S&S ISA - New Investor Advice

moscow6

Hello,

Could do with a little bit of advice please.

I'm new to investing and want to start of with small monthly payments of say £100, until I get a better understanding of the differnet systems.

I'm looking for a suitable self select ISA that takes monthly payments, is very low cost and ideally refunds on trail commission. I'm not interested in share dealing, ETFs etc (just yet), just a steady iinvestment in OEICs / mutual funds.

I've been looking at SIPPDEAL and Cavendish (not sure if Cavendish accept monthly investments), Ive read through the S&S ISA thread but I'm still at a loss.

I'd appreciate it if anyone could give me advice or pointers?


Thanks

Mikeyorks

Hargreaves Lansdown do broadly what you want :

http://www.hl.co.uk/investment-services/isa/regular-savings-in-an-isa

- there's also a free guide to Regular Savings if you pick up the top line / centre from here :

http://www.hl.co.uk/news

.... not sure if it gives more than the initial link, however

jimjames

HL would be a good starter for small amounts as long as you don't choose any tracker funds as they have monthly fees that will wipe out any profits.

Cavendish use the Cofunds or Fundsnetwork platforms which both accept monthly savings so if you want to use trackers they may be a better bet although you do need to pay the one off Cavendish fee of £25. Once your portfolio is bigger then this will be offset by the higher amounts of commission that are refunded.

jem16

jimjames wrote: »

Cavendish use the Cofunds or Fundsnetwork platforms which both accept monthly savings so if you want to use trackers they may be a better bet although you do need to pay the one off Cavendish fee of £25. Once your portfolio is bigger then this will be offset by the higher amounts of commission that are refunded.

Cavendish are waiving the £25 fee if you use The Fidelity Fundsnetwork.

MrMalkin

jimjames wrote: »

HL would be a good starter for small amounts as long as you don't choose any tracker funds as they have monthly fees that will wipe out any profits.

They offer some BlackRock tracker funds with no monthly fees, but they have higher management charges than most other trackers at about 0.5%. They make sense over other trackers, which are cheaper but have the platform charge, on HL for amounts of about £6,000 or less per fund (I think, can't do the sums in my head).

pqrdef

I suppose we should assume that when trail commissions are abolished, HL will charge monthly platform fees per-fund for all funds. And they charge £30 per fund for transferring out.

Any clues on what charging models other platforms will adopt?

dunstonh

MrMalkin wrote: »

They offer some BlackRock tracker funds with no monthly fees, but they have higher management charges than most other trackers at about 0.5%. They make sense over other trackers, which are cheaper but have the platform charge, on HL for amounts of about £6,000 or less per fund (I think, can't do the sums in my head).

That is because they only offer the commission paying ones. Not the non commission versions which are 0.2x%.

The different is going to the platform as a hidden commission.

MrMalkin

dunstonh wrote: »

That is because they only offer the commission paying ones. Not the non commission versions which are 0.2x%.

Yep, but for small amounts like the OP is talking about it's more cost effective to take the higher AMC than it is to pay HL's flat rate for the HSBC or Vanguard funds. There is a point where your portfolio becomes big enough that the AMC becomes more of a drag, though. Another way to think about it is that £2/m is effectively a 2% initial charge on £100/m in regular investments, which is very high for a tracker.

Correct me if I'm wrong, but I think going HL/BlackRock for small portfolios is the cheapest deal, unless III or SippDeal or someone offer the HSBC trackers for free still?

moscow6

Hello all, thanks for replying.

I've had a browse aroung H&L and although do seem to have an all-singing-all-dancing website, they do seem a little more expensive with the monthly platform charge and especially exit fees.

Yeah I noticed that the £25 fee is being waived if you use The Fidelity Fundsnetwork, so I'll prob be choosing that platform but, still not quite sure whom to choose as the agent.


Think I'm going to look around for one with cheap exit fees just in case I need to switch when the platform unbundling happens.


So your suggesting I go for a tracker? I have to say it does seem incredible that they beat so many of the activley managed funds that I've seen.

What about the ETFs, I know I said I wasn't interested in them just yet but do they availbale as trackers and do they offer any advantages over a normal tracker?

Robert99

Worth just checking what Hargreaves, Fundsnetwork and Cofunds will do if you want to move your money somewhere else later.

You can sell everything and cash transfer your ISA and you don't lose the tax wrapper (or have any other tax implications) but you will have sold all your investments and will have to buy new ones.

However, if you want to move your funds that you have purchased then Fundsnetwork and Cofunds do not support this and Hargreaves charge a lot of money for the privilege.

If you are going to invest for a period of time it maybe worth doing something like an asset allocation tracker fund from TCF Investments on Alliance Trust?