Stock and shares ISA

hebron

Hello,
I was thinking of dipping my toe into a stock and shares ISA. I have enough money in cash ISAs and fixed rate bonds now, so I would like to start using my ISA allowance for stock and shares.
I have heard Banks and Building societies are not the best option and
I have heard mixed reviews about independent financial advisers, and I don't want to be pushed into investing more than I want to.
The more I look up the more confused I get. I know the final decision will be mine but I would be grateful if you can give me some pointers and recommendations so I can get the feel of what I should be looking at.
I have about 14 years to I retire and this is meant to be towards that goal. I am looking to invest about £3000 per year in lump sums, although I would consider monthly payments.
Are you able to withdraw from these funds at any time? I can see that I would need to but you never can tell, as ill heath can hit you at any time; or some other thing. I can't see that I will need to though.
So, where do I start to look please, and what companies or should I go to an Financial adviser.

Thanks very much.

dunstonh

I have heard mixed reviews about independent financial advisers

Strange about that considering they have the lowest complaints of all distribution channels and recent articles have suggested that IFAs are one of the few financial jobs that have improved their reputations over the last few years. Remember that despite IFAs handling the majority of transactions, most people have never used an IFA. Research has shown that over half those using tied agents think they are seeing an IFA. Many dont even know the difference between a tied agent/sales rep and an IFA. Others only have experience from 20 years ago (or thereabouts) and its a different world today.

Of course, no occupation can have perfection with anyone. But statistically, its unlikely you would find a bad one.

The more I look up the more confused I get. I know the final decision will be mine but I would be grateful if you can give me some pointers and recommendations so I can get the feel of what I should be looking at.

There are about 50,000 investment options open to you. You will need to narrow down more than you are before suggestions can be made.

I have about 14 years to I retire and this is meant to be towards that goal. I am looking to invest about £3000 per year in lump sums, although I would consider monthly payments.

With the amount you are looking at many IFAs will not be interested as the workload involved for the level of remuneration is not great. However, smaller local IFA firms that rely on reputation and connections with friends and family would be more likely to consider it.

Are you able to withdraw from these funds at any time?

depends on the investments you buy within the ISA. Some will be able to be sold quickly. Others may not be so liquid or have guarantees that could be lost on early surrender. However, if you want liquidity, then that can be achieved easily by avoiding investments that tie you in or could have potential delays.

So, where do I start to look please, and what companies or should I go to an Financial adviser.

If you DIY it will be cheaper than using an IFA. Its the same as any job, if you employ someone to do it, then it will be more expensive than DIY. However, also like any job, if you DIY and you dont know what you are doing it could cost you more in the long run.

So, you need to decide if you are up to doing the research and understanding the investments, risk and reward potential going forward etc. If you are then DIY should be fine. If not, then use an IFA. As mentioned above, stick to a smaller local firm.

hebron

Are you saying £3000 per year in a stock and shares ISA is not worth it? I thought you could only put £5100 in an over 50s stock and shares ISA anyway in any one year?
It says you can invest this amount each year into an ISAs so where is it best to start looking: banks, building societies or online companies?
I don't mind doing my own research and I will, but I'm a bit lost as to where to start as I've never had anything to do with this type of investment before. I thouht any business to IFA would be welcome but obviously this may not be the case if as a starter I'm considered small fry.
At the moment I will try to find out as much as posible but if I am still confused I will have to go for advice.

Thanks for your help.

Mikeyorks

Your ISA allowance from April 2010 is £10200 .... you can put all of that in an S&S ISA (if you don't contribute also to a cash ISA) :-

I have enough money in cash ISAs and fixed rate bonds now, so I would like to start using my ISA allowance for stock and shares

.... if you're 50 or more your allowance this year (from 6th Oct) is increased from £7200 to £10200. So you can (have) put up to £5100 into a cash ISA and the balance into an S&S ISA.

You can also transfer any cash ISA you hold into S&S ISAs .... but due consideration before you do that, as you can't reverse it.

Mikeyorks

Have a look at this tool from Fidelity to give you an idea of options / risk levels :-

https://www.fidelity.co.uk/investor/guidance-planning/plan-portfolio/myplan-portfolio-quickstart.page? (kill the vocals once you get to the Results!)

But if you're going to DIY purchase individual funds - then Hargreaves Lansdowne is an excellent place to start :-

https://www.h-l.co.uk/

........ they discount most or all of the initial fees and also give further research. But be a bit wary of their recommendations for Funds (such as the Mark Dampier list) .. not always the best?

hebron

Thank you, I will take your advice and look closely at those links.

dunstonh

I thouht any business to IFA would be welcome but obviously this may not be the case if as a starter I'm considered small fry.

A small local firm that has advisers that keep their own remuneration may look at it but even then they are looking at £150 for about 5 hours work. If you look at an employed IFA or one attached to a firm who perhaps only gets 20% of the remuneration then its £30 for them. Its those that wont be interested. Also, those that deal with higher net worth clients will have a pricing structure that effectively is priced to put off small investors.

Ian_W

hebron wrote: »

I don't mind doing my own research and I will, but I'm a bit lost as to where to start as I've never had anything to do with this type of investment before.

INCADEMY has a series of tutorials on the basics of investing which will help get you started. Worth bookmarking and going back to read through each module several times.

With £3K pa as your stater investment you will get a more diversified approach by using collective investment funds (OEIC, Unit or Investment Trusts) rather than individual shares. You can also get funds that invest in Commodites, Corporate or Government Bonds, Commercial Property and multi-asset type funds where the manager decides the split between various assets.

TRUSTNET and CITYWIRE are good places to check out funds for aims, composition, geographic spread and past performance and both sites rate managers in comparison to their peers.

Whether you invest as a lump sum or monthly has pros and cons for either. If markets continue to rise a lump sum is better, if markets fall back monthly wins -but you won't know until afterwards which was the best! Always remember investing is for the medium to long term and falls (some quite dramatic) are a natural part of investing.

kirant56

Ok guys, Im really new to ISAs...I just have one basic question.....

If I have a cash ISA with Abbey...can I apply for a stocks and shares ISA with any other bank or institution such as a discount broker?

Thanks for your help.

sabretoothtigger

I noticed moneyam were offering a stocks ISA with no charge and only £8 per buy which seems pretty good to me


Does stamp duty still apply, I would guess so

kirant56

scrooge_mcduck wrote: »

Yes, this shouldnt be a problem. For the current year you can invest a total of £7200 of which up to £3600 can be invested in cash, the remainder in stocks & shares, and these dont need to be with the same provider. This will rise to £10,200 and £5100 respectively from April 2010 (assuming you are not over 50 in which case the new allowances apply now). You can also if you wish transfer previous years cash ISA's into stocks & shares ISA's, and it will not affect your current years allowance. In this case your chosen new provider will provide the appropriate transfer forms.

Mr McDuck, Thank you very much for the advice! :-)