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

koru

thechief1979 wrote: »

so I guess my question is two fold: is TD Direct a good investment choice for a minimum 18 year period (thinking uni fees) and would £25 pcm get us half decent returns during that period.

TD Direct is a platform through which you would hold the underlying investments, such as unit trusts and shares. The choice of TDD versus other platforms is mainly about the fees they charge and the service they provide.

If you are investing £25 per month, I would think that your priority should be to minimise any fixed transaction costs on your purchases. So, you should be going for a platform that does not charge anything for purchases of funds. (Stick to funds, as shares and ETFs will have purchase costs.) TDD is OK on this, as purchasing funds is free.

But you are also going to have a small pot (ignoring any investment returns, you will build up £5000 over 18 years). So you want a platform that does not have flat rate account fees, because this will be a high share of your pot disappearing as fees each year. You might be better with, say, Charles Stanley Direct, which charges 0.25% account fee. On a £5000 pot, that's £12.50 per year, which is pretty low. Lower than TDD. (However, I'm not sure if CSD's minimum investment is as low as £25 per month. Maybe make it £50 every two months?)

The returns will depend on what you invest in and what annual fees you incur on the gross returns. The small size of the investment shouldn't stop you getting good returns, as a percentage of what you are investing. But it might make it difficult to spread your money around to diversify your risk, so I would be tempted to go for a single fund with a wide (global) spread of investments, such as Vanguard Lifestyle trackers. This will also minimise the annual fees at the fund level.

koru

xylophone wrote: »

Might you want to consider JISA? https://www.gov.uk/junior-individual-savings-accounts/overview
http://www.jisa.org/html/junior_cash_isa.html

But remember that the money would belong to your child absolutely at the age of 18.

A JISA might be an option. If thechief1979 isn't using his/her own ISA allowance, they could use this instead, and keep full control of the investments, so they can make sure it is used for a constructive purpose. And if thechief1979 is not a higher rate tax payer, the ISA wrapper might not make much difference anyway.

thechief1979

thanks koru & xylophone. given me a lot to think about.


not sure of the junior isa - not really comfortable effectively giving an 18 year old a wad of cash to do as they wish... if he's anything like his Dad at that age, there's a chance he might p**s it up the wall!!!

thechief1979

thechief1979 wrote: »

Hi,


Not sure if this thread is still running but just had an email from money.co.uk promoting TD Direct Investing Trading ISA and was hoping for some advice from mse forumites please.


Would like to use an investment isa to build a fund for my 3 month old sons future but with money being tight with an extra mouth to feed we can only really spare a small amount each month, which is why the TD Direct Investing Trading ISA caught my eye as this is one of the few that has a low £25 month min investment.


so I guess my question is two fold: is TD Direct a good investment choice for a minimum 18 year period (thinking uni fees) and would £25 pcm get us half decent returns during that period.


thanks for any hep

just to bump to my original post a little please - I still haven't plucked up the courage to dip my toes into the world of investment banking. partly due to not having the confidence but also because having a baby is a full time job isn't it! ;0) but really want to get this going asap as the bank account saving returns are pitiful.


We have been able to save a lump sum of £600 to use as an opening deposit and with help from generous grandparents, are able to increase the monthly contributions to £50.


So just wondering if a Vanguard fund is the best option in our situation and if so, who is the best provider? TD? Charles Stanley? H&L? A N other?


Should of mentioned in previous post but ideally I don't want to play an active role in the management of the fund (buying/selling etc) one, because of a lack of confidence and two because of limited time for researching. appreciate that having someone else do this will reduce my gains but i'm really not expecting to make 'millions' anyway. ideally i'd want something that would 'manage itself' with maybe a biannual review by myself?


hope this makes sense (and is possible)? many thanks in advance for any help

edinburgher

Vanguard LifeStrategy would seem to be a good choice for your circumstances, the best provider would appear to be whoever has the lowest platform charge for your circumstances.

Charles Stanley Direct are very affordable compared to HL, but don't currently offer a JISA. They do hope to launch them soon and have a mailing list set up for potential clients.

For disclosure, I am a fan of VLS, invest in those funds myself and will use them to invest for future children :beer:

eskbanker

thechief1979 wrote: »

I still haven't plucked up the courage to dip my toes into the world of investment banking

You might want to get your feet wet with a little personal investing before embarking on a career change like investment banking!