Stocks & Shares ISAs

gambit007

I'm thinking about opening a Junior Stocks and Shares ISA.  My child is 5 years old.  I save about £1,000 pa into a junior cash ISA, saving all the money I get from surveys and re-selling old toys, etc., so it goes in in dribs and drabs of £5 here, £10 there.  I am thinking about opening a Junior Stocks and Shares ISA as well.  I am hoping to make a further £1,000 pa to invest.  From a bit of a read, it seems like a robo-adviser package might be a good option.  Do my circumstances seem suitable for Junior Stocks and Shares?  

masonic

gambit007 said:

I'm thinking about opening a Junior Stocks and Shares ISA.  My child is 5 years old.  I save about £1,000 pa into a junior cash ISA, saving all the money I get from surveys and re-selling old toys, etc., so it goes in in dribs and drabs of £5 here, £10 there.  I am thinking about opening a Junior Stocks and Shares ISA as well.  I am hoping to make a further £1,000 pa to invest.  From a bit of a read, it seems like a robo-adviser package might be a good option.  Do my circumstances seem suitable for Junior Stocks and Shares?  

It's your child's circumstances really, as it will be their investments. Being 5 years old and therefore investing for >10 years is a major factor in making it a suitable approach. Robo is an option if you don't want to opt for an all-in-one fund (e.g Blackrock MyMap, HSBC Global Strategy, Vanguard Lifestrategy etc) or even a simple global equities index tracker.

spursinger

I'm not sure how common it is, but if you want to transfer to or from a Moneyfarm Stocks & Shares ISA you have to sell the shares and make any transfer as cash. You cannot make a share transfer. This obviously involves extra costs but does not even warrant a mention on their site or Moneyfarm telling you about when you ask them about transfers unless you specifically ask the question. I think this is very misleading. 

dunstonh

spursinger said:

I'm not sure how common it is, but if you want to transfer to or from a Moneyfarm Stocks & Shares ISA you have to sell the shares and make any transfer as cash. You cannot make a share transfer. 

That is because most moneyfarm offerings do not fall under a platform offering but are robo-providers.     If you are using one of their portfolios, the funds you hold are within a discretionary portfolio and not self select.   They cannot strip your individual funds out from the wider portfolio.

This obviously involves extra costs but does not even warrant a mention on their site or Moneyfarm telling you about when you ask them about transfers unless you specifically ask the question. I think this is very misleading. 

What charges are you referring to as Moneyfarm say on their website "We’ll never charge you a fee for transferring to or away from Moneyfarm, just make sure you do it properly so you don’t lose your tax benefits."

You do not select a provider like moneyfarm or any of the other robos on the basis of being able to do in-specie transfers at a later date.   Its not really an important disclosure that they don't do it.

eskbanker

spursinger said:

I'm not sure how common it is, but if you want to transfer to or from a Moneyfarm Stocks & Shares ISA you have to sell the shares and make any transfer as cash. You cannot make a share transfer. This obviously involves extra costs but does not even warrant a mention on their site or Moneyfarm telling you about when you ask them about transfers unless you specifically ask the question. I think this is very misleading. 

It is mentioned within the FAQs at https://www.moneyfarm.com/uk/transfer-isa/

How do I transfer my ISA investments to another manager?

To transfer your money away from Moneyfarm, please contact the provider you wish to transfer to. They should arrange the transfer of your funds on your behalf. Please note that we can’t transfer your investments ‘in specie’, but can only transfer your assets as cash. To allow for this, all your assets will be liquidated within 7 days of receiving your transfer request. We won’t charge you a thing to transfer away from Moneyfarm or to close your account, but your new provider may, so please be aware of all fees you will be required to pay before you start.

[...]

Can I transfer existing ISAs with other providers to the MoneyFarm ISA?

Yes, you can transfer existing ISAs from other providers by simply completing a Moneyfarm ISA transfer form and returning it to us. This form is provided to you once you’ve created an ISA portfolio using the ISA transfer option, or if you already have an ISA with us you can access the form inside your ISA portfolio under the actions section.
To start the process, return the completed form to us and we will then contact your existing ISA provider to arrange the transfer. It will be possible to transfer both Cash ISAs and Stocks & Shares ISAs to Moneyfarm, however we will always hold your investments in a Stocks & Shares ISA. We do not currently offer a Cash ISA.
Any Stocks and Shares ISA that is transferred won’t hold the same investments as before. We instruct the current ISA manager to sell the investments and transfer the ISA as cash for us to invest. This preserves your ISA’s tax-efficient status and allows us to manage it in the most appropriate way for your goals, timeframe and attitude to risk.
This process usually takes 15-30 days, but depends on your ISA provider.

Tiredofworking

Are there any self select ISA providers who have 'trailing buy' and 'trailing sell' functionality?
It's used extensively in crypto gambling , er I mean investing ;-) and would be an excellent addition to any form of stock market gambling , er again I mean reputable investing.

Seems the only way to check is open an account with each and look at the platforms.
If anyone has a self select shares ISA and it has this functionality could they let me know please.

Trading 212 customers have been asking for this since 2020 but I don't know if they ever got it.

masonic

Most don't (Hargreaves Lansdown, iWeb, AJ Bell, Fidelity all don't). I think Interactive Investor may have done from their acquisition of TD Direct (but switching out at the moment so can't check as all my holdings are gone). Failing that, Interactive Brokers has the most feature rich offering I'm aware of, so might have this. I think you can probably contact them to ask about it without having to open an account.

Nardge

Dear Forumites,

Below is my current Portfolio:

I now have a further £80K to invest.

Desirables are:

Global reach
Accumulation
Invest and Forget
Low cost & Good return
FSCS Cover & therefore UK domiciliation
GBP variant

I also wish to remove the UK Bias inherent to LifeStrategy, together with the Bonds, and promote greater Portability.

InvestEngine and Trading 212 have both received great praise and are the cheapest.

I have put together the below table:As per previous, I’ve 180K to invest.

I wish to sell my LifeStrategy (UK Bias, Bonds, Portability). The bulk of the proceeds (£85K) will be reinvested as a combined VHVG (9)/VFEG (1) split within Vanguard itself. These can then be transferred in specie to InvestEngine, which hosts a rebalancing facility. The other £85K will be invested as a series of very large lump sums into Invesco's FWRG at Trading 212, over a period of about a year. Evidently I’d still have £10K. This could be kept within Vanguard’s VHVG/VFEG. Furthermore, I could use Vanguard's platform for future ongoing monthly contributions.  

This raises various questions:

Re: Selling Vanguard LifeStrategy with reinvestment into Vanguard VHVG/VFEG

1)       As it’s within the same firm, I assume it takes 24 hours?

2)       Could I sustain a significant loss, or could the £102,094.54 be reinvested without issue?

Re: Transferring Vanguard VHVG/VFEG to InvestEngine VHVG/VFEG

3)       The key consideration is the time the money would be out of the market? How long does it take?

4)       Are there any other considerations?

Re: FSCS & Diversification

I’ve found the relevant information conflicting/contradictory/difficult to understand. Apparently:

·        FSCS covers £85K in the event of platform failure only

·        FSCS covers Index Funds only when domiciled in the UK, and never ETFs

5)       Why don't people avoid ETFs if there’s no FSCS cover on them (all appear in Ireland)?

My above plan achieves both platform and ETF diversification. However:

6)       Is ETF diversification unnecessary/inadvisable?

7)       Is there much mileage in diversification by Index too?

8)       If 85K of VHVG/VFEG are at InvestEngine, and 10K at Vanguard itself, are the 95K covered since they're split across platforms?

9)       Are MSCI ACWI index and MSCI ACWI IMI index less popular than FTSE All-World Index and FTSE Global All Cap Index? If so, why?

10)    When my LISA (as S&S) and SIPP are set up, should I choose A') Platforms B') ETFs C') Indices which differ to those I'm choosing above?


Thanking you in advance for any guidance and responses you may have,


With Kind Regards

dunstonh

1)       As it’s within the same firm, I assume it takes 24 hours?
2)       Could I sustain a significant loss, or could the £102,094.54 be reinvested without issue?
Re: Transferring Vanguard VHVG/VFEG to InvestEngine VHVG/VFEG
3)       The key consideration is the time the money would be out of the market? How long does it take?
4)       Are there any other considerations?
Re: FSCS & Diversification
I’ve found the relevant information conflicting/contradictory/difficult to understand. Apparently:
·        FSCS covers £85K in the event of platform failure only
·        FSCS covers Index Funds only when domiciled in the UK, and never ETFs
5)       Why don't people avoid ETFs if there’s no FSCS cover on them (all appear in Ireland)?
The preceding achieves both platform and ETF diversification. However:
6)       Is ETF diversification unnecessary/inadvisable?
7)       Is there much mileage in diversification by Index too?
8)       If 85K of VHVG/VFEG are at InvestEngine, and 10K at Vanguard itself, are the 95K covered since split across platforms?
9)       Are MSCI ACWI index and MSCI ACWI IMI index less popular than FTSE All-World Index and FTSE Global All Cap Index? If so, why?
10)    When my LISA (as S&S) and SIPP are set up, should I choose A') Platforms B') ETFs C') Indices which differ to those I'm choosing above?

1 - No.  

2 - potentially if you are unlucky.  If your platform prefunds, then less likely.  If it waits until settlement, then the odds increase but still need to be unlucky

3 - 2-3 days if no prefunding and not moving platform.

4 - Direct assets don't get FSCS protection.  So, shares, EFTs and ITs do not get FSCS protection.      Platform FSCS protection only covers the platform.  Not the investments.  i.e. if a platform failure results in a loss, then up to £85k is the limit.   However, it works differently with platforms as the up to £85k goes against the costs of the administrator to sort the company out as the assets still retain their value and are unaffected by the platform going tits up.

5 - People do avoid them.    The regulator, FOS and PI insurers treat them as a higher risk than UT/OEICs.  Mainly on the back of no FSCS protection and the risk of synthetic replication.  Since the unbundling of charges, there is often no need to use ETFs to get the best price any more.     So, the main reason for ETFs has gone away.   That said, there can be more choice with ETFs if you want to go off the beaten track.

6 - depends on the ETFs in question. (that would apply to UT/OEICs in the same way)

7 - It depends on how you are investing.   i.e. a single global tracker vs you building the portfolio using single sector funds (sector as in country/region specific).   Building your own can be cheaper than a global tracker but needs more work.

8 - £85k is per fund house in respect of funds.   and per platform in respect of platforms.  e.g. if you hold ten lots of different Vanguard funds at £10k each across multiple platforms, then don't get £100k of fund protection.  You get £85k in total but you would have £100k of platform protection.

9 - personal choice.   Whichever you choose, you shouldn't mix and match as classifications under MSCI and FTSE Russell as not aligned.  e.g. FTSE Russell have south Korea as developed and MSCI have it as emerging.    There are others where they differ.   I use FTSE Rusell and can achieve coverage with UT/OEICs.

10 - You should decide how you are going to invest first (investment strategy/style), then which investments you are want to facilitate that.  And then finally, which platform offers those investments and the functionality are you are looking for.   Remember that platforms are about service and software.   No single platform does everything optimally. Each has quirks.  If those quirks are not a concern to you or in areas you don't see, then great.  If they frustrate you then you will get fed up with them.    Beware of platforms that are not profitable and have higher than normal exposure to illiquid assets.   A platform failure is unlikely with mainstream platforms with low volumes of illiquid assets.    However, the platforms that have failed have had higher volumes of illiquid assets.     Other platforms are not interested on buying platforms, even on the cheap, if there is a high volume of illiquid assets.  

Alexland

Nardge said:

InvestEngine and Trading 212 have both received great praise and are the cheapest.

If you have a preference for FSCS protection is there any reason you are not using a traditional fund on iWeb for at least some proportion of the assets? Being backed by Lloyds/Halifax then I would consider them to be a lot more established than InvestEngine or Trading 212. While there is a small risk I have personally been using ETFs from reputable fund managers on established platforms for years.

2)       Could I sustain a significant loss, or could the £102,094.54 be reinvested without issue?

I've found that once an investment gets to six figures it tends to cost noticeable money to touch it in any way through time out the market, bid/offer spread, etc (although sometimes you get lucky) so my advice is to change your investment choice infrequently and be careful on the price you pay on the ETF units as if you trade at the wrong time or there is insufficient market liquidity as it's a niche ETF then it can cause your new investment to show in the account hundreds of pounds below the price you pay.