first direct Stocks & Shares ISA?

MrManager

I recently came across FD's Stocks & Shares ISA which offers "no registration fee or annual management charge". However, the guide here on MSE suggests IWEB as the best buy, even though they have a 25£ sign up fee.

Is there any reason FD is not being suggested as an alternative?

I did see a notice on their page saying this:
"Your application for a first direct Stocks and Shares ISA only lets you invest in the current tax year so you'll have to complete a new application form for each new Tax Year."

Is that the catch? Does this mean I would have to sell and re-buy my stocks every year, paying the 11£ fee for every transaction?

andyboyo

All ISA providers are required to report details of ISA subscriptions made by their customers to HM Revenue & Customs (HMRC) so that HMRC can check that individuals do not exceed the limits each year.

That's the reason you have to apply each year. You can't carry over an allowance from a previous year.

Any stocks bought with a previous year's allowance do not have to be bought and sold each year.

I've got a FD stocks and shares ISA, it's a very limited basic service which is fine if you want to buy shares and basically just leave them sitting there, but they have no stop loss or other enhanced features that other platforms may provide.

Archi_Bald

andyboyo wrote: »

All ISA providers are required to report details of ISA subscriptions made by their customers to HM Revenue & Customs (HMRC) so that HMRC can check that individuals do not exceed the limits each year.

That's the reason you have to apply each year.

Applications have nothing to do with how much you actually deposit so applying afresh each year wouldn't solve the control of the limits.

I didn't have to apply each year when I had my S&S ISA with HL, and I don't have to re-apply at Halifax or iWeb.

Haven't seen the FD S&S ISA mentioned anywhere until tonight. I don't think many people use it, and it's not easy to figure out what you can and can't do on it without opening an account.

andyboyo

Ah OK I just grabbed that first paragraph off their website.

I think the reason it doesn't get mentioned much on here is that they changed the rules so there is now a requirement to have a current account with them to run a S&S ISA with them.

It's a basic website for UK listed shares with no dividend reinvestment, stop loss and the like. You buy/you sell that's about the extent of it. They may offer further services via the phone but I only keep my dividend paying shares in there which I'm unlikely to want to sell in a hurry. I have an offset mortgage with them they can see I have some sort of long term savings/investments.

SnowMan

MrManager wrote: »

Is there any reason FD is not being suggested as an alternative?

Is that the catch? Does this mean I would have to sell and re-buy my stocks every year, paying the 11£ fee for every transaction?

I would certainly recommend the First Direct (FD) sharedealing service. It has worked well for me over the past few years.

No custody charge (including no charge for the ISA wrapper) and reasonable dealing charges make it a good option for anyone with a FD cheque account.

x-o is worth considering also for a sharedealing account. They also have no custody charge for dealing and ISA accounts.

First Direct charge £11 for buying and selling shares/ETFs vs £5.95 for x-o, so x-o is a little cheaper.

iweb is a platform for holding funds (OEICS/unit trusts) also, and a very cheap one for holding funds, but FD is a pure sharedealing service.

If you are not using funds only shares/ETFs then the iweb ISA has cheaper buy/sell costs of £5. So after 5 buys and sells iweb is cheaper than FD (once the £25 opening charge is offset by the cheaper buying and selling costs).

If you plonk up to 15K in a FD sharedealing ISA this tax year and then purchase a single share (or ETF) then you will incur a £11 buy charge. On current charging if you sell in say 5 years time then you will incur a £11 sell cost, so total FD charge of £22. No need to sell and rebuy each year. But if you put some more money in next tax year then of course there will be a further charge to buy something with that. And if you buy more than one share then there will be more than one buy cost.