Is TD Waterhouse the cheapest way to invest in Vanguard lifestrategy funds for my ISA

dharm999 · 13 January 2013 at 12:54PM

Have finally decided to invest in Vanguard Lifestrategy funds, probably the 80% or 100%, as I'm happy to take a long term view with some risk. Having read various things on here, it seems that investing in them via a TD Waterhouse S&S Isa is the cheapest way to do it. I will be investing a lump sum for the current tax year, and then a regular monthly investment for the new tax year.

Thank you for your help

koru · 13 January 2013 at 1:15PM

Yes, far as I know.

ColdIron · 13 January 2013 at 1:19PM

I could be wrong but I thought HL were cheapest as long as you only want one Vanguard fund

atypical · 13 January 2013 at 1:23PM

If you set up regular investing TDW don't charge anything so is cheaper than HL.

ColdIron · 13 January 2013 at 1:25PM

Well you can't argue with nothing at all, my apologies

innovate · 13 January 2013 at 1:30PM

atypical wrote: »

If you set up regular investing TDW don't charge anything so is cheaper than HL.

But to stay charge-free, you have to have a minimum of £5,100 in the ISA (£7,500 non-ISA), don't you?

ISA accounts with a value on the last business day in May each year of £5,100.00 or greater will not be charged an annual administration fee.

ISA accounts with a value on the last business day in May each year of £5,099.99 or less will be charged an annual administration fee of £30 plus VAT on or around the first business day in June.

Source: http://www.tddirectinvesting.co.uk/choose-an-account/trading-isa/

JohnRo · 13 January 2013 at 2:14PM

It is at the moment because TD charge nothing, I can't see that lasting though.

The problem I have with TD Direct is that their rates and charges document is less than clear. For purpose of this debate they offer two sorts of accounts, a trading account and a regular investment account.

Both can be held unwrapped and/or within an ISA wrapper so four flavours altogether.

trading
trading ISA
reg. invest
reg. invest ISA

Their charges and fees document only describes charges, specifically, on a trading account and charges on a trading ISA account, it doesn't then distinguish between an ISA wrapped or unwrapped regular investment account.

The regular investment account is simply listed as one entry having annual charges of zero with no requirements, whether that applies to both wrapped and unwrapped is anyone's guess but their Trading ISA details quoted below suggest the £5100 balance requirement is needed for all types of ISA account.

The other slight confusion (for me at least) is whether the list of requirements to obtain "No Fee" are exclusive or inclusive requirements.

TD_Direct_Investing wrote:

What is a TD Trading ISA?

A TD Trading ISA offers you all the advantages of a tax efficient ISA plus the ability to control your investment in a wide range of investment options including: UK Equities, International Equities, Gilts, Bonds, Investment Trusts, Unit Trusts, OEICs and Exchange Traded Funds.

You can invest up to the full subscription limit for the current tax year.

Any income received on your TD Trading ISA, such as dividends or interest, will automatically be credited to the cash balance on your account. It is your decision as to whether you invest or withdraw this income.

You can choose from:

• Stocks and Shares TD Trading ISA, or
• Regular Investment Stocks and Shares ISA

The TD Regular Investment ISA is an online monthly investment service which, in addition to your normal real time trading, lets you make small monthly payments and then purchase stocks regularly for just £1.50 commission. You can also purchase funds, which don't incur commission but may have a Fund Manager charge.

Who is it for?

The TD Trading ISA is ideal for the investor who wants to make the most of their capital gains tax allowance on lump sum investments, with the ability to control what they invest in.

How much does it cost?

There is no initial set up fee. For ISAs valued £5,100 and above on the last day of May each year there is no annual charge. The annual account administration fee for ISAs valued £5,099.99 or less is £30 plus VAT and will be charged on or around the first business day in June.

When are the tax deadlines?

The tax year begins on April 6th each year. Any cash deposits into a TD Trading ISA in a single year would need to be funded before 5.00pm on 5th April of that tax year.

If you have any queries about our services or your upgrade options, please call us on 0845 607 6001.

Then on another page of their website, they have the following...

http://www.tddirectinvesting.co.uk/choose-an-account/rates-and-charges/isas/

Note: The Administration Fee will be charged once a year on or around the first business day in June, calculated on the account value on the last business day in May. The Administation Fee will not be charged on the Regular Investment ISA.

jamesd · 13 January 2013 at 2:37PM

dharm999 wrote: »

Have finally decided to invest in Vanguard Lifestrategy funds,

It's unlikely that TD Waterhouse will be cheapest. They plan to introduce a platform charge of 0.35% for funds later this year according to the FT yesterday. At the moment they apparently have around 700 managed funds with no commission - 0.75% or so AMC instead of 1.5% or so - and no fund platform charge just as an introductory measure.

Best to be sure that this'll make sense for you or at least confirm whether it will or won't apply to whatever you plan to do with them before you do it. At the moment I see that their ISA says the platform fee is 0.35% only for funds charging an [STRIKE]AMC[/STRIKE] commission cost of 0.5% or higher, nil if lower.

The HL fee of £2 a month works out at 0.2% a year on a full year's ISA allowance worth of investment. And drops as a percentage as the value increases, while the TD Waterhouse one would stay the same higher fixed percentage.

grey_gym_sock · 13 January 2013 at 5:52PM

the 0.35% platform fee is also revealed on TD's site here: http://www.tddirectinvesting.co.uk/investment-choices/funds-unit-trusts-and-oeics/rdr-important-info/

we will not be charging a platform fee on clean funds until August 2013. The fee we will introduce at this time will be 0.35%.

EDIT: sorry, i hadn't seen the other thread about this - https://forums.moneysavingexpert.com/discussion/4388341

JohnRo · 13 January 2013 at 6:38PM

jamesd wrote: »

At the moment I see that their ISA says the platform fee is 0.35% only for funds charging an AMC of 0.5% or higher, nil if lower.

James, TD state trail commission, it says nothing about AMC?

That means a fund paying more than 0.5% trail commission is reduced down to a fee of 0.35%

and a fund paying less than 0.5% trail commission is reduced to zero.

koru · 13 January 2013 at 6:59PM

jamesd wrote: »

The HL fee of £2 a month works out at 0.2% a year on a full year's ISA allowance worth of investment. And drops as a percentage as the value increases, while the TD Waterhouse one would stay the same higher fixed percentage.

And for that reason, I guarantee you that HL will be increasing their charges at some point in the next 12 months. The only difference is that they are unlikely to give any advance warning and they are likely to charge a lot more than 0.35%, given that they currently earn more than 0.6% on average. (That is, unless they are successful in persuading the FSA that they can continue receiving trail and platform commission on those funds that pay such commission. If so, then maybe they will be willing to continue with the £2 per month fee for those funds that do not pay commission, like Vanguard, in the hope that people who buy those funds will primarily be buying funds on which they earn commission.)

Is TD Waterhouse the cheapest way to invest in Vanguard lifestrategy funds for my ISA

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