Micro Investing

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  • Anthorn
    Anthorn Posts: 4,362
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    JohnRo wrote: »
    One of us doesn't.

    Saving into a percentage based ISA platform typically has zero cost upfront.

    That's zero cost in case you didn't understand, as in absolutely nothing.

    When you've applied for and opened the ISA account and moved money in there is zero cost again.

    Then when you choose to buy an investment fund you'll pay zero cost again, keeping track.. that's zero so far.

    Only when you've purchased the fund do you then start to pay a platform fee charged monthly in arrears typically around 0.25% each year of whatever investment value you hold.

    For example, Hargreaves Lansdown another company which holds some of my funds charges 0.45% to a maximum of £45 per annum with no fees for buying and selling funds. As Stocks and Shares ISAs go that's cheap but correct me if I'm wrong, that's more than a flat £1 per month.
    http://www.hl.co.uk/investment-services/isa/savings-interest-rates-and-charges

    But not all ISA providers are created equal: For example a Halifax S&S ISA which in my view falls around middle of the spectrum:
    Real-time online trades
    £12.50 dealing commission per trade
    Scheduled regular investments £2.00 dealing commission per trade
    Annual administration charges
    £12.50 per year (including VAT)
    Transferring in shares from another ISA manager
    FREE
    Transfer in from an approved sharesave scheme FREE
    Transfer out charges £25 per investment (maximum £125)
    ISA closure fee
    No closure charge, however, the current annual administration fee (pro-rated) is payable
    https://www.halifax.co.uk/sharedealing/our-accounts/stocks-and-shares-isa/Default.asp

    Again correct me if I'm wrong but that too is more than £1 flat fee per month.

    I could go on and on quoting provider after provider and charges after charges but I don't think that's necessary. Overall, Moneybox at £1 per month flat fee is a good deal.
  • JohnRo
    JohnRo Posts: 2,887
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    Horses for courses.

    It depends how much, how often and in what form you're investing as to which platform provides the most economical fee structure.

    The example you gave shows you're paying Moneybox ~1.7% p.a.

    You'd be very hard pressed to find that sort of fee being charged on your investment amounts at any of the mainstream providers.
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
  • ColdIron
    ColdIron Posts: 8,902
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    Anthorn wrote: »
    For example, Hargreaves Lansdown another company which holds some of my funds charges 0.45% to a maximum of £45 per annum with no fees for buying and selling funds. As Stocks and Shares ISAs go that's cheap but correct me if I'm wrong, that's more than a flat £1 per month.
    http://www.hl.co.uk/investment-services/isa/savings-interest-rates-and-charges
    Allow me to correct you

    HL only apply the £45 cap to company shares, investment trusts or ETFs. There is a fee of £11.95 for buying and selling these

    If you have 'funds' (unit trusts/OEICs) then there is no cap and you pay the full 0.45% until you have £250,000. These are free to buy and sell. As Stocks and Shares ISAs go that's not cheap
  • Eco_Miser
    Eco_Miser Posts: 4,708
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    Anthorn wrote: »
    For example, Hargreaves Lansdown another company which holds some of my funds charges 0.45% to a maximum of £45 per annum with no fees for buying and selling funds. As Stocks and Shares ISAs go that's cheap but correct me if I'm wrong, that's more than a flat £1 per month.
    http://www.hl.co.uk/investment-services/isa/savings-interest-rates-and-charges

    But not all ISA providers are created equal: For example a Halifax S&S ISA which in my view falls around middle of the spectrum:

    https://www.halifax.co.uk/sharedealing/our-accounts/stocks-and-shares-isa/Default.asp

    Again correct me if I'm wrong but that too is more than £1 flat fee per month.

    I could go on and on quoting provider after provider and charges after charges but I don't think that's necessary. Overall, Moneybox at £1 per month flat fee is a good deal.
    But, according to your earlier post:
    Anthorn wrote: »
    The fees are a flat fee of £1 per month plus 0.45% platform fee per year.
    which means that H-L at only 0.45% per year is cheaper by £12 (or more if the cap applies), and H-L is expensive compared to most percentage fee platforms.

    Halifax, at 50p more than the flat-fee part of Moneybox's £1 a month, beats Moneybox whenever it's transaction fees amount to less than 0.45% of the total invested, which depends on the investor behavior.
    Eco Miser
    Saving money for well over half a century
  • jimjames
    jimjames Posts: 17,532
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    edited 18 March 2017 at 6:43PM
    Anthorn wrote: »
    The rest of your post repeats what you've already said to which I've already replied above. You obviously don't understand what it is you are attempting to discuss. For example you say that £12 a year is very expensive on whatever is squirelled away with knowing or even considering how much is squirrelled away.

    Unfortunately you're giving the impression of being the one who doesn't understand. When multiple people are telling you your info is incorrect then maybe it's time to reevaluate your thoughts HL only charges a percentage fee of 0.45% on funds. That's it, no other fees for putting money in.
    BettyBoof wrote: »
    My finances are not 'that tight' and I do have a pension. I was asking about M0ney B0x as I had just come across it and it seemed like a fun way for a complete beginner to start investing without needing a £10k lump sum, not because I am in dire financial straits!
    As I popsted originally you definitely don't need a £10k lump sum to get started with any mainstream S&S ISA provider, some start at £25 and most start at £50 so if money isn't an issue then one of those would be a far better choice.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • Plus
    Plus Posts: 433
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    Anthorn wrote: »
    Again correct me if I'm wrong but that too is more than £1 flat fee per month.

    I could go on and on quoting provider after provider and charges after charges but I don't think that's necessary. Overall, Moneybox at £1 per month flat fee is a good deal.

    Patient: Doctor, doctor, it hurts when I do this.
    Doctor: Well, don't do that then.

    There are plenty of percentage-fee providers whose costs are absolutely lower than Moneybox - for whatever amount of money you choose to invest. At that point, there's no point even considering the ones with fixed fees.

    But for any amount of money lower than the minimum investment of percentage fee providers (typically £50pm), the £12pa Moneybox fee is going to hammer any gains (it's equivalent to a 2% fee on £600pa).

    So all these tricks with saving the change and micro contributions are a nice gimmick, but basically either you invest enough to be cheaper at a mainstream provider, or the fees make it not worth your while investing.

    The only benefit I can see is the psychology of make you save, and introducing you to investment. That's maybe worth something. Maybe they can figure out a way to attract people with more cash and drop their fees to a market rate, using the micro contributions thing as promotion or loss leader. But the bottom line is fintech startups have to make revenue somehow, and targeting people with no money isn't the way to do that.
  • Anthorn
    Anthorn Posts: 4,362
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    edited 19 March 2017 at 9:19PM
    jimjames wrote: »
    Unfortunately you're giving the impression of being the one who doesn't understand. When multiple people are telling you your info is incorrect then maybe it's time to reevaluate your thoughts HL only charges a percentage fee of 0.45% on funds. That's it, no other fees for putting money in.

    As I popsted originally you definitely don't need a £10k lump sum to get started with any mainstream S&S ISA provider, some start at £25 and most start at £50 so if money isn't an issue then one of those would be a far better choice.

    Perhaps I worded my post wrongly: I actually posted what in my own personal experience of the cheapest I can think of which is HL because I use them. Then I quoted what I personalyt regard as middle of the road S&S ISA in terms of charges which is Halifax. To my mind that post of mine was therefore a fair comparison. Pretty obvious though if you actually read my post.

    But I wrote a quick forum post and not a scientific paper ROFL

    But your post is mainly pedantry: Where are your examples and links?
  • Anthorn
    Anthorn Posts: 4,362
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    edited 19 March 2017 at 8:48PM
    Plus wrote: »
    Patient: Doctor, doctor, it hurts when I do this.
    Doctor: Well, don't do that then.

    There are plenty of percentage-fee providers whose costs are absolutely lower than Moneybox - for whatever amount of money you choose to invest. At that point, there's no point even considering the ones with fixed fees.

    But for any amount of money lower than the minimum investment of percentage fee providers (typically £50pm), the £12pa Moneybox fee is going to hammer any gains (it's equivalent to a 2% fee on £600pa).

    So all these tricks with saving the change and micro contributions are a nice gimmick, but basically either you invest enough to be cheaper at a mainstream provider, or the fees make it not worth your while investing.

    The only benefit I can see is the psychology of make you save, and introducing you to investment. That's maybe worth something. Maybe they can figure out a way to attract people with more cash and drop their fees to a market rate, using the micro contributions thing as promotion or loss leader. But the bottom line is fintech startups have to make revenue somehow, and targeting people with no money isn't the way to do that.

    Good grief, the dogs really have been called out. But perhaps we need some new dogs because it's the same ones every time.

    Yet again pedantry: If you don't agree with my post then you must have one or alternatives but you don't quote them. If you don't have alternatives then you cannot possibly disagree!

    You obviously don't know the first thing about Moneybox: Kinda like saying you don't like Asparagus soup when you have never tasted it. btw it's very nice soup :)

    I'm moving on now so don't expect me to reply to further posts. I find pedantry pretty much a chore to read and reply to anyway. Really nothing constructive to reply to, just mindless verbal diarrhea.

    https://en.wikipedia.org/wiki/Pedant
  • Anthorn
    Anthorn Posts: 4,362
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    ColdIron wrote: »
    Allow me to correct you

    HL only apply the £45 cap to company shares, investment trusts or ETFs. There is a fee of £11.95 for buying and selling these

    If you have 'funds' (unit trusts/OEICs) then there is no cap and you pay the full 0.45% until you have £250,000. These are free to buy and sell. As Stocks and Shares ISAs go that's not cheap

    I really do hate to ask, but what's your alternative to a HL ISA which you say is "not cheap". Or don't you have one?

    My last in this thread anyway so don't bother.
  • ColdIron
    ColdIron Posts: 8,902
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    Don't let the door ... :)
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