Is TD Waterhouse the cheapest way to invest in Vanguard lifestrategy funds for my ISA

bowlhead99

Totton wrote: »

Not sure how you get to pay that much with HL, afaik there is no fee for shares (or IT's) in the trading a/c whilst the ISA fee for those types of holding is capped at £45 per annum.

Ah, it's ages since I looked into HL for sharedealing and yes these days I have over £10k of shares and ITs in the ISA, so the shares holding charge would cap out at the £45 per annum rather than paying 0.5% on absolutely everything. Still, that's £45 holding charge on the shares compared to zero for holding anything over ~£5k with TD's ISA.

I stand by the comment that the best all round price and service depends on what you want to hold. Using my example earlier, if you had an ISA with say 12k of Vanguard funds (perhaps a Lifestrategy and a Global Small Companies) and 10k of shares: TD (post August) charges £42 for the funds and nothing for the shares, while HL charges £48 for the funds and £45 for the shares.

If you had no shares and you had a larger holding of Vanguard funds (or were using funds that didn't attract extra HL platform fees), then HL might well be cheaper. HL have after all built their mainstream reputation on the back of a fund supermarket offering, while TD have always been a decent broker offering international shares, multicurrency accounts, extended settlement trading terms etc, which more recently started to offer a broader funds proposition and leapfrogged HL in the low-cost-funds area with a wider range of Vanguard, HSBC 'C' etc.

In a year or so's time we will see exactly how the combination of RDR, FSA platform review, tax rules on commission rebates etc, has affected all the major players in the market - who is still standing and what are they charging. Meanwhile I'm not jumping ship from my current ISA and SIPP providers. I appreciate this doesn't help someone just starting out! With the markets as they are I expect there will be people piling a whole year's allowance into Vanguard's fund of equity trackers on April 6th with FTSE at 6400 and S&P at 1600, who regret it 6 months later when it transpires they picked the wrong fund AND a less than optimal platform. Of course their choice might be perfect, which is why all this is just observations rather than advice.

grey_gym_sock

if choosing a new platform, i'd take a careful look at the exit fees, so that it's not too expensive if it turns out somewhere else will be better next year.

similarly, i've wondered about moving my funds away from HL (to reduce charges; on the plus side, they are very efficient). but i don't want to move at this stage to anybody with higher exit charges than HL, to avoid reducing my options.

SavingFish

bowlhead99 wrote: »

if you had an ISA with say 12k of Vanguard funds (perhaps a Lifestrategy and a Global Small Companies) and 10k of shares: TD (post August) charges £42 for the funds and nothing for the shares, while HL charges £48 for the funds and £45 for the shares

I'm in a similar position to the original post - Looking to invest in a Vanguard Life Strategy fund via an ISA. TD look to be the cheapest currently (no annual charge for a big enough ISA pot).

I'm confused by comments relating to the changes coming August 2013 though (such as the one above).

The TD direct website says...
- Funds paying Trail Commission of 0.5% or more annually: 0.35%
- Funds paying Trail Commission of less than 0.5% annually: Nil

My understanding was that Vanguard funds don't pay a trail commission, so surely there will still be nothing to pay even after August 2013? What am I missing?

Robie

Moved to the Vanguard thread.

AlwaysLearnin

SavingFish, they are the current fees, until August

http://www.tddirectinvesting.co.uk/investment-choices/funds-unit-trusts-and-oeics/introducing-clean-funds/

BeachNut

Perhaps I misunderstand but wouldn't the Vanguard Lifestyle fund qualify as either a portfolio holding or fund of 10,000 or 15,000 so that the 12.50/Q charge on TD's Trading Account (non ISA) be waived, and the 0.35% platform fee be waived since it's a clean fund ?
So are TD's charges potentially zero vs HL of 2.00/month ?

donniej

Short answer is yes - until August (at which point no.)

TD currently don't charge anything at all for investing. Starting in August, they'll introduce a 0.35%/annum fee on all your investments.

The exit fees are atrocious, so it really feels like a bait & switch offer.

Charles Stanley are currently the cheapest offer for Vanguard funds I think (they charge 0.25% including platform fees.) HL are worthwhile considering if you have over £9,600 invested in each Vanguard fund (assuming a £2/month charge from memory)

donniej

Beachnut, TD's charges will not be zero for Vanguard funds - see the link that AlwaysLearnin posted:

Pay no platform fee charges on clean funds until August 2013. The fee we will introduce at this time will be 0.35%.

I'm really surprised TD aren't getting more bad press about this. It really is a terrible offer - and it seems plenty of people are being taken in because it looks like it's free, only to find out it's not and they have to pay extortionate exit fees.

JohnRo

donniej wrote: »

Charles Stanley are currently the cheapest offer for Vanguard funds I think (they charge 0.25% including platform fees.) HL are worthwhile considering if you have over £9,600 invested in each Vanguard fund (assuming a £2/month charge from memory)

BestInvest are cheapest (at present) for multiple (Three or more) Vanguard funds in an ISA if the total invested in them exceeds £24K, otherwise it's CS.

However BestInvest are truly terrible at dealing in a timely manner in my experience, CS are getting this years ISA allowance from me and if they're efficient and deal promptly they'll be getting future years, unless the platform price war still has some way to go.

MoneyPleaseHelp

if you are just looking to invest in one vanguard fund with £2000 and pay £250 a month which platform would be cheapest ?