 when I was blowing money on cars.. biggrin:roll eyes:

Phooey
(missed the 2008 boat. Waiting for the next one to come in..)
I'll stick more into it if I have any more spare! smile

Having kids has stopped any more savings (other than pension) over the past few years

boyse7en

Original Poster:

6,671 posts

164 months

Friday 6th September 2019
quotequote all
JulianPH said:
Mr Pointy is quite correct about going direct to Vanguard rather than paying for the HL platform.

Please bear in mind though that there are dealing costs and Vanguard's own platform costs on top of the fund fee. However, the total costs are still only 0.4% to 0.45% compared to 0.7% to 0.75% with HL.

With regard the IM sticky at the top of the Finance Forum, there is an interesting table comparing the performance of Vanguard LS to IM Index (which costs 0.57%) on page 50.

I also agree with bhstewie that you may want to look at holding a mixture of shares and bonds when you first move from cash. Both Vanguard LS and IM Index offer this (along with other investment companies, of course).
I had a read through the IM sticky, and it has basically confused me even more. Saw the table and get the concept of diminishing risk with a higher proportion of funds and higher risk/potential returns with a larger proportion of stocks and shares, but now I'm confused about the difference. I thought funds were investments in stocks and shares, but on a wider spread of shares than a single investor could manage.
Looks interesting, but everyone on there seems to be earning six figs and have £100k investments and i'm not in that sort of scale by any means. I've got this £6k ISA and a couple of pensions and that's it in terms of my net worth (other than the house and my dashing good looks)

bitchstewie

50,767 posts

209 months

Friday 6th September 2019
quotequote all
boyse7en said:
I had a read through the IM sticky, and it has basically confused me even more. Saw the table and get the concept of diminishing risk with a higher proportion of funds and higher risk/potential returns with a larger proportion of stocks and shares, but now I'm confused about the difference. I thought funds were investments in stocks and shares, but on a wider spread of shares than a single investor could manage.
Looks interesting, but everyone on there seems to be earning six figs and have £100k investments and i'm not in that sort of scale by any means. I've got this £6k ISA and a couple of pensions and that's it in terms of my net worth (other than the house and my dashing good looks)
When I was in a similar position which was only 18 months ago it was very much a blur too smile

Think of an ISA (or SIPP) as a "wrapper" that has tax benefits but may have some restrictions too (amount you can put in, when you can take it out etc.)

Think of a fund as a "bag" holding "assets" which could be stocks, bonds, property, gold, almost anything as there are thousands of funds available.

When you buy units in a fund each unit you hold means you own the corresponding amount of assets in the fund.

You can hold pretty much any mix of funds so (random example) with £10K you could buy 5x £2K funds each of which have different objectives, or you could buy 1x £10K etc.

The IM sticky is useful and I could be sorely tempted by the IM offering if I didn't already have investments.

I'd also google and look into "Vanguard LifeStrategy" as you'll find some really useful info that should help things to make sense.

JulianPH

9,912 posts

113 months

Saturday 7th September 2019
quotequote all
bhstewie said:
boyse7en said:
I had a read through the IM sticky, and it has basically confused me even more. Saw the table and get the concept of diminishing risk with a higher proportion of funds and higher risk/potential returns with a larger proportion of stocks and shares, but now I'm confused about the difference. I thought funds were investments in stocks and shares, but on a wider spread of shares than a single investor could manage.
Looks interesting, but everyone on there seems to be earning six figs and have £100k investments and i'm not in that sort of scale by any means. I've got this £6k ISA and a couple of pensions and that's it in terms of my net worth (other than the house and my dashing good looks)
When I was in a similar position which was only 18 months ago it was very much a blur too smile

Think of an ISA (or SIPP) as a "wrapper" that has tax benefits but may have some restrictions too (amount you can put in, when you can take it out etc.)

Think of a fund as a "bag" holding "assets" which could be stocks, bonds, property, gold, almost anything as there are thousands of funds available.

When you buy units in a fund each unit you hold means you own the corresponding amount of assets in the fund.

You can hold pretty much any mix of funds so (random example) with £10K you could buy 5x £2K funds each of which have different objectives, or you could buy 1x £10K etc.

The IM sticky is useful and I could be sorely tempted by the IM offering if I didn't already have investments.

I'd also google and look into "Vanguard LifeStrategy" as you'll find some really useful info that should help things to make sense.
^^^ This is a really good post and show just how knowledgeable you can become in investments in a short time, if you do some research.

OP - Sorry the IM sticky confused you even more. TBH I am not surprised as it has run to 51 pages and covers a very wide variety of investment related topics.

You are quite right in identifying that the larger the share (equity) exposure the higher the potential risk/reward.

As already said above, a fund is a collective investment whereby each fund holder has an equal exposure to all of the assets held within the fund.

Different funds invest in different assets. Some invest in different types of share, some in different types of bonds and others invest in completely different assets altogether.

Vanguard LS and IM Index are effectively portfolios of index trackers that invest cheaply and effectively in different levels of share(equities) and bonds, ranging from 100% to 80%, 60%, 40% and down to 20% in equities (shares) with the balance being held in bonds.

They are both great ways to simply and cost effectively buy the markets. Vanguard LS is slightly cheaper than IM Index, but after charges IM Index would have outperformed Vanguard LS.

One of the major problems for investors today is that there are just so many funds to chose from.


Condi

17,084 posts

170 months

Saturday 7th September 2019
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gregf40mark2 said:
The HL platform it absolutely terrible (even for someone experienced!) - and don't get me started on their fees.
Terrible? You're right about their fees not being cheap, but I would say its one of the simplest and easiest to use.

HarryW

15,150 posts

268 months

Saturday 7th September 2019
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No frills wrapper; iWeb perhaps, £25 opening fee, £5 a trade and no on going Mr percentages creaming off your fund bar the normal fund managers fee.

Edited by HarryW on Saturday 7th September 19:53

ILikeCake

311 posts

143 months

Saturday 7th September 2019
quotequote all
I use a few...

Fidelity is a popular platform. If you open a Cavendish ISA you get access at reduced fees. I find it okayish. I have a yearly problem trying to pay cash into the bloody thing. They also have a strange incessant need to produce shiny reports that are neither interesting or useful.

I have a sipp with AJ bell youinvest. This is prob my fave platform, easy to use and low fees.

The lowest of all fees is an x-o.co.uk I use. No opening fee or platform fee, just £5.95 a trade. It has a very minimal style and I've struggled to find certain funds using their platform.

Condi

17,084 posts

170 months

Sunday 8th September 2019
quotequote all
Do the cheaper platforms offer the same range of funds and stocks as the more expensive ones? HL have been good, and have a wide range of funds to invest in, but charge quite a large ongoing fee which is fine if they offer something over and above the cheaper platforms in terms.

bitchstewie

50,767 posts

209 months

Sunday 8th September 2019
quotequote all
Condi said:
Do the cheaper platforms offer the same range of funds and stocks as the more expensive ones? HL have been good, and have a wide range of funds to invest in, but charge quite a large ongoing fee which is fine if they offer something over and above the cheaper platforms in terms.
It depends.

IWEB is often held up as an example of a cheap platform for example, and it can be, if your transaction pattern fits their pricing model and what you're buying is on their platform

HL is held up as an expensive platform but you can have a million quids worth of Investment Trusts with them and pay £45/year or pay a lot more if you hold OEICs.

I'm not sure there's a one size fits all.

supercommuter

2,169 posts

101 months

Monday 9th September 2019
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Condi said:
gregf40mark2 said:
The HL platform it absolutely terrible (even for someone experienced!) - and don't get me started on their fees.
Terrible? You're right about their fees not being cheap, but I would say its one of the simplest and easiest to use.
Yeh, it is pretty simple to be honest. Not sure how it is terrible..

boyse7en

Original Poster:

6,671 posts

164 months

Monday 9th September 2019
quotequote all
OK, another numpty question.

All these "platforms" such as iWeb and HL etc all have a price per trade.

So that is the price to buy an investment into a fund? and then there are the fund managers charges (a percentage of the holding) to pay each month on top?
Is there any ongoing charge for using the "platform" as well?

I'm not planning on doing a lot of trades. I'm not knowledgable to keep swapping from one fund into another so it would be based on nothing better than hunches or guesswork, neither of which sounds like a good structured way of investing. TBH I don't understand how even the professionals can keep track of the best funds to buy into at any particular time, there seem to be hundreds!

bitchstewie

50,767 posts

209 months

Monday 9th September 2019
quotequote all
boyse7en said:
OK, another numpty question.

All these "platforms" such as iWeb and HL etc all have a price per trade.

So that is the price to buy an investment into a fund? and then there are the fund managers charges (a percentage of the holding) to pay each month on top?
Is there any ongoing charge for using the "platform" as well?

I'm not planning on doing a lot of trades. I'm not knowledgable to keep swapping from one fund into another so it would be based on nothing better than hunches or guesswork, neither of which sounds like a good structured way of investing. TBH I don't understand how even the professionals can keep track of the best funds to buy into at any particular time, there seem to be hundreds!
Again it depends (you'll hear this a lot smile).

The simple answer is read their charges but again there isn't a one size fits all answer.

Using the examples you gave IWEB charge for all trades whilst HL only charge for ETF/IT/Share trades.

But IWEB don't charge a platform fee whilst HL charge one but it's tiered and/or capped depending what you hold.

You'll hear a lot that charges matter, and they do, but also keep in mind that you said you've got £6K and whilst that isn't a small amount of money, even with HL who could be considered expensive, you'd only be paying a couple of quid a month in charges.

But honestly, it really does depend on a combination of factors.

boyse7en

Original Poster:

6,671 posts

164 months

Friday 21st February 2020
quotequote all
I finally bit the bullet (or pulled the trigger, in PH speak) and have transferred my Cash ISA into a Vanguard S&S ISA.

Now its asking me to decide what funds to invest into. As I don't really follow the financial world am i best to stick it all in a Vanguard 60 fund and let it do its thing? Or if thats not a good plan, what is?