Wrapper confusion - S&S ISA help!

squeekyminos

Having read lots I'm now confused and need help this time, so its time to post!

I've got 3K to put into an S&S ISA, and I'll fill it up £250 a month after that. I want to put it in for the long term but spread the risk. So I'm keen on something global , and I'd consider splitting the initial lump between three different funds with varying levels of risk. I want something thats totally managed, with no involvement from me. I'm stuck on how to select a fund and go about opening the ISA. Questions are:

• I read lots around about funds managed by people like HL, etc ('fund supermarkets'?). Are the products services they offer different from the investment fund options the high street banks offer and how?
• Should I be paying charges or a fee for entering or maintaining this kind of account? Where can I find the best value options?
• I'm in it for the long term but I dont want to be penalised if for some reason I need to access this money. Is that likley / possible?
• If I want to split the lump accross funds (higher risk, lower risk), do those have to be with the same supplier?
• Am i looking at just finding the most attractive option from a high street bank and investing there?? It would seem the easiest and possibly best option in my situation, but I don't want to get fleeced?

I'm trying to keep this relatively simple for myself but I'm struggling!!n Savvy people - can you help?

pressuredrop_2

It's fairly simple.

Either:

1. Pop down to your local high street bank and be sold an expensive, poor quality product by a salesperson who is only interested in commission and doesn't care about your financial present or future.

2. Spend some time at Trustnet, Citywire, etc. learning about investing, open your account at the discount broker, and choose your investments.

dunstonh

I read lots around about funds managed by people like HL, etc ('fund supermarkets'?). Are the products services they offer different from the investment fund options the high street banks offer and how?

bank investment funds are generally low quality and expensive. Platforms offer a more whole of market spread (including some or all the funds available at a bank).

Should I be paying charges or a fee for entering or maintaining this kind of account? Where can I find the best value options?

£3000 isnt much and it would be a waste of time entering a service agreement for that level of money. You are better off DIY or using a self balancing portfolio fund (like a fund of funds).

I'm in it for the long term but I dont want to be penalised if for some reason I need to access this money. Is that likley / possible?

as long as you use open ended investments and not fixed term then you should be fine.

If I want to split the lump accross funds (higher risk, lower risk), do those have to be with the same supplier?

They have to be with the same ISA manager. If you pick a tied ISA manager you will be limited to their own in house offerings. If you pick a platform you will be limited to the funds offered by the platform (typically 1000+ funds)

Am i looking at just finding the most attractive option from a high street bank and investing there?? It would seem the easiest and possibly best option in my situation, but I don't want to get fleeced?

That is pretty much the worst option when it comes to investing. The best options are either to use an IFA or DIY. Your small amount would be better off DIY to be honest. Although of course with DIY comes the risk that if you dont know what you are doing you could make a pigs ear of it and that could cost you more than using an IFA in the first place. However, that is no different to anything else anyone does DIY with.

squeekyminos

Thanks pressure and dunstane.

I get the message - not a high street bank product! OK, I won't do it.

So I'm off to trustnet, read some info there, and more questions pop out....

I'm going to invest this money with a company that provides investment services, but its not a bank - so is the investment protected if something happens to the company? Like under the FSA protection scheme or whatever?

Do all funds pay dividends, or just income funds? If they pay dividends, would those go to a linked account or back inton the fund?

I can make investemnts like this irrespective of my ISA status. So if I want to ensure that it does become part of my ISA 'wrapper', how do I ensure that happens? Will there be an option to choose which will take care of that, or do I have to independently go about making this the case?

If I wanted a product from a bank, I go to the bank, grab the nearest staff member in there and say 'I want to open an account'. So if I want to invest in a fund I should.....? (Go to trustnet and read some more??)

I appreciate the advice that the size of the investment means I should probably self manage. For exactly the reason you raise dunstane, I'd rather put this in something that I don't personally need to make too many decisions about, other than the initial choice of which fund to invest in.

What are the best known platforms where I can look at whats on offer?

Any more comments, please do, and thanks for the tips so far....:T

Lokolo

To invest by youself, you have already stated, you need a fund supermarket. Most of us on here recommend HL for their cheapness.

We research funds on places such as trustnet, and morningstar. Once we have chosen, we buy through HL. You can choose easier using a fund filter:

e.g. http://www.morningstar.co.uk/uk/fundscreener/default.aspx?lang=en-GB

With majority of funds there are 2 types: Acc and Inc. Acc = Accumulation Inc = income.

With Inc, the dividends go into your shares account, which can then be spent buying whatever you want, or withdrawing the money to a nominated bank account and spending on shoes.

squeekyminos

Thats great Lokolo, thanks.

The outstanding piece of this then is - is money invested in funds (for example through a fund supermarket like HL), covered by the UK FSCS - and would it matter on the tyep of investment you were making what was covered and what was not?:think: