Charges SIPPS and ISAs

Riversideman

Is your current stocks & shares ISA overcharging?

The info in today's money saving email is wrong. Both ISAs (and SIPPS) can be invested either in funds (unit trusts) or stocks and shares ( which would include investment trusts ) . The charging structure for the two types of holding are different on all platforms.

The charging structure for funds with Hargreaves Lansdowne ( not stocks and shares ) as contained in today's email is correct, however you have termed it "stocks and shares" which is incorrect. HL's stocks and shares ISA charge is .45% but is capped at £45 per year no matter what size the holding. That's an important difference.

Additionally it might be very useful to point out to your readers the similarity between unit and investment trusts (often managers run both a unit trust and an investment trust with essentially identical holdings) , the discount that many investment trusts trade at ....meaning you can buy stocks at less than their true value.....and that the charges for holding broadly similar investments in investment trusts within a SIPP or ISA are very much lower than would be the case for unit trusts.

dunstonh

The info in today's money saving email is wrong. Both ISAs (and SIPPS) can be invested either in funds (unit trusts) or stocks and shares ( which would include investment trusts ) . The charging structure for the two types of holding are different on all platforms.

That is not correct if I interpret what you are saying right. Whilst some platforms will have different charges for ISAs and SIPPs, others do not charge differently for ISAs and SIPPs. Most also link them for charging purposes (so the combined value dictates the charging tier).

HL is actually one of the few that doesnt link accounts.

Additionally it might be very useful to point out to your readers the similarity between unit and investment trusts (often managers run both a unit trust and an investment trust with essentially identical holdings) , the discount that many investment trusts trade at ....meaning you can buy stocks at less than their true value.....and that the charges for holding broadly similar investments in investment trusts within a SIPP or ISA are very much lower than would be the case for unit trusts.

its not quite as simple as that though. ITs are generally classified as higher risk than their comparable UT/OEIC. They are also treated as a more experienced investor product by the FOS due to additional things to be aware of over UT/OEIC. You mention buying at discount but its just as easy for an inexperienced investor to buy at premium.

MSE doesnt get involved in regulated investments.

The charges are not much lower than UT/OEICs. They are broadly similar and many are now more expensive.