iii or FD Waterhouse?

EagerLearner

Hi Cheerfulcat - thanks - just to clarify I am not advising on any financial aspects, he just wants me to research the 2 companies he has decided on. I suggested that I research more for him, as I am a suspicious MSER's at all times!

I will read up on HL and mention it to him, see what he thinks. The fees will def be a consideration as I know he has paid more than intended for the company he is with now and desperately wants to leave them.

Thanks again and if you have any final comments please pass them on here as I won't be e-mailing him until the weekend (the newly discovered joys of being self-employed!)

cheerfulcat

Ah, OK. Well in that case I would second Ed's suggestion of Selftrade + ETFs. Alternatively he could look at a global investment trust; one like RIT Capital which covers most asset classes and geographical areas might suit. They may be held in a Selftrade/HL ISA. There is also Alliance Trust, which comes with its own ISA wrapper ( you can put other things in there as well ). You can read more about investment trusts here.

I agree with austinrodeo about iii, btw. They are dreadful - wouldn't use them again if they were the last brokers on Earth.

mutley74

I would be interested in know more about the level of customer service from Hoodless Brennan and etrade who charge less than selftrade’s dealing fees…

cheerfulcat

atpug, I personally wouldn't use Hoodless Brennan because they have been found guilty of some fairly shoddy practices ( LINK ). I prefer my brokers to be a little more ethical...in any case, Selftrade are the only ones AFAIK who don't charge dealing commission when buying ETFs within an ISA.

mutley74

cheerfulcat wrote: »

atpug, I personally wouldn't use Hoodless Brennan because they have been found guilty of some fairly shoddy practices ( LINK ). I prefer my brokers to be a little more ethical...in any case, Selftrade are the only ones AFAIK who don't charge dealing commission when buying ETFs within an ISA.

Thanks for quick reply. Interesting link, will make me think again when I make my final decision for a self select share isa. I want to deal in shares only not ETFs. I use self trade regularly in other family accounts but really want an account with lower dealing charges I think self trade is a bit expensive (12.50) compared to many other brokers.

My other choice was probably etrade for now, except for US stocks you need to open a USA account.

munk

austinrodeo wrote: »

I'd advise against iii. They were fine (although not the cheapest) until they changed their platform to Halifax's share dealing site since then buying and selling funds on line has been "broken".

Has this situation changed at all? Is the fund trading side of Interactive Investor (iii) still 'broken'?

I was considering using iii because of their low minimum per fund initial investment which would allow me to create a more diversified portfolio for an initial £4000 which is otherwise not easy to do with places such as Hargreaves Lansdown (hl) which have a minimum per fund investment of £1000.

From my research so far it appears you pay for this low initial minimum investment per fund via increased initial charges (ICs) - 1% on most funds it seems - and non-rebated annual management charges (AMCs) - the usual 1.0-2.0%pa - which I don't mind so much if it allows me to diversify my portfolio more.

Some issues I would be very grateful if anyone could clear up:

Do iii charge 1% on reinvestment of dividend payments on funds?
I suspect it might just be share dealing they levy this charge on but the ISA charges page doesn't make this clear:

Dividend Reinvestment Charge 1% of the value of the dividend paid (capped at £10)

Do iii charge £10 per fund for exiting out of the fund?
Again this might be confusion brought up by the ISA charges page. To quote:

Transfers Out £10 per stock

The 'stock' reference would imply share trading the charge relates to, but it's on the same page as charges which relate to funds which is confusing.

It strikes me I should be emailing their support about this, which I will do now (edit: I would if I could find the feedback page!). If anyone can just give a yes/no answer to the above I'd be much obliged still.

Many thanks.

cheerfulcat

munk wrote: »

Do iii charge £10 per fund for exiting out of the fund?
Again this might be confusion brought up by the ISA charges page. To quote:

Transfers Out £10 per stock


The 'stock' reference would imply share trading the charge relates to, but it's on the same page as charges which relate to funds which is confusing.

That refers to transfers to accounts with other brokers and yes, stock includes funds so it's £10 per individual share/fund.

jem16

munk wrote: »

I was considering using iii because of their low minimum per fund initial investment which would allow me to create a more diversified portfolio for an initial £4000 which is otherwise not easy to do with places such as Hargreaves Lansdown (hl) which have a minimum per fund investment of £1000.

Have you phoned HL about investing less than £1000 into each fund. I remember reading that some people have phoned and HL have accepted as little as £50 over the phone.

Jake'sGran

Keeping it simple HL offer the best discounts on the initial charge. They also refund a small percentage of the annual charge if you buy funds through their Vantage service. For a good global fund have a look at the intitial charge with HL for M&G Global Basics and the same with iii.

I use HL each year for my equity ISA. You can check your holdings on line and they send comprehensive statements. They also send masses of paper about offers etc but I just put these in my wormery, or at least, the address bit.

munk

@jem16:

Have you phoned HL about investing less than £1000 into each fund. I remember reading that some people have phoned and HL have accepted as little as £50 over the phone.

I'd more or less rejected HL for this investment (starting with 4k and will be topping up to 10k over 6 months, but that's it then for a while). I read in the online application form that the minimum per fund was £1000. I'll definitely ring them now though I think because I'd much rather go with HL than iii for the lower charges and all. Thanks a lot for bringing this up jem16.

Reading some of the recent posts on the iii forum it seems they've gone downhill since they moved over to this new fund trading interface both in terms of the quality of that functionality and in terms of customer service dropping off. I actually rang iii as well a while back and did get the impression the girl on the other end of the phone hadn't a clue about fund investing - she seemed convinced I was trying to set up a share dealing account all the way through and didn't seem to know what an OEIC was either. Not the best of ads for iii's fund service.

Also looking at iii's site it does seem slightly blurred the distinction between fund investing and share trading in a lot of the documentation there. I guess it's because they were originally a share trading site and only added on fund investing at a later date. Perhaps the customer support is still slightly confused about the distinction as well.

@Jake'sGran - yes the low costs with HL are very appealing - although now you mention it can you confirm that there's a £25 exit charge with HL to exit from a fund? This was one thing that made me slightly wary of HL - although the investment will be medium term at least and I don't plan to 'churn' the portfolio if I can help it.

Cheers folks!