Stocks & Shares ISAs

dunstonh

welchj295 said:

Advice please. My hubby and I currently have approx 90k in ISAs managed by an IFA.   After three years they are worth the same as when we invested or less in some cases.  Obviously we are aware stocks can go up or down but the charges seem to erode any gains away.  We have a low income. My hubby is a basic rate tax payer and I’m not earning so do not pay any tax.   If we keep our ISAs what kind of return should we expect if we went for a level 5 investment?   Do people on a low income need to bother with ISAs or are there any alternatives for savings/investments in this age of low interest rates?  

Please can you keep your post on one thread and not spread it across multiple threads.
For the benefit of others, this poster has created their own thread and ideally, replies should be on that thread rather than here.  Otehrwise we all just end up repeating ourselves.
https://forums.moneysavingexpert.com/discussion/6204276/returns-from-s-s-isa-s#latest

DragonQ

I currently have £12k in an ISA with Moneyfarm that hasn't been added to in 2 years there because I've been taking advantage of cashback offers for other S&S ISAs. They've reneged on the 100-year £12k free management offer I got when signing up and now charge fees totalling around 1%. Time to ditch them. Any suggestions? Nutmeg's fully managed portfolio has similar fees to Moneyfarm but their Fixed Allocation is cheaper. OpenMoney looks like a similar platform but with lower fees - is their service "managed" like Moneyfarm is?

Bit of info about the Moneyfarm investment:

• It's risk level 3/7 and has returned 16.4% (money-weighted) over 3.5 years.
  
• I do plan to start adding more cash per month if there's no cashback offers for S&S ISAs next tax year.
• It's a medium-term investment that currently has no specific goal (might go towards building our own house, or a university fund for the kids)
• My wife and I both have separate private pensions and about £40k in liquid cash.
  

masonic

DragonQ said:

I currently have £12k in an ISA with Moneyfarm that hasn't been added to in 2 years there because I've been taking advantage of cashback offers for other S&S ISAs. They've reneged on the 100-year £12k free management offer I got when signing up and now charge fees totalling around 1%. Time to ditch them. Any suggestions? Nutmeg's fully managed portfolio has similar fees to Moneyfarm but their Fixed Allocation is cheaper. OpenMoney looks like a similar platform but with lower fees - is their service "managed" like Moneyfarm is?

Have you ruled out a mainstream investment platform and a multi-asset fund?

jicms

I have held a S&S ISA account with Nutmeg for the past year.  I now want to invest this year's ISA entitlement.  Is there any advantage opening a different provider's "do it for me" account over depositing into a new pot with Nutmeg?  

Alexland

jicms said:

I have held a S&S ISA account with Nutmeg for the past year.  I now want to invest this year's ISA entitlement.  Is there any advantage opening a different provider's "do it for me" account over depositing into a new pot with Nutmeg?  

You pay higher ongoing charges for the convenience of using robos such as Nutmeg, Wealthify, Moneyfarm, etc. You can get roughly the same underlying asset allocation using a multi-asset fund series such as Vanguard LifeStrategy or HSBC Global Strategy which can be held on Vanguard Investor, HSBC Investment Centre or iWeb (for larger amounts). As a rule of thumb you should be able to cut your total investment costs by at least 50%.

DragonQ

masonic said:

Have you ruled out a mainstream investment platform and a multi-asset fund?

No, the information I've found regarding that method has always made it sound overly complicated. If I'm wrong about that then am happy to consider. For example, I see that Vanguard LifeStrategy has an "ongoing charge" of 0.22% and Vanguard Investor has a 0.15% charge, so the total would be 0.37% per year (plus market spread) if I transferred my ISA to them? I don't want to do any trades myself, I just want to pick a fund and go, so does that mean iWeb is off the table?

EDIT: A concern with Vanguard (and probably the others) is the minimum investment. That means I can't open the account until at least April.

masonic

DragonQ said:

masonic said: (never mind that he had previously been calling for a lockdown when the Government seemed intent on avoiding one)

Have you ruled out a mainstream investment platform and a multi-asset fund?

No, the information I've found regarding that method has always made it sound overly complicated. If I'm wrong about that then am happy to consider. For example, I see that Vanguard LifeStrategy has an "ongoing charge" of 0.22% and Vanguard Investor has a 0.15% charge, so the total would be 0.37% per year (plus market spread) if I transferred my ISA to them? I don't want to do any trades myself, I just want to pick a fund and go, so does that mean iWeb is off the table?

EDIT: A concern with Vanguard (and probably the others) is the minimum investment. That means I can't open the account until at least April.

It seems you've grasped it pretty well. So, you can either pay 0.15% per year to Vanguard to hold Vanguard Lifestrategy, or you can pay iWeb a one-off £25 fee for your account and £5 each time you wish to invest more money in the fund. Either way, you pay the same 0.22% fund management fee. There is no market spread. iWeb will work out cheaper over the long run for someone who is planning to build up a large sum, while Vanguard is more cost effective for smaller amounts. If you wanted to go with iWeb, you should open a trading account before the end of the year to lock in the £25 opening fee, which increases to £100 next year.

With either option, you would need to add money to your account and then invest it in the fund, but there would be no need to do any 'trading', just topping up the fund you already hold.

jicms

Alexland said:

jicms said:

I have held a S&S ISA account with Nutmeg for the past year.  I now want to invest this year's ISA entitlement.  Is there any advantage opening a different provider's "do it for me" account over depositing into a new pot with Nutmeg?  

You pay higher ongoing charges for the convenience of using robos such as Nutmeg, Wealthify, Moneyfarm, etc. You can get roughly the same underlying asset allocation using a multi-asset fund series such as Vanguard LifeStrategy or HSBC Global Strategy which can be held on Vanguard Investor, HSBC Investment Centre or iWeb (for larger amounts). As a rule of thumb you should be able to cut your total investment costs by at least 50%.

If I used Vanguard instead of a robo I believe I would need to make my own decisions which I'm not capable of doing?
Isn't Vanguard LifeStrategy heavily weighted towards the UK which I wouldn't be confident about?

DragonQ

masonic said:

It seems you've grasped it pretty well. So, you can either pay 0.15% per year to Vanguard to hold Vanguard Lifestrategy, or you can pay iWeb a one-off £25 fee for your account and £5 each time you wish to invest more money in the fund. Either way, you pay the same 0.22% fund management fee. There is no market spread. iWeb will work out cheaper over the long run for someone who is planning to build up a large sum, while Vanguard is more cost effective for smaller amounts. If you wanted to go with iWeb, you should open a trading account before the end of the year to lock in the £25 opening fee, which increases to £100 next year.

With either option, you would need to add money to your account and then invest it in the fund, but there would be no need to do any 'trading', just topping up the fund you already hold.

So if I transferred my £12k and started a monthly top-up of £100, Vanguard would surely be cheaper as iWeb would charge £5/mo or £60/yr for that, whereas Vanguard would be around £20/yr. However, if I transferred my £12k to iWeb and then only added a lump sum per year, they'd only charge me £5/yr?

masonic

DragonQ said:

masonic said:

It seems you've grasped it pretty well. So, you can either pay 0.15% per year to Vanguard to hold Vanguard Lifestrategy, or you can pay iWeb a one-off £25 fee for your account and £5 each time you wish to invest more money in the fund. Either way, you pay the same 0.22% fund management fee. There is no market spread. iWeb will work out cheaper over the long run for someone who is planning to build up a large sum, while Vanguard is more cost effective for smaller amounts. If you wanted to go with iWeb, you should open a trading account before the end of the year to lock in the £25 opening fee, which increases to £100 next year.

With either option, you would need to add money to your account and then invest it in the fund, but there would be no need to do any 'trading', just topping up the fund you already hold.

So if I transferred my £12k and started a monthly top-up of £100, Vanguard would surely be cheaper as iWeb would charge £5/mo or £60/yr for that, whereas Vanguard would be around £20/yr. However, if I transferred my £12k to iWeb and then only added a lump sum per year, they'd only charge me £5/yr?

Yes, that's right. If you were to go with iWeb, you'd want to minimise how often you topped-up. My approach has been to use a few 12 month regular saver accounts to build up a lump sum to invest when they matures - the lack of good regular savers around at the moment makes that a less attractive option.