Broker/Fund Supermarket - Suggestions and Recommendations please?

Fry_2

Presently, I have invested in individual shares via an online account. I have realised that from opening and trading in an account how important it is to pick the "right" service from the very beginning.

I would like to put money (a lump fund followed by monthly drip feeding of funds) into a UK Index Tracker (such as MoneyBuilder UK Index Fund) and as I get more confident with funds (and have greater capital to risk), move into more complex and specific funds. I have not used any of my Mini-Share ISA allowance so I would probably make use of this as well.

Looking at several discount brokers and online services, I have tended towards thinking that Fidelity's FundsNetwork seems to give clear information and wide range of trackers and international funds. I note that looking through past threads that Hargreaves Lansdown have been mentioned quite often but I am sure there are more that people could recommend from their experiences (good or bad).

So, finally my question:
Can anyone who has used FundsNetwork (or another Discount Broker/ Fund Supermarkets) make any recommendations so I make the correct decision first time and do not have to pay later to transfer funds to another service?

Thanks for reading and any advice.

greenwich

dunstonh will probably be along later to help you but, for what it's worth:

- You'll find HL give bigger discounts than Fidelity on both initial and annual charges.

- One other alternative is Cofunds. You can't go direct to them but you can go through brokers such as bestinvest.

- If you're planning to do a lot of fund switching then also check the switching charges. I think Cofunds charge 0.25% per switch.

- If you just want a tracker then the cheapest option may be to buy Exchange Traded Funds (ETF). They are shares traded on the stock exchange that track indices. See http://www.trustnet.com/etf/ You don't pay stamp duty when you buy them. https://www.squaregain.co.uk let you buy and sell them free of commission, which is very cost-effective.

dunstonh

Cofunds, Selestia, Fidelity, Skandia, Transact, Amex to name just a few. A few IFAs, such as HL, have negotied terms to offer their own branded fund supermarket.

Although i cannot recommend one provider here, each has features or negative points which could influence your decision.

Selestia will not do MINI isas but good service and some very good portfolio building tools (also have annual rebalancing built in if required). Cofunds will not allow re-registration away from them (big limitation). Cofunds have awful service as well. Transact are more expensive with small holdings but cheaper with larger holdings or where where there are family links (transact allow individual holdings but will add the total holdings of all family members and base the charges on the combined charges). Frequent switchers may find Transact cheaper. Fidelity are fine but I have found their telephone service quite poor.

The fund supermarkets will also have differences in the fund range so certain desirable funds may or may not be available.

greenwich

dunstonh wrote:

Cofunds will not allow re-registration away from them (big limitation).

What is re-registration? I have an ISA with Cofunds. Does that mean I can't transfer it away from them to another supermarket?

greenwich

dunstonh wrote:

Cofunds have awful service as well.

I transferred an ISA to Cofunds earlier this year. It took several weeks, longer than I thought it should, but I was not in the mood to go through a complaints procedure so I said nothing. About six months later, out of the blue I got a cheque from Cofunds as compensation. Make of that what you will.

dunstonh

re-registeration is when you want to switch your ISA provider to another one. Re-reg is done at no cost. Whereas a transfer will incur fees, to some degree.

Lets say cofunds let you down on something or you become concerned over their financial strength (and there have been concerns on that front), you wont be able to re-register away from them but will have to transfer.

I transferred an ISA to Cofunds earlier this year. It took several weeks, longer than I thought it should, but I was not in the mood to go through a complaints procedure so I said nothing. About six months later, out of the blue I got a cheque from Cofunds as compensation. Make of that what you will.

Personally, I rate Norwich Union on service. However, i think I am the only IFA that does. There will always be good news stories with any provider but co-funds are well known in the industry for poor service.

greenwich

dunstonh wrote:

Lets say cofunds let you down on something or you become concerned over their financial strength (and there have been concerns on that front), you wont be able to re-register away from them but will have to transfer.

:eek: If Cofunds go bellyup what happens to my ISA? Can their creditors get their hands on it? Presumably Cofunds are holding it in trust for me. Would I be covered by any compensation scheme?

carnet

dunstonh wrote:

co-funds are well known in the industry for poor service.

Would certainly endorse this view.

Currently trying to sort out yet another Cofunds ****-up and the brokers, Bestinvest, are, once again, proving to be more of a hindrance than a help.

Considering selling the lot (non ISA) and moving elsewhere, despite the cost -but don't like to have too much with any one broker (or fund supermarket for that matter).

carnet

greenwich wrote:

:eek: If Cofunds go bellyup what happens to my ISA? Can their creditors get their hands on it? Presumably Cofunds are holding it in trust for me. Would I be covered by any compensation scheme?

The following is an extract from HL, but the general points, eg. para 6, will equally apply to all investments effected through registered intermediaries etc.


"If your investments were taken out via Hargreaves Lansdown but are outside our Vantage Service and are not held directly with us but with a third party fund manager, they would be subject to the security of that third party. However, in respect of investments held directly with us in the Vantage Service, below I have given a summary of the key protections that apply to you as a private investor with regards to these investments.

1. Hargreaves Lansdown are regulated by the Financial Services Authority (FSA) and are bound by their rules and regulations in the conduct of our investment business.

2. Hargreaves Lansdown are authorised by the FSA to hold client money and certificates of title. If you would like to check our authorisation at any time then you can telephone the FSA Consumer Help Line on 0845 606 1234. Alternatively, you may write to them at the FSA Consumer Help Line, 25 The North Colonnade , Canary Wharf, London, E14 5HS.

3. The FSA subject our books and records to regular checks and investigations as a matter of course. We also make regular submissions of our solvency for the FSA's approval, together with regular financial statements and declarations of relevant information.

4. All client money is held in Trust accounts at Lloyds Bank Plc or with other similar institutions. Our regulators, the FSA require us to ensure our clients money is held in trust so that any creditors of Hargreaves Lansdown would have no legal right to any funds held in trust. Client accounts are therefore ultimately held for your benefit as a private investor. This means we are not able to use money in trust accounts to cover any of Hargreaves Lansdown's obligations.

5. If for practical reasons we have to hold title of stock on your behalf, this will be done by Hargreaves Lansdown Nominees Limited, a third party non-trading company. All your assets are held in an account designated with your name. Hargreaves Lansdown accept full liability for any default by our nominee company.

6. Investors may be covered by the provisions of the Financial Services Compensation Scheme, if Hargreaves Lansdown ceases trading. It can award up to £48,000 in compensation to any one investor where it is decided by the scheme operators that an investment business is in default and is unable to satisfy any claims against it. Full details of the Financial Services Compensation Scheme detailing the restrictions and financial limits that apply are available on request from ourselves or direct from the Financial Services Compensation Scheme. Their address is 7th floor Lloyds Chambers, Portsoken Street, London, E1 8BN. Telephone: 020 7892 7300

7. Hargreaves Lansdown Asset Management Limited is a wholly owned subsidiary of Hargreaves Lansdown Plc and consequently is regulated by the Companies Act, which includes a requirement to have its books and records subject to an annual audit by independent accountants, who in our case are in the international firm of Ernst & Young."

8. Hargreaves Lansdown are also registered with the Inland Revenue to enable us to act as a manager of Personal Equity Plans (PEPs) and Individual Savings Accounts (ISAs). Accordingly, our procedures for operating PEPs and ISAs are also independently assessed by the Inland Revenue."

whiteflag_3

Personally, I rate Norwich Union on service. However, i think I am the only IFA that does.

I think you right there ! Your the first I know that doesnt think their service is dire!

back to thread - Ive used fundsnetwork since they launched and have never had any problems

Fry_2

Thank you to all for your thoughts. I will certainly look into ETFs as my share dealing service have this facility.

Now is just choosing the best moment to invest the lump sum......