Selv invest ISA - our experience (good and bad)!

Hitch21

We’ve just taken our first step into a self invest, or ‘DIY’ ISA. It hasn’t been as straightforward as we’d hoped. After some perseverance though, we’re pleased we did as we aim to take a bit more control over our financial destiny. Once you get the basics, things are less opaque or daunting than you might think. Here’s just one family’s experience. Hiccups and all. We hope you find it useful if you’re on a similar journey of deciding if this is, or isn’t for you.

The fact we’ve only just done this, days ahead of the 2015 deadline lays bare the truth that we’re not sophisticated investors. And according to the providers we talked to, we’re not unusual in that respect.

We’re relatively comfortably off in a ‘middle-England’ kind of way, largely as a result of not being cavalier with our money. And still believe an ISA is one of the most efficient and essential pieces of personal planning. We’ve always trusted an IFA for our overall financial future, but press articles, notably in the Daily Telegraph, began to seed a nagging doubt about the cumulative cost of potentially avoidable commissions. Seemingly tiny fractions of percentages actually mean a lot in the long term. And the real value to us of paying IFA fees in terms of ISAs – given how much good research and advice is out there – started to become questionable.

So, we entered the dark world of ‘which online platform to choose’. I now have a much better idea of what a ‘platform’ really is than I did 48-hours ago: Essentially it’s the relationship between you and access to wherever you place your money. We never wanted to become part-time stockbrokers and initial glances at self investor websites suggesting we ‘open a trading account’ (raising the prospect of sitting up all night checking on the price of pork belly futures or Brent Crude) were rather daunting. After further relatively unscientific online search of more consumer friendly options however, we chose four providers to compare and contrast. [They are Hargeaves Lansdown, AJBell, TrustNet and WIllis Owen].

We selected three and after basic yet necessary personal and financial checks, registered with two (one, Trustnet, required autographed passports posted to them so that ruled them out due to our impatience and time constraints).

To us, Willis Owen and AJ Bell aren’t entirely household names in the same way that institutions like AXA and Legal & General are. So should we trust our very hard earned savings to relative strangers? Will they be a friendly and capable, someone to call for advice? All these intermediaries claim to thousands of satisfied customers and millions or billions under management. AJ Bell: 104,000 customers and assets under administration exceeding £23.7 billion. But on 25th February 1995 I suspect Barings Bank could have said something similar. Just not the day after that. So this really did raise concerns and family debates about risk and reward.

How they charge for the service aside, the best advice we can offer on choosing the right platform relates to a combination of what internet design people call UX (user experience) and what I call real personal service. In short, can you find your way around the site without a degree in IT; is it intuitive in the same way that our iPad is? We felt Willis Owen had the edge, but AJ Bell was pretty easy to navigate around, too. And…can you actually speak to someone if you need help?

The online help sections are good, but most providers and their platforms either seem to assume a level of competency that’s above that of first-timer, or appear to deliberately try and avoid telephone support. And (possibly due to the mad dash rush of thousands of last minute investors just like us) most attempts to call went unanswered, ringing off the hook…with the notable exception of Willis Owen who not only answered promptly but with an immediate human voice.

So based on Willis Owen’s general online reputation, the user-friendly platform with helpful online guidance and that personal support at the end of the phone, we chose them. Now all we had to do was transfer the money prior to making our investment choice (a topic for another time)...

Thankfully that all went smoothly as well, however a final note of caution if you’re leaving it until the last minute…transferring large sums can sometimes trigger sensitive banking fraud prevention systems to kick in, courtesy of the ubiquitous 3D-Secure system. This can cause immeasurable delays, so if you're reading this on Sunday night with two hours before deadline hour you have been warned!

Back to the present, we’re now the proud platform and fund managers of our 2014/2015 ISAs as self-investors through Willis Owen. What started as a slightly daunting process is now sorted and I feel we have both excellent value along with a real relationship that some direct/online solutions don't allow – surely the best of both worlds?

Good luck if you’re on the same journey. Going back to the iPad – that seemed a bit complex the day we unpacked it. We don’t really care what software that’s running either – just that it’s perfect for our family’s needs: Which is to make the new digital world a pleasure, not a pain, whether that’s for fun or for finances.

ktk

Thank you for posting this Hitch. I look forward to hearing what you have invested in!