S&S ISA: Hargreaves Landsdown vs Fidelity?

Hatone

I'm looking to open a S & S ISA and invest no more than £5k.

I've already chosen five funds.

I've been looking into H.Landsdown and Fidelity. Fidelity looks an attractive option, with no or very little initial ISA charges.

However, many say H.Landsdown is better for DIY investing and more variety to choose from - but attracts high initial charges (of 4-5%) with a 0.5% loyalty return each year. You'd have to stay with them for at least ten or more years before the ISA initial charge is paid off.

I'm undecided which of the two to invest in. Does anyone have any other recommendations or experiences with either of the two?

Thanks

Lokolo

HL have low charges?

You have to do: Initial Cost - Initial Saving to find the actual buying cost...

But it does depends on the funds you pick!

Example:
http://www.h-l.co.uk/funds/security_details/sedol/3141263

0% initial charge

Hatone

Yeah. Two of the funds I've chosen has an initial cost of 5% and initial saving 0.5%! 4.5% buying cost. Whereas Fidelity has a lower charge, particularly on these two funds (only 2%).

Tough decisions....

Lokolo

Yep. If its a one off buy then you may as well go for the cheaper option!

Lansdowne

Chartwell has a list of ISA discounts which is easy to understand, also giving the on-going annual commission rebates.

They are based on Cofunds platform.

David_Aston

In that Fidelity produced for my wife and I our one good investment success, (European Values, as it happens), I would go for them. To be fair HL manages one or too funds for us with no more or less success than the funds themselves can manage. HL do however, send us promotional material every quarter, for which they charge us a fiver. This irritates me, but I accept it would be up to me to comment on it to them.

Hatone

Thanks for the replies so far.

I've just read HL's small print

''For arranging this investment HL is entitled to receive renewal commission of up 1.5% per year'' Isn't that on top of the annual fund fee?

''HL is also entitled to receive initial commission of up to 4%'' Sounds high to me.

There seems to be a fair amount of managerial charges on top of fund charges.

Lansdowne

I would expect that their commission is part of the initial charge not on top. Same with the annual fee. With H-L, when you look up a fund's "Discounts,savings & charges" you get the full price and the discount. With Chartwell's list of funds, you get told how much they rebate to you from the annual commission. This is usually half the annual commission so half of a typical 0.50% is 0.25%.

The reason for what you have quoted in bold is that they are required by the regulator to disclose their commission earnings.

David_Aston

Hatone, you have read HL's small print! Wow, what dedication. How many hours did that take?

dunstonh

HLs DIY fund supermarket is cheap but their advice arm is expensive. Especially if you are looking at the discretionary investment details (which I think you are). You shouldnt mix up Discretionary management with funds and fund supermarkets.

Hatone

dunstonh wrote: »

HLs DIY fund supermarket is cheap but their advice arm is expensive. Especially if you are looking at the discretionary investment details (which I think you are). You shouldnt mix up Discretionary management with funds and fund supermarkets.

Not always. I still think looking at the discretionary investment detail is a deciding factor where to invest your money.

Dave - I read the small print simply because, as some say, there's always a catch somewhere.....

HL look good on the outside, but if you analyse their operational fees, they are quite expensive by typical investment standards.