Stocks + Shares ISA's shares + funds?

daezle

Hi, I intend to open a stocks and shares ISA soon and start investing a monthly amount in one or two funds. However when I acquire enough experience I also wish to purchase shares probably infrequently.

Now i'm aware you can only invest in one stocks and shares ISA per year, so will i have to cancel my monthly subs to the fund to invest in new shares?

The problem is investment supermarkets like hargreaves lansdown tend to offer share dealing accounts at high cost, I was simply hoping to maybe purchase once a year or so but still maintain the funds.

Any advice here from people that own both shares and funds? Any help greatly appreciated thanks

dunstonh

Now i'm aware you can only invest in one stocks and shares ISA per year, so will i have to cancel my monthly subs to the fund to invest in new shares?

If you are using a platform then you can invest in funds and shares as you like. If you are using a tied ISA manager (i.e. offer only funds from that fund house) then you will need to either stop the contributions before the end of the tax year or transfer the ISA to a platform).

he problem is investment supermarkets like hargreaves lansdown tend to offer share dealing accounts at high cost, I was simply hoping to maybe purchase once a year or so but still maintain the funds.

HL is a bundled platform that receives hidden commission from fund houses to pay for it (along with keeping some or all of the IFA commission). If you want to access non commission paying assets (such as ITs, ETFs, shares, institutional funds etc) as well as retail funds then you need to look to an unbundled platform instead.

HL is effectively old model now.

Aegis

dunstonh wrote: »

HL is effectively old model now.

Out of interest (and sorry for hijacking this thread) have you discovered any decent unbundled execution-only platforms? The vast majority seem to be only available via an IFA, and the only explicitly charged one I've found that I could access now is Alliance Trust, whose pricing model simply doesn't work for my investment strategy (not to mention the issues I had dealing with them over the phone as a paraplanner!).

daezle

dunstonh wrote: »

If you are using a platform then you can invest in funds and shares as you like. If you are using a tied ISA manager (i.e. offer only funds from that fund house) then you will need to either stop the contributions before the end of the tax year or transfer the ISA to a platform).

HL is effectively old model now.

Sorry if i seem a bit naive, but i was under the assumption these providers such as fidelity etc were a cheaper alternative because the entry costs are discounted?

If HL is effectively old model what would you suggest?

My question is to ensure i dont pay capital gains to hold the funds in an ISA with a firm like Fidelity and buy shares through say Halifax for example or is this a bad strategy?

dunstonh

Out of interest (and sorry for hijacking this thread) have you discovered any decent unbundled execution-only platforms?

Not been looking to be honest. There are bound to be others here who have though.

I think the unbundled platform is the future but the lack of volume they have compared to bundled is making them a quality option rather than a cheap option. That has been improving consistently over the last few years but I still think the topple point has yet to be reached that makes them the maintream option. Until then, the likes of HL will remain the main option.

The unbundled platforms do seem to be bringing in the institutional funds more now. That could be the swing point as they are typically around 0.3% p.a. cheaper than the retail funds.

Sorry if i seem a bit naive, but i was under the assumption these providers such as fidelity etc were a cheaper alternative because the entry costs are discounted?

They discount on the initial charges but keep most or all of the annual commission. As IFAs increasingly move to fees, the initial cost is less relevant. e.g. a fee based IFA may have a charge that only equates to 0.5% of the initial amount. So, if you the HL SIPP that keeps the 0.5% trail commission and have an IFA that provides servicing for that 0.5%, then the only difference is that initial cost.

If HL is effectively old model what would you suggest?

Its old model as it is paid for by hidden commissions and therefore only offers those investments. Its still cost effective for many DIY investors who want retail funds but not ideal for those that want all investments. Fidelity is getting long in the tooth. An IFA can now offer cheaper execution only options with Fidelity than going direct to them (as IFAs can choose to rebate some/all of the trail commission) but you still have the hidden commissions issue which means it is only fund based.

We are at a transitional point. The FSA paper due next month will decide a lot of what happens next. If the bundled platforms are banned then it resolves a lot of the uncertainty as they will all go down the unbundled route.

Middle_Sister

I set up Halifax sharedealing as I got shares through my company. I was recommended to sell them and buy back and put them in a stocks and shares ISA (which I did). I now have charges of about £50 every 3 months. Is this normal? And - what am I paying for exactly?

Lokolo

Middle_Sister wrote: »

I set up Halifax sharedealing as I got shares through my company. I was recommended to sell them and buy back and put them in a stocks and shares ISA (which I did). I now have charges of about £50 every 3 months. Is this normal? And - what am I paying for exactly?

What provider?

Middle_Sister

I presume Halifax is the provider. Its them that takes the £50 every 3 months. What a dimwit I must be.

Lokolo

Middle_Sister wrote: »

I presume Halifax is the provider. Its them that takes the £50 every 3 months. What a dimwit I must be.

Sorry I should have read your first sentence properly.

How many times have you traded? And how did you do this?

Halifax charge £25 a trade if you do it by telephone.

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Also I know Halifax have charges but they are a maximum of £8.33 a month, which adds up to be around £30 every 3 months, rather than your £50.

Middle_Sister

I dont do any trades. I think the money is because the shares are held in a stocks & shares ISA and this is a fee.

*JS*

Quite a relevant thread for myslef so I thought I'd ask my question here.

I have about £1000 to invest into a S&S ISA, and will have around £2000 further to invest at the end of the year when my work sharesave matures.

I have looked at the HL website and am impressed with the range of funds and discounts. The only thing that is stopping me from opening the ISA are the minimum contributions. On most of the funds I have looked at the minimum lump sum seems to be £1000, however I was looking to spread my investment over 4-5 funds.

Are there alternative providers out there with the range of funds and discounts that HL have but with lower minimums? Or should I jsut invest the £3000 as monthly payments over a period of time as the minimum monthly contributions are a lot lower.