How to use Alliance Trust Savings?

ChesterDog

Hi, Elle

To answer your second question first, you are correct in your suggestion. Outside an ISA things are taxable. A gain would only be taxable if it's turned into cash (ie by selling the fund that had increased in value) and took you over your CGT for the year (although that depends how long you had owned it).

Charges? Well I'm not familiar with Alliance Trust, but if no one can clarify for you I will see if I can find out.

ChesterDog

Looking at their list of Charges, it seems the £1.50 is per trade if your account is funded by a monthly Direct Debit. Not at all sure about that though - it's not clear to me what their terminology means.

Each time you buy into, or sell out of, a single investment, that's a trade.

So it looks to me like your idea of funding your account with £100 per month, which you would then use to buy £50 worth of two investments would cost you £3 per month. You could halve that charge, of course, by buying £100 of each investment in alternate months. To be honest, having reread it, I'm not at all confident that my interpretation there is correct...

Don't forget all the other charges too, though.

And that information is just based on my own quick reading of their charges.

And I'm just a small dog. :-)

Perelandra

ChesterDog wrote: »

So it looks to me like your idea of funding your account with £100 per month, which you would then use to buy £50 worth of two investments would cost you £3 per month. You could halve that charge, of course, by buying £100 of each investment in alternate months. To be honest, having reread it, I'm not at all confident that my interpretation there is correct...

It's certainly correct on the first part.

A regular monthly investment, setup online, buying in to 2 funds will incur £3 of charges a month (2x£1.50).

I use ATS for my SIPP, and actually have that exact setup, although I'm buying more than £50 in each fund each month. For a £50/fund investment, I wouldn't consider a £1.50 charge to be cost effective (3% would wipe out the first year's expected growth, more or less).

I don't know if you can alternate months for the monthly regular dealing; this would probably require your investment to be manually changed each month which, even if ATS didn't object, would be a lot of hassle!

Stochasticity

Thinking of signing up with Alliance Trust.

Two quick questions that existing customers may be able to help with:

1) On what day(s) of the month are the £1.50 automatic monthly dealing trades placed? I note that the T&Cs reference being able to contribute to an ISA by direct debit on the 1st, 8th, 15th and 22nd of the month, but are the trades placed the same day?

2) Can the platform charges associated with an ISA account be settled from outside of the ISA (e.g. by card payment/direct debit)? I do not intend to hold any cash within the ISA, and would not want Alliance Trust to sell down investments to cover their costs.

kidmugsy

Many people seem to take the view that the ATS ISA is good value if you have a lot of money there: say £40k-£50k. That seems to imply that it might be wise to start a small ISA elsewhere and transfer it into ATS when it's big enough.

The website is annoying, though; that seems to be widely agreed.

oldtoolie

Alliance has a users manual on the website to download along with other forms and info. Or you can call them and they will send you a paper copy.

Using an Alliance account is not entirely intuitive so worth referring to the manual.