Stocks & Shares ISAs

Brand

PoorPaul wrote: »

But now we are thinking... the Co-op are in trouble, . . .

and as Woodyhp raises the issue of safety:
As Archibald says, normal customer stockmarket investments are ringfenced. Also, it seems to usually happen that if a scheme fails, then someone steps in to take over the scheme.
Here are a coupleof articles showing that (non-professional) client money is segregated http://www.candidmoney.com/articles/238/all-about-nominee-accounts
http://www.thisismoney.co.uk/money/diyinvesting/article-2311641/Is-DIY-investing-platform-safe-I-lose-money.html

By their nature of using savers’ money for operational activities, banks and building societies do not segregate client money, hence the bank crises in 2007 and 2008, though client money in stockbroking accounts and fund platform accounts marketed by banks and building societies is segregated by those partners, just the same as for any other such accounts. This is how the problems with the coop turned out for investors. http://www.telegraph.co.uk/finance/personalfinance/10125351/Is-my-money-safe-with-the-Co-op.html

I say “is”, segregated, but mean “should be”. Segregation of client funds Should happen, though there can be malpractice. The collapse of companies operating in UK, Worldspreads and MFglobal showed this to be a real problem. One victim indeed was a smart Kent investor, whose account had grown to well over £400k He could be even now, over two years later, I suspect, be trying to salvage what he can from the wreck. He probably had to sell his claim to a claims broker, which would pay him a decent, but not whole, proportion of its previous value.

RaspberryFool

So Ofgem has just announced a limit of 17 days for energy supplier transfers. When can we expect the powers that be (OfISA ?!) to bring in some sort of legislation to allow stocks and shares transfers to be carried out in a reasonable time?
MSE may have recommneded Interactive Investor as a top broker to transfer to - but that is not much use if the existing provider doesn't play ball and has no incentive to.
Martin (MBE), maybe you can take this up as your next crusade?

Brand

RaspberryFool wrote: »

So Ofgem has just announced a limit of 17 days for energy supplier transfers. When can we expect the powers that be (OfISA ?!) to bring in some sort of legislation to allow stocks and shares transfers to be carried out in a reasonable time?

Yes in these days of electronic accounts, transfers should all be done, including any fund holdings or share holdings, within a week.
The other nonsense is when your new provider then demands anti-laundering paper evidence , even though they know exactly where the money comes from. and know full well that the an ISA account is hardly of a size and flexibility to cover the many day to day receipts and payments of a business account of a viable smuggling enterprise. It is a complete bureaucratic nonsense.

Money_Saving_Dude

ok, I would like to see on any discussion about investing three key points made loud and clear, so no one misunderstands them:

* DO NOT invest until you have got rid of all your debts -- some disagree whether to include a mortgage in your debts

* MAKE SURE you have a pot of money that you can get to quickly when you need it -- emergencies will occur from time to time, and you must be prepared

* UNDERSTAND that you may lose your investment -- this is highly unlikely, but possible -- in any case it may go down in value so you should be mentally prepared for this

Investing is for the long term (10 years is a good target, 5 is about the shortest you should be looking at). Do some reading and remember that tracker funds are on the whole much better (again do some reading to find out why -- or even better to prove me wrong!).

Personally I would steer clear of Hargreaves Lansdown; they were my broker of choice but since RDR are now three times more expensive (grrr!). They like to have the smooth talk, and constantly push their Wealth 150, but I would NEVER EVER touch these -- they are active funds and you are basically giving some of your earnings to fund managers. You know nowt about the future and neither do they -- keep to a tracker (that's my opinon -- if you don't agree prove me wrong again!).

I have been trying to move my ISA from HL to iWeb. It is taking an extraordinary amount of time (two months -- sounds to me like HL want to hang on to it for as long as possible to maximise their charges; bar stewards).

Anyway, investing is fun, interesting and exciting. But remember my three golden rules:

* Get rid of debts
* Have a cash pot for a rainy day
* Always think you can lose your investments.

jimjames

Money_Saving_Dude wrote: »

ok, I would like to see on any discussion about investing three key points made loud and clear, so no one misunderstands them:

* DO NOT invest until you have got rid of all your debts -- some disagree whether to include a mortgage in your debts

* MAKE SURE you have a pot of money that you can get to quickly when you need it -- emergencies will occur from time to time, and you must be prepared

* UNDERSTAND that you may lose your investment -- this is highly unlikely, but possible -- in any case it may go down in value so you should be mentally prepared for this

Anyway, investing is fun, interesting and exciting.

Good to highlight these points so no-one is under any illusions.

However I'm one that doesn't agree with including mortgage debt when considering investments. I could have paid off my mortgage but by investing my investment portfolio is 3x my mortgage balance. With the current low mortgage rates it is even easier to be able to beat those with returns from investing - even the yield on the FTSE100 is more than my mortgage.

I also don't agree that you should prepare to lose your entire investment. By all means be prepared for it to drop 50% in a bad period but you don't lose money unless you sell and you certainly shouldn't ever lose your entire investment if you've put it into a FTSE tracker. If you did then the world would be collapsing and investment returns would be the least of your worries.

bowlhead99

jimjames wrote: »

I also don't agree that you should prepare to lose your entire investment. By all means be prepared for it to drop 50% in a bad period but you don't lose money unless you sell and you certainly shouldn't ever lose your entire investment if you've put it into a FTSE tracker. If you did then the world would be collapsing and investment returns would be the least of your worries.

I also agree there is no point 'mentally writing off' any investment you make. That will psychologically make it much easier to just dump a fund by the roadside during a down market when it is still a fundamentally decent set of underlying assets at cheap prices which would be a bargain if you were to buy more of it that day. Which would usually be a mistake unless you were very desperate for the money.

The old adage 'don't invest what you can't afford to lose' is a decent way of scaring people off investments when they should first be focussed on savings. This is said because a pot of investment that might have lost 25-50% when you need it most is absolutely no good as an emergency fund or short term savings account for a known goal. However, implying that you should be prepared to lose whatever money you put into investments would mean that most people would never invest and would be woefully unprepared for retirement and would have to work very much harder to reach life's long term goals.

Maybe modify the comment to say be prepared to lose some of your investment value. If your investment is the equity shares or loan stock of one particular company then sure, you might lose the whole lot. If it is something like an investment fund spread across asset classes and geographic regions that doesn't employ significant gearing, or a tracker fund (either using physical replication or a very diversified set of unrelated counterparties in a synthetic tracker), it is very unlikely you would lose it, barring fraud etc.

Money_Saving_Dude

Of course I knew my post would raise some discussion, but I didn't want it to become a long rant (I normally save that for my wife :-).

I also agree that mortgages can be ignored as debt. But then on the other hand your mortgage is a liability. Yes you can make more investing, but the more you pay the mortgage down, the more you are reducing your liability. After all, all future mortgage payments or investments presume you will still be in work or getting enough income to make the payments. We live in an increasingly insecure world; the income you plan on using may not be there. This argument gives more weight to paying off your mortgage. My employer can now sack me; I don't care as I now own my own home.

Having some money stashed for a rainy day is just common sense.

The last point I made can be taken several ways. I agree entirely that it is EXTREMELY unlikely that you will lose all your investments. If you do we will all be in trouble because probably our whole economy will be a mess, and there will be other things more important. (War is an example.)

But it is the psychology of investing that is critically important. If you sell up as your investments go down you are sure to lose. So what I was trying to say is understand your investments can go up and down, and better still don't bother looking at them! Don't worry your little cotton socks that you have lost money. It is very likely to grow again, and if you don't look every two minutes, but maybe every three months, or better every year, you may only see the history of the ups and downs that you were never aware of.

Psychology makes people poor investors -- so turn your back and give psychology the finger; ignorance is a way to make wealth. OK, this is also probably poorly expressed, but what the hell, I know what I mean. And what I really mean is trust in the markets.

Above all do a lot of reading to understand what has gone before, because while it may not happen in the future the chances are some of it will again.

And finally don't think that the fund managers are any cleverer than you -- because they are not!

Robin_Davies

SnowMan wrote: »

One difference in platform charges for funds that is worth mentioning:

No exit fee for re-registering ISA funds away from Cavendish.

But £10 per fund re-registration away fee from a Charles Stanley stocks and shares ISA.

Is that £10 per ISA or £10 for each fund in the ISA?

le_loup

Per fund.
..................

Blue2

My husband and I have retired. The bulk of our savings are in stocks and shares Nisas. If the market were to collapse could we lose everything we have saved for ? Thank you