Recommend me an S&S ISA

jimjames

innovate wrote: »

JJ, what association do you have with HL?

Not quite sure what you are suggesting? I have no connection with HL other than as a customer and I certainly don't recommend at every moment.

The OP asked for recommendations and I gave 2 with different reasons. I have ISAs with both HL and Cavendish. I've had ISAs and PEPs since 1996 so I've seen lots of different platforms.

HL have by far the best website of any provider I've used both before and after you buy from them. They may not be the cheapest but for someone asking a very basic question I would recommend them as a good place to start. I think the how (ie platform) is almost as important as the what (funds) if you are new and starting out.

I would generally suggest Cavendish as the cheapest provider but for someone starting out I think their site is confusing and their portfolio management limited and inflexible. Experienced investors would probably find this ok and worth it for the reduced charges.

Hopefully that has explained what I said sufficiently?

Sanchsoot49

I too would recommend HL for someone starting out. The website is very user friendly and comprehensive.

I dont have any association with them either apart from being a customer. I have found them efficient and friendly to deal with too.

You can only speak as you find, its up to the OP to decide for themselves. JimJames's post was perfectly acceptable in my view!

Martinslovechild

Hargreaves Lansdown's website is easy to use, information is presented in a easy-to-digest manner, they partially refund fund commission and you can hold a combination of shares, ETFs and funds in your Stocks & Shares ISA (unlike a number of other brokers who allow only funds in their ISAs).

However...

They're not the cheapest out there by a long stretch. It's worth looking at rplan's cost comparison tool. Several ISA providers come in cheaper than HL.

I personally use the Share Centre (share.com), but I'm about to change as (i) their costs are higher than competitors, and (ii) fund purchases often take up to 3 days to buy or sell. That's simply too slow. My Dad uses HL and purchases/sales via their platform go through faster than share.com.

MoneySaver2011_2

Thanks everyone.

I guess for a beginner like, ease of use and low risk is probably the way for me. I'll keep on researching and learning, but the HL option does look enticing.

MoneySaver2011_2

I'd also like your opinions on trackers.

I'm hearing many differing views on this. Some sources seem to highly recommend them as they have the lowest fees (as the tracker is run by a computer not a human) and that you get a decent return.

However I'm also aware some sources say they don't give as great a return as a fund as you're simply following the market, not beating it. Plus you are putting all your eggs in one basket if say, for example, tracking the FTSE.

What's everyone's views on this? Thanks

bowlhead99

There's nothing inherently wrong with following the market rather than trying to beat it, because in very well developed markets like the UK or the US where everyone has real-time access to high quality information on the largest companies, it is quite arrogant to presume that you will be able to select a manager who can do better than average out of the hundreds out there, any more that you could select for yourself the best shares to pick out of the hundreds out there. If investing is not a full time job for you, your choice of manager will be driven by advertising and by tips on forums like this, and ultimately you have to be lucky to do well.

Meanwhile a tracker will give the same return as the market, and the running costs are only a few pennies per pound invested.

To save writing it all out again here is a post where I give the basics of the theory on why people say trackers are the way to go, which you can get from any good passive investing book. Some people quite liked my analogy which lays it out.

https://forums.moneysavingexpert.com/discussion/comment/57740997#Comment_57740997

So, the logic for trackers in certain markets has a sound basis. However, one consideration is that a FTSE index or a MSCI index, whether UK or US or Europe or global, is a return from a specific basket of shares weighted towards the larger companies by size. If you want to get the actual 'average' return from every pound invested in the UK FTSE 100 over a year, you have to have your money invested proportionally to everyone else in the market.

Vodafone has a market cap of £85bn while Tesco and Unilever are about £30bn each and BAE Systems is more like £10-11bn.
Therefore, to track the performance of 'the market', and avoid the embarassment of getting a return that might be lower than the FTSE 100, you have to have more pounds worth of Voda in your portfolio than you do in Tesco and Unilever and BAE combined.

In fact you need to have 8 times as much in Voda as you do in BAE and 10 times as much exposure to British American Tobacco as you do in Sainsbury. You need more in Carnival than in British Land, and 15 times as much in BP as in Petrofac.

Now you might like all those 10 companies and want some exposure to all of them to ensure you have some sort of diversification in your portfolio. You might put a grand in each of them to spend your 10k. You probably wouldn't decide to just invest in absolutely everything in the proportions implied by the FTSE. Long term, shares generally rise and following the FTSE proportions ensures you don't fail to keep up with the headline movement you see on the breakfast news. But some would argue it is a useless portfolio plan and it's heavily weighted to a few key sectors.

Imagine out of the FTSE350 you only really liked HSBC and Dairy Crest. Would you make a £240 investment with £239 in HSBC and £1 in Dairy Crest? HSBC is a much bigger constituent of the index, so if you are a fund manager who invests 1:1 instead of having 239:1, you have a lot of explaining to do when DC goes bankrupt and HSBC goes up by 20% and you lost 40% of your money when everyone else made 20%. Of course if you invest the 239:1 and DC doubles while HSBC falls 5%, you end up being 5% down instead of the 40+% up that you could have been.

So, the FTSE isn't necessarily a good index to track, but if you want general market exposure and at least a little bit of money in everything, you can then certainly get that through trackers. At the end of the day, the FTSE100 and the S&P 500 and various others have a long term record of going up 'well enough' for the risk and volatility involved (compared to cash and bonds and property), and utilizing trackers that follow these in your portfolio can be a cheap way of getting a core of quality stocks which can get you through to retirement and beyond.

A few of my other posts that might interest you

thoughts on a guy wondering about dumping his portfolio for some trackers

this one started with some waffle about why bonds were useful rather than 100% equity and then went on to talk about Lifestrategy, a fund of tracker funds from Vanguard

and this one was talking about emerging markets and suitability of trackers

One final point I have made before. In other less developed markets or with smaller less well-known shares, simply buying the average basket of shares and holding it is less likely to pay off because it is more about doing more arduous research and who you know rather than simply googling a company. In emerging markets the trackers clearly get good returns in the good times (higher risk, higher rewards) but the added value by a good active manager is high and there are a lot of managers consistently beating the market. I certainly supplement my 'emerging markets tracker' exposure with EM equities, EM smaller companies and EM income funds or investment trusts from established managers who seem to know what they are doing.

So, I use trackers myself but not exclusively. The 'insight' into passive or active strategies is often written by people with vested interests one way or another. You won't see trackers on the HL wealth 150 because trackers try to minimize cost and not pay as much for marketing or commissions to appear on that list. But billions are invested through trackers.

Ultimately how you split the cash between types of investments and regions of the world is going to have a major effect on your returns - picking an active or passive strategy as the next step may have a lesser one than you expect. The initial allocation is itself an 'active' decision even if rebalancing back to your target allocation later becomes formulaic.

adewalton

Hi,
I might as well chip in with my 2 cents worth.....

I looked around all most if not all online fund and share dealers and found the following:
H & L are very good for funds etc ... Why well....
Their website is clear, very informative and has a nice pleasing to the eye lay out.
You can hold both a S&S ISA with them and a Share / Fund account.
They have a great smart phone app so you can check on your investments when away from PC which I think is handy.
They are not the cheapest but they are by no means the dearest either.
Their customer service is first class. On the couple of times I have had to talk to them I have found them excellent.
I would not and do not use them for Share dealing as their prices are a little rich for me.
Having said that I don't invest in single shares at the mo as I prefer funds.
I have no affiliation with H & L apart from being a customer.
Yeah Cavendish and others are cheaper but there's nothing in it really and your paying the extra for easy of use, simple web platform and customer service.

For shares I like SVS Securities - it's again is a nice plain and simple layout with good customer service.
I think they only deal in shares and it costs £5.75p per trade which I think is not bad.
They don't deal in funds and there is no app for you phone at the moment.
If I was looking to get back into shares I might look around again and compare prices etc and see which is cheap and offer smart phone dealing as I think that might be handy if you need to sell one of your equity holdings fast!!!
Like I said I'm not in single equities at the mo so not too bothered.
I'm not very busy tomorrow so I might have a little look around to find a broker that suits the above incase I get back into single company shares!

You just need to do a bit of looking around on the net to find a dealer that suits you.
Lots of people will have different ideas but its what you are happy with?
Keep us posted as to which dealer you go with and what fund(s) you select.

All the best!!!
Ade

adewalton

Another plus with SVS Securities is that after you open your account they give you 30 days trading for £1 per deal. It's only for the first 30 days then its £5.75p per trade.
Like I said no mobile trading app but you use the Internet on your phone / tablet to log in a trade etc.
SVS are a nice, cheap little broker and you would not go far wrong with them for your share dealing.
Just a bit more info for you!!!
Cheers
Ade

Carpi09

I have found HL very good thus far. The amount I have learned from just researching their website is incredible.

dunstonh

I'm hearing many differing views on this. Some sources seem to highly recommend them as they have the lowest fees (as the tracker is run by a computer not a human) and that you get a decent return.

Trackers are cheap. However, the return in the main markets will be mid table and just below benchmark. It will be mid table consistency though. Managed funds are more expensive. If you are going with a bog standard managed fund in a sector than a tracker may well be better. You would certainly eliminate passive managed. However, many managed funds focus on areas that are different to the tracker and they may offer greater potential or a different type of investment focus and could well have periods that outperform the tracker as well as have some periods that underperform. You just dont know. You should look at potential and decide which is best in your portfolio. Ideally, you need around 8-13 funds in a portfolio if you are going to use single sector funds.

If you dont want to run a portfolio yourself then use a portfolio fund. You can get managed portfolio funds or tracker based portfolio funds. Either is better than going into a single focused sector fund.