Advice: Charles Stanley ISA Charges Eroding My savings!

bobdon

Hello,

I have 250 shares in Santander that I got many years ago when Alliance & Leicester went public.
These shares were invested in a stocks and share ISA with Charles Stanley and I planned to keep them for a rainy day.
All seemed ok even though the share value was a nice price years ago. But now I am getting concerned about the fees that are being charged and that they will eventfully erode my savings into nothing.
These are the charges for this half year:
Isa Adminstration charge Invoice £15
Isa Adminstration charge Invoice VAT £3
Service Charge Invoice £75
Service Charge Invoice VAT £15

I'd like to call Charles Stanley but find the prospect rather daunting. I must confess that I can't really get my head around their statements, and according to members of my family that had the same shares, they have merely come away with the advice 'you may as well sell them then!'
So before I do call them I'd like to ask for some advice as to what to say and do? Also whether I can just close my account and have someone else look after my shares?

I would be happy to post some images of my statement if it would be easier to give advice.

Thanks for your time.

masonic

Just transfer the ISA to a cheap execution only broker, such as X-O or SVS Securities. Neither of these charges a fee for simply holding shares within an ISA.

Ifts

bobdon wrote: »

Also whether I can just close my account and have someone else look after my shares?

As mentioned by previous poster you can transfer them to a Stocks and Shares ISA with a different execution only broker that does not charge you any money each year just to hold your shares.

I use X-O.co.uk myself for my S&S ISA - who don't charge any account opening fees, management fees or inactivity fees etc so they will be free to hold for you and easier to sell at £5.95 flat rate per trade if you ever decide to.

If you opened it with someone like X-O then they can collect your shareholdings held elsewhere, it works like this:

How do I transfer in stock from another broker?
Simply download a transfer form by clicking here and then complete, sign and return it to us. We will then contact your broker and make arrangements for the transfer of your stock.

http://www.x-o.co.uk/how_to_use.htm#6

So before I do call them I'd like to ask for some advice as to what to say and do?

If I was you and wanted to keep these shares in your S&S ISA for free, then I would fill in the details on the form in above link (see above link, Q.6 about transferring shares) then let the new ISA provider complete the transfer on your behalf* - do remember to complete the ISA Transfer bit in box 3 and where it asks you 'I wish to transfer my account' select 'in shares'.

* Your old S&S ISA provider may apply a charge for closing the old account.

jimjames

If these are the only shares/investment you hold then I'd really suggest looking at whether you'd be better off putting the money in a fund instead. The risks (and costs) of holding a single share are far more than having something invested across the market such as an index tracker.

Kendall80

Following on from what Jim said. If I'm not mistaken the only charge you'd be subjected to if you followed his suggestion is the annual platform charge (0.25% of the total balance). Assuming within an ISA.


...edit: Also the specific fund management charges

bobdon

Many thanks for all your advice . I will certainly look into the sites suggested.

bobdon

jimjames wrote: »

If these are the only shares/investment you hold then I'd really suggest looking at whether you'd be better off putting the money in a fund instead.

Thank you. Excuse my naivety but are you suggesting I sell them and stick the cash somewhere else?

le_loup

No. They are suggesting that you reduce your risk - very high at the moment with a one share investment and sell it and buy a fund with lots of holdings so that you reduce your risk of catastrophic loss.

bowlhead99

bobdon wrote: »

Thank you. Excuse my naivety but are you suggesting I sell them and stick the cash somewhere else?

Yes! Although that cash that you get from selling them doesn't have to be kept as cash in a bank account doing nothing, it can be cash in another type of investment, within a Stocks & Shares (investment) ISA at Charles Stanley or elsewhere.

It sounds like these are your only shares and you didn't buy them because you thought Santander was the best company in the world for you to go and invest in after considering all the banks and all the other types of company listed in the UK or on the planet generally. You have just ended up with them after they were given to you. You are not a professional investor or even an enthusiastic amateur who knows what he/she is doing.

So, holding £1000-£1500 worth of these shares which might be worth less than half that next year, seems to us to be a bit of a risk, a complete gamble.

So, while you are moving them to a cheaper platform for safekeeping, that doesn't charge ongoing high fees, you could consider whether owning a few shares in a Spanish bank is what you really want to do with your £1000-£1500.

If you don't need the money back particularly, you might consider instead to invest in a fund that invests in a portfolio of companies. That way you still only own shares in one 'thing', but that thing is an investment fund. The fund manager takes your £1000 alongside everyone else's £1000 and buys a big portfolio of investments with the money spread across lots of companies (maybe including Santander, but also including and Lloyds and HSBC and Shell and Apple and Microsoft and Sony and BT and all the other household names you can think of).

You might end up with only a tenner in each underlying company but if Santander shares end up being worth £2 a share instead of £5 a share next year it doesn't really matter because while Santander went down, other things went up. Overall you still make money in the long term but you don't have all your eggs in one basket.

Whether you do this via Charles Stanley Direct or some other lower cost service is up to you. But if you are changing providers it does make sense to have a think about why you are even holding those specific shares that you hold. If you can't think of a good reason, other than "well, I've had them a while so I'll see what happens if I hold them for longer", I would change them for a more diversified investment that is unlikely to become worthless if that particular bank happens to have a bad year. Or, just sell up and put the cash in a bank account for a rainy day.