Sterling Stocks & Shares ISA

Lee_In_Northumberland

Hi Guys

I am working with an IFA who has reccd Sterling as a framework for multiple fund investments. On the face of it, the IFA has helped me a lot, and the overall upfront charge of approx 4.7%, seemed reasonable for his efforts (I am only investing a small amount). However that said I did some research on this web-site, and seems that Sterling dont have a good reputation and the stated charges are high. Can I please have your thoughts, Im using this for child investment, and dont want to make the wrong decision.

Many thanks in advance - Lee

jem16

It is dearer than normal and Sterling is a smaller funds supermarket.

Cofunds and Fidelity (which IFAs tend to use) have a 3% commission charge and have more funds to choose from.

It very much depends on the amount involved if you think you have a good deal or not. The 4.7% is not excessive but it is more than necessary.

Could you not ask the IFA why Sterling as opposed to Cofunds/Fidelity?

Lee_In_Northumberland

Many thanks for your swift response, it is very much appreciated. The IFA did suggest that Sterling allowed me to spread over 13 funds, which might not be as easy with another provider ie. My initial contribution could be too small for the amount of funds. FYI, it is £1000 then 150 per month ; with another 2k expected in a month or two ; I will surely ask the question again though.

Lee

jem16

That might be the difference - some funds supermarkets will only allow a minimum of £50 per fund so with £150pm that would only be 3 funds.

I don't know how Sterling work so I have no idea whether 13 funds would be feasible or not.

dunstonh

Sterling are not on par with Fidelity, Cofunds or Selestia as far as fund range and charges go. However, they do allow greater diversification with smaller amounts so the reason sound justifiable.

Also, Sterling have a flexible charging structure. It can be abused by the bad but the good can use it to be very similar to the others. Typical maximum commission is 3%. Typical average is 1.8%. Larger amounts can usually dictate larger discounts. Smaller amounts will find it harder to get discounts.

Lee_In_Northumberland

Great that helps, many thanks.

Forgive my naivity, but Im assuming this 4.7% charge (ish), is levied against all new money into the investment? My IFA did highlight what he gets from the initial deposit (less than £70), and it sounded like a very small amount annually (1/2 percent) ; Im still awaiting my confirmation paperwork, which I will review thoroughly, but I think I will get more comfort from paying a little more commission to enable a wider spread of funds. Any information / ideas welcome.

Lee

dunstonh

0.5% p.a. is the typical trail commission. Fixed interest funds, trackers and property funds can pay less. Some pay nothing at all but the vast majority pay 0.5%pa.

That initial charge probably includes the adviser cut which is normally around 3% (although Sterling do allow for more at your expense).

Lee_In_Northumberland

So to be clear (sorry) - Does everything I put into the sterling ISA actually have 4.7% charge applied. I am putting a combi of direct debit + small lump sum?

Also, of the on-going charge (annual charge) is this usually less than the 4.7%

Sorry for the questions.

Lee

dunstonh

So to be clear (sorry) - Does everything I put into the sterling ISA actually have 4.7% charge applied. I am putting a combi of direct debit + small lump sum?

Depends on the adviser and what he has chosen but probably it is applied to every penny.

jem16

Lee_In_Northumberland wrote: »

Also, of the on-going charge (annual charge) is this usually less than the 4.7%

It would normally be 1.5% (which is the normal for funds) with 0.5% of that going to your adviser as trail(annual) commission.

Lee_In_Northumberland

Thanks Both, really helpful - Much appreciated

Lee