Platform cost of s&s isa - vanguard lifestrategy

Ben12345

Appreciate I'm late to this (personal circumstances) but now keen to check the monitoring costs of my s&s isa with Hargreaves landsdown
I've got approx £35k in vanguard lifestrategy (and £3k in another fund) which is costing approx £14 per month.

Is this the best deal out there? If not, what are the costs of moving?
I quite like the h-l platform so happy to stay unless the saving is significant.

Thank you in advance

TCA

Here's the alternatives:

http://monevator.com/compare-uk-cheapest-online-brokers/

masonic

The cheapest option would be to pay iWeb a £25 account opening fee and have no further ongoing charges (but £5 per buy/sell). Alternatively, you could go along to Charles Stanley Direct and pay a little under £8 per month with free fund trading.

Moving costs (IIRC) are £25 per fund (might as well lump it all into lifestrategy for the move) and a £30 account closure fee.

It wouldn't be a huge saving for you yet, but as your ISA grows, so will the difference in cost.

ffacoffipawb

Ben12345 wrote: »

Appreciate I'm late to this (personal circumstances) but now keen to check the monitoring costs of my s&s isa with Hargreaves landsdown
I've got approx £35k in vanguard lifestrategy (and £3k in another fund) which is costing approx £14 per month.

Is this the best deal out there? If not, what are the costs of moving?
I quite like the h-l platform so happy to stay unless the saving is significant.

Thank you in advance

Try investment trusts in an ISA with H-L as the fee is capped at £3.75 pm (£45 pa). Can also be paid from a fund and share account so doesn't eat into the ISA. That's what I do.

Totton

Me too, hold IT's with HL for max £45 per ISA and £0 in the fund & share a/c

noggin1980

Arn't investment trusts for the most part going to be 2 or 3 times more expensive than the vanguard lifestrategy fund? so while he might be paying less platform charge he will be paying significantly more in charges overall?

SeniorSam

The H.L. Vanguard is not so bad, we have one each there.We also have an investment with Cavendish Online, as their charges are very low - Google it and decide yourself.

S&S selection is important and we have selected funds with Invesco Perpetual that have been doing well for many years. Look through the H.L. selections and select the best.

Sam

jimjames

noggin1980 wrote: »

Arn't investment trusts for the most part going to be 2 or 3 times more expensive than the vanguard lifestrategy fund? so while he might be paying less platform charge he will be paying significantly more in charges overall?

Doesn't that depend on amounts and which trusts?

masonic

jimjames wrote: »

Doesn't that depend on amounts and which trusts?

The TER of lifestrategy is 0.24%. There aren't many trusts with TERs of less than 0.5%, so ongoing management costs within a portfolio of trusts are likely to be at least double the cost of lifestrategy. It might be possible to cherry pick trusts with very low fees and realise a net saving, but I suspect if the trusts are picked on the basis of suitability, then there will be a net increase in charges even after taking into account the reduction in platform fee.

bowlhead99

jimjames wrote: »

noggin1980 wrote: »

Arn't investment trusts for the most part going to be 2 or 3 times more expensive than the vanguard lifestrategy fund? so while he might be paying less platform charge he will be paying significantly more in charges overall?

Doesn't that depend on amounts and which trusts?

Basically it is costing 0.45% for the platform and 0.24% for the LS fund. That's pretty much 0.7% all in.

If you hold ITs or ETFs, after the first £10,000 you pay 0% for the platform so it gives you rather more to spend on your actual fund. So you can pretty much afford to buy something that is '2 or 3 times more expensive' without being out of pocket and without moving platform. Of course, charges aren't everything when assessing the suitability of an investment so this is not a recommendation either way.

Ben12345 wrote: »

I quite like the h-l platform so happy to stay unless the saving is significant.

You are paying 0.45% of the value of your investment to your platform to let you hold it. As you'll see from TCA's link, you could instead be paying 0.25% (or even 0.2% plus transaction fees, or even 0% plus transaction fees plus account opening fees) by going elsewhere.

For most people, they would say halving your costs is 'significant' but if you don't mind giving £150 to £200 a year to HL because you 'quite like the platform', that's up to you.

The platform tells you how many units you have and what they are worth, and lets you buy or sell some. Every other platform out there does that too. It is the point of a platform. HL just know they will get away with charging nearly half a percent for it because of slick marketing.

All you are paying for is some editorial content which is available without even having an account, some graphs and charts which only go back 5 years and could be found elsewhere for free going back 20 years plus, and some well-regarded 'customer service' which sounds nice in theory but it doesn't take much 'customer service' to buy and hold a lifestrategy fund.

So, if all that is worth a couple of hundred pounds a year to you (ok, 0.45% on about £40k is only about £180 a year but your value will change over time and presumably upwards), then stay with HL. Otherwise pay the nominal one-time costs to move. You will still get the level of customer service you need, because you do not need very much customer service when your investment strategy is pretty much just buying and holding a couple of funds.

noggin1980

bowlhead99 wrote: »

Basically it is costing 0.45% for the platform and 0.24% for the LS fund. That's pretty much 0.7% all in.

If you hold ITs or ETFs, after the first £10,000 you pay 0% for the platform so it gives you rather more to spend on your actual fund. So you can pretty much afford to buy something that is '2 or 3 times more expensive' without being out of pocket and without moving platform. Of course, charges aren't everything when assessing the suitability of an investment so this is not a recommendation either way.

Sure but not being out of pocket wasn't the target, there was no indication that he wanted to go with investment trusts but it was suggested to him as a way to save on the platform charges. If he ends up paying the same (or even more which would be easy to do) he's gone to a fair amount of effort to end up with something different for no gain.

As you say in the second half of the post (well don't say but give him the information to decide himself) May as well go to the effort of moving to Charles Stanley Direct or someone with a flat fee charge unless he really loves HL.