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  • FIRST POST
    • MSE Amy
    • By MSE Amy 15th Apr 14, 6:25 PM
    • 27Posts
    • 36Thanks
    MSE Amy
    Stocks & Shares ISAs
    • #1
    • 15th Apr 14, 6:25 PM
    Stocks & Shares ISAs 15th Apr 14 at 6:25 PM
    Hi!

    This is the discussion thread for the


    Click reply below to discuss. If you havenít already, join the forum to reply. If you arenít sure how it all works, read our New to Forum? Intro Guide.
Page 1
    • jimjames
    • By jimjames 15th Apr 14, 9:26 PM
    • 12,238 Posts
    • 10,774 Thanks
    jimjames
    • #2
    • 15th Apr 14, 9:26 PM
    • #2
    • 15th Apr 14, 9:26 PM
    Great that there is finally a guide to S&S ISAs.

    Apart from a typo in item 3 there are a few issues that may need to be thought about.

    The guide is quite detailed on reasons and who benefits - why is this some philosophy not applied to the cash ISA guide too?

    1) I TOTALLY disagree with this point. It is misleading and incorrect to state that a cash ISA should always be used. We know nothing of the individual circumstances; they may become a higher rate taxpayer, they may invest over time and then exceed the CGT limit - by then it is too late. If they already have sufficient cash then using S&S ISA makes sense.

    Basic rate tax payers who won't exceed the annual CGT allowance and are investing in stocks & shares - not corporate bonds - should ALWAYS max their cash ISAs first.

    2) I think it is also worth stating that there is no fixed term for a S&S ISA. It is usually stated that it should be held for 5 years or more but there is nothing to stop you getting money out earlier if you need it or if you have big profits. In some ways it is far more flexible than a fixed term cash ISA.

    3) Worth mentioning structured products that may be sold by banks and the restrictions on them - fixed dates to cash in and costs etc.
    Last edited by jimjames; 15-04-2014 at 9:31 PM.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • innovate
    • #3
    • 15th Apr 14, 11:37 PM
    • #3
    • 15th Apr 14, 11:37 PM
    My two pennieth worth on this, In summary, I am vastly disappointed with this MSE article and I hope that nobody will make investment decisions based on it.

    Everyone in the UK over 18 has a £11,880 ISA allowance. You can choose to use all of this for a stocks & shares ISA if you want, or you can put up to half of it in a cash ISA and the rest in a stocks & shares ISA.
    by MSE
    Everyone between 16 and 18 in the UK has a 2014-15 cash ISA allowance of £5,940 now, and £15,000 from July 1 onwards. In addition, under 18 year olds not entitled to a CTF are also entitled to a JISA, alongside an 'adult' ISA. MSE should have a detailed article about ISAs for kids and young adults.


    As such, if you're looking to use your money within the next couple of years, you should probably stick to cash savings such as a cash ISA.
    by MSE
    Not again, please........ When are we finally going to get rid of the apparent MSE obsession with "ISA at all costs"?


    Should I use my cash ISA allowance or invest it all?
    It depends whether you gain from the tax breaks above and if you're willing to risk your money investing. But in a nutshell:

    - Basic rate tax payers who won't exceed the annual CGT allowance and are investing in stocks & shares - not corporate bonds - should ALWAYS max their cash ISAs first.

    - Big investors, especially those putting money in corporate bonds, should ALWAYS max their stocks & shares ISAs.

    - Only investing? ALWAYS max your stocks & shares ISA as it's often cheaper to invest within a stocks & shares ISA.
    by MSE
    this is pretty shocking advice, I am afraid. Where are your considerations to the age of the investor, their access to an emergency cash fund, their need for their funds in the near term, their risk acceptance etc etc? Honestly, MSE, what you have published there is worse than what you get in the Daily Mail!

    Investing in a stocks & shares ISA is a two-stage process. First you need to pick which provider to buy your ISA from, then you need to decide what investments to put it in.
    by MSE
    you are right, it is a two stage process. Unfortunately, you got the two stages 100% the wrong way round. You first decide what you invest in, and then look at who offers you the best deal for those investments.

    Further, there is no mention of workplace pensions or SIPPs. These are, for many people, very valid alternatives to S&S ISAs, particularly after the changes introduced in the last budget. Just looking at cash ISAs vs S&S ISAs is ignoring a full third of the options for putting money away. Also, it isn't necessarily an 'either' 'or' - a combination of some or all is perfectly feasible in many cases.

    I am quite disappointed with MSE's suggestions about books and websites that discuss investments in details. There seems to be no appreciation that there are thousands of available investments.

    Understand the charges of a stocks & shares ISA
    by MSE
    very valid and important point. Shame MSE are not talking about dealing, exit, and incidental charges. All of which can amount to huge amounts.

    Hargreaves Lansdown, the biggest provider, is now one of the most expensive
    by MSE
    Well, yes and no. They may be, they may not be. It all very much depends on how much you have invested and in what you invested. (MSE, have you heard of snowman's spreadsheet that allows people to compare platforms, based on their investment profiles?)


    Lots of investors also like Hargreaves Lansdown for the depth of knowledge it provides, such as its Wealth 150 guide
    by MSE
    honestly, giving an implied endorsement to the HL Wealth 150 Guide. I am appalled.

    Best Buys: New stocks & shares ISA provider
    by MSE
    all affiliates. 'nuff said.

    LOL, and the same for providers that allow transfers in.
    • oioisexy
    • By oioisexy 16th Apr 14, 9:55 AM
    • 6 Posts
    • 4 Thanks
    oioisexy
    • #4
    • 16th Apr 14, 9:55 AM
    • #4
    • 16th Apr 14, 9:55 AM
    Could someone please help me understand how the percentage platform charge is applied, i.e. Cavendish Online 0.25% fee. Is it a the point of opening a fund or at the end of the year? Will I be charged the full annual 0.25% if I decide to move my funds to another platform or is it pro rata?

    Also while I'm here, how do I buy individual bonds? I'm looking on Cavendish Online and all I can find are funds of bonds. Am I missing something?

    Thanks in advance.
    • SnowMan
    • By SnowMan 16th Apr 14, 10:06 AM
    • 3,130 Posts
    • 5,797 Thanks
    SnowMan
    • #5
    • 16th Apr 14, 10:06 AM
    • #5
    • 16th Apr 14, 10:06 AM
    MSE, have you heard of snowman's spreadsheet that allows people to compare platforms, based on their investment profiles?
    Originally posted by innovate
    Thanks for the mention. For those coming here via the weekly email the link to the updated downloadable platform comparison spreadsheet is contained in this post.

    Other comparisons of stocks and shares ISA platform charges that investors will find useful are

    1. Justin Modray's excellent calculator at compare fund platforms.

    2. The monevator broker comparison table

    3. The langcat comparative ISA tables (scroll down the blog to the tables, it is currently the table in this blog post that is relevant)
    Last edited by SnowMan; 16-04-2014 at 10:08 AM.
    I came, I saw, I melted
  • Eric1925
    • #6
    • 16th Apr 14, 12:17 PM
    ISAs and Gift Aid
    • #6
    • 16th Apr 14, 12:17 PM
    I haven't seen mention of the fact that whilst if you hold shares outside of an ISA you can use the tax that you have paid to the Government, as a donation to a charity using Gift Aid. But if your shares are in an ISA. the Government takes your tax and you cannot use it in an ISA. Definately a negative point if like me you have enough money to buy shares but are not wealthyenough to be in an upper tax level. Eric
  • Eric1925
    • #7
    • 16th Apr 14, 12:22 PM
    ISAs and Gift Aid
    • #7
    • 16th Apr 14, 12:22 PM
    Oh dear!
    This sentence;
    But if your shares are in an ISA. the Government takes your tax and you cannot use it in an ISA.
    Should read;
    But if your shares are in an ISA. the Government takes your tax and you cannot use it as Gift Aid.
    • BobQ
    • By BobQ 16th Apr 14, 12:35 PM
    • 9,823 Posts
    • 12,757 Thanks
    BobQ
    • #8
    • 16th Apr 14, 12:35 PM
    • #8
    • 16th Apr 14, 12:35 PM
    I think the above comments are a trifle unfair. This is intended as guidance for the inexperienced.

    For example, it is a fact that you cannot investing a fund unless you have a platform first. True that if you pick a platform first you may find the fund is cheaper on another platform but they do make the point that this might be the case.
    Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.
    • SnowMan
    • By SnowMan 16th Apr 14, 12:53 PM
    • 3,130 Posts
    • 5,797 Thanks
    SnowMan
    • #9
    • 16th Apr 14, 12:53 PM
    • #9
    • 16th Apr 14, 12:53 PM
    Could someone please help me understand how the percentage platform charge is applied, i.e. Cavendish Online 0.25% fee. Is it a the point of opening a fund or at the end of the year? Will I be charged the full annual 0.25% if I decide to move my funds to another platform or is it pro rata?
    Originally posted by oioisexy
    If you are using Cavendish (via Fidelity) then the charge is applied monthly I understand see

    https://www.fidelity.co.uk/adviserservices/in-focus/funds-shareclasses/pricing.page

    and click on 'tell me about the service fee'.

    Also while I'm here, how do I buy individual bonds? I'm looking on Cavendish Online and all I can find are funds of bonds. Am I missing something?
    Cavendish only have access to a funds supermarket and I don't think there is an option to buy shares, ETFs or gilts through them.

    To buy gilts you need to use a platform or broker that does allow purchase of stocks and shares and ETFs which will usually allow purchase of gilts also.

    For example I have a sharedealing account with First Direct and I can do a search on there for government gilts and purchase them just like shares. A cheap sharedealing broker like x-o would be a good option.

    You can buy gilts direct from the UK Debt Management Office also see here but have never looked at how cost effective that would be.

    See this monevator article for a discussion of whether to buy individual gilts or gilt funds.

    Bear in mind that rates on best buy fixed interest ISA savings accounts are generally better than redemption yields on gilts of the same term.
    Last edited by SnowMan; 16-04-2014 at 1:32 PM.
    I came, I saw, I melted
    • wooder
    • By wooder 16th Apr 14, 12:53 PM
    • 77 Posts
    • 52 Thanks
    wooder
    I think the above comments are a trifle unfair. This is intended as guidance for the inexperienced.

    For example, it is a fact that you cannot investing a fund unless you have a platform first.
    Originally posted by BobQ

    Fundsmith ?
  • innovate

    For example, it is a fact that you cannot investing a fund unless you have a platform first. True that if you pick a platform first you may find the fund is cheaper on another platform but they do make the point that this might be the case.
    Originally posted by BobQ
    You are joking, are you. Your, and the MSE, approach is a bit like choosing a car dealer before you have even established whether you want a car or a push bike.

    Giving inexperienced people the wrong advice is a terrible thing to do.
  • innovate
    Fundsmith ?
    Originally posted by wooder
    Perhaps locate the forum threads about Fundsmith?
    • jimjames
    • By jimjames 16th Apr 14, 1:56 PM
    • 12,238 Posts
    • 10,774 Thanks
    jimjames
    You are joking, are you. Your, and the MSE, approach is a bit like choosing a car dealer before you have even established whether you want a car or a push bike.

    Giving inexperienced people the wrong advice is a terrible thing to do.
    Originally posted by innovate
    Very true.

    The post below is a perfect example of picking fund platform before checking what to buy and shows the danger of giving incorrect or partial info.

    Also while I'm here, how do I buy individual bonds? I'm looking on Cavendish Online and all I can find are funds of bonds. Am I missing something?
    Originally posted by oioisexy
    Remember the saying: if it looks too good to be true it almost certainly is.
    • oioisexy
    • By oioisexy 16th Apr 14, 2:39 PM
    • 6 Posts
    • 4 Thanks
    oioisexy
    Very true.

    The post below is a perfect example of picking fund platform before checking what to buy and shows the danger of giving incorrect or partial info.
    Originally posted by jimjames

    Thank you, but in fact I'm quoting Cavendish since I already have an account with them prior to reading the info given here... It is true, it is not clear which platform allows to buy what types of investments. I simly want to be able to browse bonds that are currently available and understand how one would go about actually buying.
    I hope that nobody with a lot of money to invest is just going to go with the first platform mentioned, but this guide is a good starting point for someone willing to dip their toes for the first time. You can spend a lot of time comparing all the different platforms out there and then never actually do anything about it as there's too much to take in.
    Last edited by oioisexy; 16-04-2014 at 2:45 PM.
    • Archi Bald
    • By Archi Bald 16th Apr 14, 3:06 PM
    • 9,355 Posts
    • 7,418 Thanks
    Archi Bald
    You can spend a lot of time comparing all the different platforms out there and then never actually do anything about it as there's too much to take in.
    Originally posted by oioisexy
    You do not need to spend a lot of time comparing platforms if you know how to go about comparing them, and why you are comparing them. See snowman's post for more info.
    • Robin Davies
    • By Robin Davies 16th Apr 14, 3:08 PM
    • 27 Posts
    • 25 Thanks
    Robin Davies
    Looking for a platform?
    Take a look at Charles Stanley Direct. Similar charges to Cavendish but may have more scope. Excellent website too.
    • SnowMan
    • By SnowMan 16th Apr 14, 3:42 PM
    • 3,130 Posts
    • 5,797 Thanks
    SnowMan
    Take a look at Charles Stanley Direct. Similar charges to Cavendish but may have more scope. Excellent website too.
    Originally posted by Robin Davies
    One difference in platform charges for funds that is worth mentioning:

    No exit fee for re-registering ISA funds away from Cavendish.

    But £10 per fund re-registration away fee from a Charles Stanley stocks and shares ISA.
    Last edited by SnowMan; 16-04-2014 at 4:45 PM.
    I came, I saw, I melted
    • LookingToTheFuture
    • By LookingToTheFuture 16th Apr 14, 5:06 PM
    • 75 Posts
    • 63 Thanks
    LookingToTheFuture


    1) I TOTALLY disagree with this point. It is misleading and incorrect to state that a cash ISA should always be used. We know nothing of the individual circumstances; they may become a higher rate taxpayer, they may invest over time and then exceed the CGT limit - by then it is too late. If they already have sufficient cash then using S&S ISA makes sense.

    "Basic rate tax payers who won't exceed the annual CGT allowance and are investing in stocks & shares - not corporate bonds - should ALWAYS max their cash ISAs first."
    Originally posted by jimjames
    I was surprised too that MSE stated that basic rate taxpayers should always max out cash ISAs. Despite being a basic rate taxpayer and very unlikely to exceed the CGT limit for a very long time (if ever), I have chosen to invest using a tax wrapper for the simple reason that it saves a lot of bother with record keeping and filling out a tax return.

    I definitely don't intend to take out a cash ISA while rates are at the levels they are now - I'm sticking to current accounts for my cash savings. And if rates do improve in the future I'll have a £15000 allowance each year which will be more than enough for me!

    This new guide will only serve to put lower paid people off investing their long term savings - the very people that need to make the maximum return out of every penny. Thank goodness for the forums - they're what makes this site worth using.
    Last edited by LookingToTheFuture; 16-04-2014 at 5:13 PM. Reason: typo
    • mikebeaches
    • By mikebeaches 16th Apr 14, 8:01 PM
    • 37 Posts
    • 40 Thanks
    mikebeaches
    I have chosen to invest using a tax wrapper for the simple reason that it saves a lot of bother with record keeping and filling out a tax return.
    Originally posted by LookingToTheFuture
    Indeed, this is a very important point and one that should not be underestimated, especially by those new to investing in stocks and shares. However, it isn't mentioned in the guide, unfortunately.
    • trevjl
    • By trevjl 16th Apr 14, 8:41 PM
    • 46 Posts
    • 22 Thanks
    trevjl
    I'm a pretty new investor since last December and have mine with H & L. I went with them because of the old S & S ISA guide which gave them a decent review. I looked a few days ago and the guide was still the same and if memory serves me had not been updated since 2009 (stand to be corrected on that) but it was certainly a long time ago. I look tonight after getting the weekly email and low and behold it has been updated and H & L are now awful !! If I'm reading it right their charges will now cost me £45 per £10K and I could get it for £25, so that will save me £25 per ten thousand pounds each year. Hmmm don't think I will be rushing to move. I know rates and costs are important in all things but does customer service count for nothing anymore. I will be staying put as IMO their customer service is first class, their website and apps easy to use, informative and convenient. Probably the same reasons I have banked with first direct since it's inception.
    Is it me or has this website become progressively worse since it sold out ?
    Rant over
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