Halixfax sharebuilder vs discount brokers for investing?

silentjay_2

Bit about me, im in my 20s, self employed and after some reasearch it seems a stocks and shares ISA is the best way about going about investing for my retirement compared to a pension. I have no investments, pensions or savings at the moment.

I recently signed up for a hargreaves and lansdown self select ISA under the impression I could put £100 away each month and have that automactically invested for me after I've picked a fund or two. However in practice it seems most funds have limits of say £1000 each trade. Which isn't really what I wanted.

I've looked at the halifax sharebuilder and from what I can find it seems much more suitable, invest much smaller amounts and a small charge per trade. Are there any hidden costs however? Them being a bank im quite cautious....Do they refund part of the annual fund management fees like H-L? Would they work out alot more expensive in the long term? etc...should I just stick with H-L and wait till i've saved up large amounts to trade?

Thanks

dunstonh

However in practice it seems most funds have limits of say £1000 each trade. Which isn't really what I wanted.

£100pm is allowed. Its £1000 per single purchase. £100 regular is fine.

've looked at the halifax sharebuilder and from what I can find it seems much more suitable, invest much smaller amounts and a small charge per trade.

Although it is typically for direct investments and not funds. HL is geared and priced towards funds.

Them being a bank im quite cautious

Its the one product Halifax have that is actually quite good.

Do they refund part of the annual fund management fees like H-L?

No. The product is not designed for the purchase of funds.

silentjay_2

Thanks dunstonh you are completly right regarding £100pm being fine....I finally found the section on H-L website where you can set this up.

Also thank you for the info on sharebuilder, as I definitely don't have the knowledge to start picking individual shares at this moment in time I think H-L and index tracker funds is the right course of action for the time being.

dunstonh

I think H-L and index tracker funds is the right course of action for the time being.

Be wary using index trackers with HL. They actually add charges on most of them making them more expensive (which is not the point of using a discount service)

silentjay_2

dunstonh wrote: »

Be wary using index trackers with HL. They actually add charges on most of them making them more expensive (which is not the point of using a discount service)

Are these charges shown in the initial & annual charges or are they hidden somewhere?

I've just set it up to invest £50p/m in fidelity monebuilder uk index all share and from what I can gather it has a 0.10% annual charge + (0.5% + VAT)... is the 0.5% + VAT the charges which they add on? are there cheaper places to invest in index trackers?

dunstonh

I've just set it up to invest £50p/m in fidelity monebuilder uk index all share and from what I can gather it has a 0.10% annual charge + (0.5% + VAT)... is the 0.5% + VAT the charges which they add on? are there cheaper places to invest in index trackers?

The 0.5% plus VAT is their extra charge. That actually makes them more expensive than an IFA doing it under advice.

If you want the Fidelity fund have you tried looking at Fidelity themeselves?

silentjay_2

Wow I didn't realise they would be that uncompetitive...I've seen them recommended in a few different places.

I haven't looked at Fidelity yet but I shall. Am I right in assuming I can only have my stocks and shares ISA with one provider....i.e. halixfax, fidelity, h-l....I can't mix and match what products are inside its to get the best offerings from each?

Apologies if i'm not making any sense...I've ordered 2 books on uk investing so hopefully things will get more clearer for me!

dunstonh

You cant mix and match in the same tax year. However, Fidelity has a fund supermarket. Its not as cheap on managed funds but is cheaper on trackers than HL.

fg22

HL offers HSBC trackers which have TER's as low or lower than those available from the Fidelity supermarket eg FTSE All-share has the same TER of 0.27%.
If you're likely to want more than just a UK tracker I'd consider sticking with HL (but not using the fidelity tracker funds).

cashbackproblems

i find www.iii.co.uk the cheapest and easies to use online broker, and until next summer any trades you set in advance there is NO buying charge, just the small stamp duty. They have great CS and had no problems in over a yr!

silentjay_2

Thanks for the heads up on HSBC tracker fg22 ill check it out...although I have read somewhere that it doesn't do a very good job of tracking the index?

cashbackproblems I took alook at iii.co.uk, they look pretty good, i checked out their offering on the fidelity moneybuilder uk index and they have no charges, so I'd only lose the 0.1% management fee, atleast until next summer. Which is better than H-L.

Now correct me if I'm wrong but if I'm investing say £100 every month, and iii.co.uk charge £1.50 per trade until next summer, wouldn't this mean I'd end up paying 1.5% anyway every month? And so therefore more expensive than H-L for what I want to do...which is basically put away £100 a month and have it automatically invested for me?