Stocks & Shares ISAs

Brand

Vlad~

Brand wrote: »

. . for LSE listed shares (including London-listed ETFs and I.Ts covering abroad, and expecting several trades per year, look at commission rates, so start with x-o and iWeb. For the occasional New York listed stock or ETF, you can get that with iWeb. For the above shares (not funds) with infrequent trading, try interactiveinvestor, for a mix of LSE and NY listed shares, but mixed with some funds too, try also interactiveinvestor. . .

For NY you don't pay stamp duty to buy, but you do pay the foreign exchange charge both buy and sell, and you have to complete a W8-BEN I guess you know what you are doing trading individual shares, though this is in the realm of speculation. (Better to consult specialist share websites than this general money-saving website, I think.

Brand

Stuck1 wrote: »

I also have a Halifax ISA that was set up years ago. At the time Halifax had in house financial advisors (who advise on Halifax products only) so it was all explained and I've tracked the fund every so often. I also set it up as it was convenient and knew little about the funds. You used to be able to monitor it on the web, but they removed this function around 2009 and its never returned.

Halifax no longer have advisors and you have to phone the fund admin, who I think are no longer Halifax, maybe its Scottist Widdow? You can get a valuation over the phone and schedule in a chat to talk over your investment history, so you can get a good idea how the fund has performed. You can also request a paper copy of your invest history. You should receive a quarterly overview report, but it should detail your specific valuation.

Stuck, you are halfway there, as you are trying to keep on top of your money.
Various articles say that in-house funds are poor performers and charge full initial and annual charges. http://www.trustnet.com/Investments/Perf.aspx?univ=U&Pf_Manager=HXEQ
Useful site which also includes OCF, which is better measure than TER annual cost of runningfunds: http://www.moneyobserver.com/funds-by-HBOS-Investment-Fd-Mgrs-Ltd
Discount brokers got popular 20 years ago to give people an easy way to get better managers and reduced charges. Hence question posed in MSE article: How to find the cheapest platform.

bowlhead99

Vladislavs wrote: »

So im looking for the cheapest platform and cheapest trade fees.

And one more thing, im planning to trade american stock. ie. like Apple stock for example. So any platform that allows to do so with american shares and not too expensive charges.

You'll find the very cheapest brokers don't cover foreign markets. So you'll usually be paying over a tenner a trade unless you qualify for frequent trader commission discounts. And the downside of doing it in an ISA, as Brand says, is currency conversion. Because you can't hold foreign currency in an ISA.

Assuming your broker skims a couple of percent off you when buying the dollars to buy Apple shares, then he charges you 2% when converting the dollar proceeds back to pounds, you're down 4%. Then you use those pounds you got back, to buy Amazon and again the broker takes another couple percent, to buy the necessary dollars. So you're out 6% even before thinking about selling that second stock.

And if you were only trading in chunks of say £1k a time, you would have now spent £30-50 in dealing fees which is another 3-5%. So that plus the forex effect puts you down 10% total before you even complete your second round-trip. So as others have said, it's not very efficient.

One thing you could consider is not even bothering with an ISA. I use TD Direct for my ISA and a normal trading account. They cover a wide variety of overseas markets and, importantly for someone trading those markets, they let you hold multiple currencies (just, not in the ISA version). So when you sell Apple you get dollars and keep them in your trading account until you spend them on something else. You only pay to convert currencies when you actually want to.

So when I just recently added some more Amazon shares I did it in my non-ISA account. They don't pay dividends so no dividend tax to worry about, and buying something for a few thousand dollars is unlikely to result in a gain of over 11 thousand pounds in any one tax year when I come to sell, so would be manageable within my annual capital gains tax allowance.

This then preserves space inside my ISA limit for things that pay interest or dividends where the tax benefit is more useful. And means that if I decide to sell, I can keep the dollars until I use them on other U.S. stocks (or USD-priced shares listed in the UK, for that matter).

TD do charge an inactivity fee on their non-ISA account if you don't trade once a quarter. However as a trader this might not be an issue for you. If you are more of a buy-and-hold kind of guy, an option to avoid the fee is to have an ISA with them with about £6k in it (which is above the size threshold at which they waive annual ISA admin fees) and then put your other £9k in the unwrapped trading account (where they will waive inactivity fees if you also have an ISA).

I also bought some Yelp shares recently in my Youinvest account. I have their SIPP account and it doesn't let me hold dollars but the conversion charge is only a percent and the trading fees are not too bad. The ISA version of the account doesn't have a fee for holding shares (and for holding funds it's a lower platform fee than TD).

So, there's a variety of options out there if simply trading U.S. shares is what you want to do with the account. You won't get down to the price of the cheapest providers who cover UK stocks only (like x-o.co.uk) but the more expensive ones handle it. I hear good things about Saxobank for international portfolios but have never tried them.

Stuck1

Thanks Brand. That's put things into perspective! I've been meaing to get around to switching and will check out the various funds. If I want to make withdrawls from HBOS I have to fax instructions and the changes are made the next working day, so it's not exactly responsive which worries me if there is any market fluctuation. I'll read up on the new ISA rules too.

Brand

Stuck1 wrote: »

Thanks Brand. That's put things into perspective! I've been meaing to get around to switching and will check out the various funds. If I want to make withdrawals from HBOS . . . . . . . I'll read up on the new ISA rules too.

As with cash ISA transfers, you don't actually withdraw, but you open an account with the new provider, complete a transfer form supplied by the new provider, who then sends it to HBOS. Yes it usually takes a few weeks.
PS Yes you are also prob right that Halifax is just a marketing label for a SWIP fund. I didn't want to put up llinks in case someone thought it was a good idea to buy one !

Cuidadosa

Hi All,

-Key question: Looking for the best (convenience and cost) platform to drip feed in and out of a tracker fund (monthly?) £200/month. Basic tax payer.

I went yesterday to a financial advice workshop with a focus on savings and they introduced me to the world of 'investing'. But it was just that, an introduction and some advice to reduce our apprehension towards it.

Basically, I got out of it the mantra of 'drip feed in and out of a high spread fund' (e.g. a FTSE tracker, bond fund, property fund...).

I'm a basic tax payer with close to £25K in a paltry 1.7% ISA. I hoped onto the property ladder 2.5 years ago and judging by my savings since I dished out the house deposit, I can save £5K year. But I have plans to have children in the not so distant future, so this would change.
My partner wants to move to a bigger house in the next couple of years, so that would mean a good chunk of those £25K would go (say £15).
That leaves me with £10K that would give me a nice 'ready access cushion'.

But that's way more than enough, so what do I do with any new savings from now on?

I want to put some of it towards my pension (I already do, but maybe increase this contribution) and some in a tracker fund, let's say £200/month (here is where my question comes in).

I'm not sure how the drip feed in and out works. Is it each time I add money or take out money that counts as a 'trade'? Is my idea of doing this monthly a good one? (The guy yesterday seemed to say so). Are there any platforms that would let me do this conveniently (i.e. I don't need to interact with it every month) and cheaply? Is a S&S ISA ok for my situation as basic tax payer £200/month?
I particularly don't understand what he meant by 'drip feed out' (the drip feed in is like a regular savings, right?) and if that's easy to do!

Thanks a ton and SORRY for the long post.

jimjames

Monthly is ideal and most platforms allow DD setup so no need to manually make any payments.

I've been investing for 18 years and never heard of drip feed out so can't help there I'm afraid. Drip feed in is fine but out doesn't make a lot of sense to me!

innovate

I am not familiar with drip-feed out either. But it could mean that a regular income is required, a bit like a savings account? In which case, it would make a lot more sense not to invest the money in the first place but to put it into one or two high interest paying current accounts. You should have an emergency cash fund, too. I think you might refer to this when you say "ready access cushion". If so, don't invest it! What would you do if your investment has temporarily tanked when you need some cash for a broken down car, washing machine, house repairs etc , or other crisis?

Brand

Cuidadosa wrote: »

Hi All,

-Key question: Looking for the best (convenience and cost) platform to drip feed in and out of a tracker fund (monthly?) £200/month. Basic tax payer.

I went yesterday to a financial advice workshop . . .

Basically, I got out of it the mantra of 'drip feed in and out of a high spread fund' (e.g. a FTSE tracker, bond fund, property fund...).

I'm a basic tax payer with close to £25K in a paltry 1.7% ISA. I hopped onto the property ladder 2.5 years ago and judging by my savings since I dished out the house deposit, I can save £5K year. But I have plans to have children in the not so distant future, so this would change.
My partner wants to move to a bigger house in the next couple of years, so that would mean a good chunk of those £25K would go (say £15).
That leaves me with £10K that would give me a nice 'ready access cushion'.

But that's way more than enough, . . . .

young family, Cud, I dunno your situation but £10k is not enough ready access, esp as you face many unknowns and any ISA should really be left alone except for a special target years away, or as fallback in dire emergency.
very phrase "financial advice workshop" givess same shivers as "wealth creation seminar". At least got you thinking and asking. "high spread" I don't understand.
Drip feed in is because we are bad at timing, so same logic applies to exiting from your pot, but implies decades away to make any sense,e.g. when retired

Cuidadosa

Thanks people!

I now realise that I didn't really give a full account of my situation, only half of it. I didn't mention my OH's savings and/or income which is greater than mine. The reason being that he's an absolutely risk averse person who wants instant access to every penny of savings, so not even government bonds will sway him and he keeps 20K in his current account because setting up a savings account is not worth the hassle since rates are so low and he pays higher tax rate. At least I managed to convince him to fill in a cash ISA!!
Anyway, in terms of cash access, we are alright. I just want to know how to save for the longer term.
I think you are right and the 'drip feed out' means in the later years.. I'll come back with that question then
Meanwhile, for that monthly quantity, what do I need to look for in a platform to minimise costs?