Thinking of starting S and S ISA next April

Cellar_Door

Hello everybody...as stated above I am thinking of taking the plunge and opening a diy Stocks and Shares ISA (but not until next April as I have maxed out this years)when I can start with £15 k.

I currently have £60k in a Santander ISA earning 2.3% and £50k in Santander savings (currently only 1% ouch) . Wife has similar. We are opening the 123 account each and one jointly to get £60 k sheltered in the savings option at 3% but feel the time may be right to prepare to get into the S and S ISA side of things.

So I am after some basic advice on who best to open up such an account with as a complete novice, how to actually go about it, how much will it cost (set up charges etc) and what risks to look out for.

I am not hoping for massive returns just something better than what we have at the moment and if I get the hang of things maybe I would move my existing ISA's across to the S and S platform.

I feel that if I can get some advice between now and next April I may be able to get my head around these investments and make a go of it.

Thanks

Cellar Door:)

kidmugsy

Cellar_Door wrote: »

So I am after some basic advice on who best to open up such an account with as a complete novice, how to actually go about it, how much will it cost (set up charges etc) and what risks to look out for....
I feel that if I can get some advice between now and next April I may be able to get my head around these investments and make a go of it.

I suggest two possible routes.

(i) Use a "platform" (i.e. online stockbroker) and use them to pursue a "passive" investment strategy, using the funds offered by, for example, Vanguard. To mug up on this become a reader of the monevator blog: stick at it and all will become (reasonably) clear. If not, enquire there or here.

(ii) Use an Investment Trust manager's own ISA: scroll down to p47 of

http://www.theaic.co.uk/sites/default/files/statistics/attachment/AICStats31Jul14.pdf

To see lists of the investment trusts managed by each firm look at p53. You can learn a lot about Investment Trusts (aka Investment Companies) here https://www.theaic.co.uk

jimjames

Any particular reason why you've not considered transfering part of your current ISAs to a S&S from cash rather than waiting till April? You don't need to transfer the whole lot so once you've decided on the right platform and funds then you can always get it started sooner if you want.

ikorodu

I too am new to the S&S ISA thing so what I have to say is not from a seasoned investor!

I have set up a S&S ISA with hargreaves landsdown.

I have transfered £15k in cash in and have chosen the tracker funds from their 'core tracker' range. My money is split as follows:

UK Gilts 26%
UK Equity 20%
US Equity 20%
Euro Equity 12%
Jap Equity 6%
Pacific Equity 6%
Emerging Markets 10%

My aim is to see a better longer term (10 year) growth than cash savings. As I have only invested as of today I have no idea if this will work!

HL do not charge for fund trasnactions, but do charge 0.45% of your holding. There are separate charges for each fund invested in.

Cellar_Door

jimjames wrote: »

Any particular reason why you've not considered transfering part of your current ISAs to a S&S from cash rather than waiting till April? You don't need to transfer the whole lot so once you've decided on the right platform and funds then you can always get it started sooner if you want.

Hi Jim...the santander isa is a two year one ...so is tied up until May 2016 and is a pretty good rate compared to others so I was leaving that there to complete its term...in the meantime I was going to get some advice pre April 2015 so I could put next years full allowance of £15k in a S and S isa and see if I got to grips with it. The next year (2016) if I had not made a complete horlicks of it I was then hoping to transfer the lot across from santander when it matures and when I had gained some confidence and knowledge.

Hope that makes sense.

Cellar Door:)

Cellar_Door

ikorodu wrote: »

I too am new to the S&S ISA thing so what I have to say is not from a seasoned investor!

I have set up a S&S ISA with hargreaves landsdown.

I have transfered £15k in cash in and have chosen the tracker funds from their 'core tracker' range. My money is split as follows:

UK Gilts 26%
UK Equity 20%
US Equity 20%
Euro Equity 12%
Jap Equity 6%
Pacific Equity 6%
Emerging Markets 10%

My aim is to see a better longer term (10 year) growth than cash savings. As I have only invested as of today I have no idea if this will work!

HL do not charge for fund trasnactions, but do charge 0.45% of your holding. There are separate charges for each fund invested in.

Thanks...so if I had the full £15k from next April in that fund is the cost 0.45% of the £15k? ( £67.50 per annum)

Would there be any other costs over the years it is invested in there and can the holdings in the fund be swapped around if they are underperforming...and is that free or at a cost?

Thanks

dunstonh

Thanks...so if I had the full £15k from next April in that fund is the cost 0.45% of the £15k? ( £67.50 per annum)

That is not a fund. It is a selection of funds. it is not the only charge. That is just the platform charge. The investment charge is on top.

Building a portfolio of funds on just £15k would be pointless and unnecessary and you are unlikely to have the knowledge and experience to carry out the correct asset allocation and rebalancing that would be required. using multi-asset solutions would be more appropriate for that sort of amount and your lack of experience.

Cellar_Door

Cheers Kidmugsy for the advice...will read up on those and see if it sinks in.

Thanks:)

Cellar_Door

dunstonh wrote: »

That is not a fund. It is a selection of funds. it is not the only charge. That is just the platform charge. The investment charge is on top.

Building a portfolio of funds on just £15k would be pointless and unnecessary and you are unlikely to have the knowledge and experience to carry out the correct asset allocation and rebalancing that would be required. using multi-asset solutions would be more appropriate for that sort of amount and your lack of experience.

You are spot on pointing out my inexperience. This is all a learning curve for me. What is a good safe example of a multi asset solution/s that I could consider?

Thanks

epicurate

The monevator site is extremely good at explaining in practical terms how to go DIY.

Start here and fill your boots:-

http://monevator.com/category/investing/passive-investing-investing/

It's given me the confidence to go DIY with a S&S ISA, and a large chunk of my pension. On top of that I also read Tim Hale's Smarter Investing, although to be perfectly honest 90-95% of the info in there is available for free on monevator.com.

As you go through the site you will find references to the Vanguard Lifestrategy product range, which is a low-fee, easy to maintain option which might suit your needs if you don't feel like getting to grips with multiple funds covering lots of different markets / asset classes.

kidmugsy

Cellar_Door wrote: »

Cheers Kidmugsy for the advice...will read up on those and see if it sinks in.

A bit more advice, Visit the websites of (i) Personal Assets Trust, and (ii) Ruffer Investment. Their reviews and reports, absorbed over the months, will educate and amuse you.

Here's an example.
http://www.patplc.co.uk/secure/documents/quarterly/73.pdf

and there are more here.
http://www.ruffer.co.uk/#ruffer/who-we-are/review-archive