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Who to invest with?

Hi,

I hope some of the investors here can help me out as I try to make a start in investing.

I've managed to get some decent savings (in cash isas over the years) to cover unforseens and have dipped my toe into the water with a UK index tracker in an ISA wrapper (a £500 investment with L&G) during the last tax year. I now want to invest my money this year in S&S ISAs, but I'm not sure which 'provider' I should use.

As I'm still getting my head around trackers, managed funds, etfs, individual shares, I feel the need to go with a provider (is that the right word? :o) that will give me enough scope to invest in the vehicles I want, rather than being restricted to only funds or shares for example. I am likely to be investing around the £300 mark per month, and may start with a lumpsum of £1000-£2000/larger early monthly investments. I will probably start with a simple UK index tracker whilst I learn more about what I want to do.

The two providers that seem to offer the greatest flexibility are selftrade and iii. Both seem to allow access to a lot of funds/trackers as well as shares and etfs. Selftrade's annual charge of £25 seems reasonable, although iii charge no flat rate. Both have similar dealing charges, although iii have a portfolio builder which might be useful if I want to invest in individual shares. I don't know which provider is generally cheaper for funds, but I would imagine that this varies between funds (is that right?)

The main difference between the two providers appears to be the availability of a portfolio builder at iii, which seems to be the only feasible way of investing in shares as the amounts I will invest each month are so small and a £12.50 hit for each share would be too great. Am I missing something here?

Also, is there some fundamental difference between the two providers? Do they offer any support which would be useful to a beginner such as myself? Are they reliable? Anything else? :o

Sorry that this is such a rambling post, but I would like to get myself started with investing, and don't want to make an initial mistake of jumping in with one provider.

Thanks in advance for any helpful advice.

snarff.

Comments

  • cheerfulcat
    cheerfulcat Posts: 3,374 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Hi, there,
    The main difference between the two providers appears to be the availability of a portfolio builder at iii, which seems to be the only feasible way of investing in shares as the amounts I will invest each month are so small and a £12.50 hit for each share would be too great. Am I missing something here?
    I would agree that for small amounts the portfolio builder is a more attractive service. I prefer Selftrade's website and layout and have found their customer service slightly more professional than iii's but don't think there's that much to choose between them otherwise.

    I'd expect the actual discounts on funds to be similar but you might find that they offer discounts on different funds IYSWIM.
    Sorry that this is such a rambling post, but I would like to get myself started with investing, and don't want to make an initial mistake of jumping in with one provider.
    I wouldn't worry too much about " jumping in ". Chances are that somewhere along the line, whichever broker you use, you'll find that they don't fully meet your needs but by that time you'll know better what your requirements are, and it's easy enough to change brokers.
  • snarffie
    snarffie Posts: 450 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Thanks cheerfulcat,

    Selftrade are the only one of the two brokers who I can get any feedback on, and their service seems to be decent. I can't get any feedback on iii except that the iii interface is a bit trickier to use (does this mean iii is not a good broker for a beginner?) Does anybody else have any feedback on iii and its suitability for a beginner?

    Also, it occurs to me that as I may want to invest in an ETF/ETC, they attract the same charges as share dealing, so each trade will cost me another £2.50 with selftrade on top of the annual charge of £25. Just five trades in and out during the year would cost me £50 more with selftrade (including fee), which equates to an immediate 1.5% penalty before I even start (based on £3600 of investments). I assume that each boker offers the same range of these types of funds..is that right?

    Am I being too picky with these charges?

    Thanks

    snarff
  • Hi guys.

    Was wondering which of these eTRADE, Scottrade, Selftrade, iii has the best choices to invest in index etf in US, China, Brazil?
  • cheerfulcat
    cheerfulcat Posts: 3,374 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Hi, snarff,
    Selftrade are the only one of the two brokers who I can get any feedback on, and their service seems to be decent. I can't get any feedback on iii except that the iii interface is a bit trickier to use (does this mean iii is not a good broker for a beginner?) Does anybody else have any feedback on iii and its suitability for a beginner?
    You could have a look at TMF's Brokers board, where you are more likely to get a wider variety of views on many different brokers than on MSE.

    I would say that the iii interface could be rather offputting to a beginner but could well be worth persevering with given the difference in charges. Alliance Trust also offer a batched dealing service, for £2.50/purchase, with a rather easier to use system.
    Also, it occurs to me that as I may want to invest in an ETF/ETC, they attract the same charges as share dealing, so each trade will cost me another £2.50 with selftrade on top of the annual charge of £25.
    Yes, only it's £12.50, so even more of a bite taken out of your investment.
    I assume that each boker offers the same range of these types of funds..is that right?
    Not necessarily - best to check that out first, to make sure that your chosen broker offers what you want. In general, with brokers as with the rest of life, the cheaper the service, the fewer the options.
    Am I being too picky with these charges?
    Not at all! Costs are important.
  • ozzage
    ozzage Posts: 518 Forumite
    Part of the Furniture Combo Breaker
    I haven't looked at iii's user interface but you can also look at Halifax Sharebuilder which has the same £1.50 per buy "builder" offering - it's the same platform as with iii.
  • snarffie
    snarffie Posts: 450 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    ozzage wrote: »
    I haven't looked at iii's user interface but you can also look at Halifax Sharebuilder which has the same £1.50 per buy "builder" offering - it's the same platform as with iii.

    Sharebuilder doesn't seem to allow investment in funds, which is an option I'd like to have.
  • snarffie
    snarffie Posts: 450 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    edited 23 April 2009 am30 8:36AM
    Hi, snarff,

    You could have a look at TMF's Brokers board, where you are more likely to get a wider variety of views on many different brokers than on MSE.

    I've lurked on there a bit, but it's a bit slow. I think I need to post there and ask the question like you say.
    Not necessarily - best to check that out first, to make sure that your chosen broker offers what you want. In general, with brokers as with the rest of life, the cheaper the service, the fewer the options.

    Not at all! Costs are important.

    Struggling to work out how to find which investments are actually available in iii's isa. Any ideas? Is it just a case of any investments which they offer will also be available in their isa (except for those which are prohibited by regulations).
  • cheerfulcat
    cheerfulcat Posts: 3,374 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    edited 23 April 2009 am30 11:35AM
    Struggling to work out how to find which investments are actually available in iii's isa. Any ideas? Is it just a case of any investments which they offer will also be available in their isa (except for those which are prohibited by regulations).
    That's what I would assume.In the iii FAQs it states that " You can trade shares on the US and European makets as well as eligible UK shares within your ISA or SIPP".
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