Online Platform to Invest in Stocks

weenie15

Sorry to throw another one in the mix but AJBell YouInvest don't charge anything for their ISA, if you only hold ETFs, investment trusts and shares.

Also, since you plan on investing regularly, you can make 'regular investments' to purchase said ETFs, investment trusts or shares and it will only cost you £1.50 per purchase, instead of the usual dealing fee of around £10.

HL's 0.45% applies on all investments but for investments held in ETFs, ITs and shares, the fee on those is capped at £45.

So say you had £100k in your ISA and £50k is funds and the other in ETFS, the fee would be £225 (for the funds) and £45 for the ETFs, total £270.

FYI, I hold accounts with both HL and AJBell.

grey_gym_sock

are you only going to be investing via ETFs, or via funds (i.e. OEICs & unit trusts), or a bit of both? most providers have different charging structures for ETFs and for funds. i think some of the confusion comes from that.

bushido1

weenie15 wrote: »

Sorry to throw another one in the mix but AJBell YouInvest don't charge anything for their ISA, if you only hold ETFs, investment trusts and shares.

Also, since you plan on investing regularly, you can make 'regular investments' to purchase said ETFs, investment trusts or shares and it will only cost you £1.50 per purchase, instead of the usual dealing fee of around £10.

HL's 0.45% applies on all investments but for investments held in ETFs, ITs and shares, the fee on those is capped at £45.

So say you had £100k in your ISA and £50k is funds and the other in ETFS, the fee would be £225 (for the funds) and £45 for the ETFs, total £270.

FYI, I hold accounts with both HL and AJBell.

Thanks!!

What about if the £100k aren't in my ISA, and are in my taxable account. Would the same apply for both funds and ETFs then? Or there is not difference in fees when I have my money inside an ISA or in taxable?
What rates would I be paying then?

@gre gym: I am planning on investing all my money in VWRL and IWRD. I believe both to be ETFs.

JohnRo

Bushido are you sure you understand and are crystal clear about the the difference between the various mainstream investment types and which ones you intend to use initially and also in the future.

OEICs, UTs, ETFs, ITs, Shares etc. ?

As explained above by GGS that's where all the confusion seems to be coming from, different platforms have different charges for different amounts invested in different products and also in different ways. Once you're clear about the what and the how then it's relatively simple to apply a platform search filter based on cost.

What's a lot tougher is working out which platform will be to your liking in terms of things like access to and efficiency of customer service and their ability to resolve problems, which HL (as one example) score well on by most accounts but at a cost.
There's also other intangibles like which ones will let you see and interact with your account in the way you want it to etc..

I'm not entirely sure why the various platforms charge a relative fortune for administration of oeic and unit trust funds but assume it's because they have mountains of admin to do for them, where as a fund traded on a stock exchange doesn't require it because the exchange handles that for them.
That said the percentage charges seem like an excuse to tax wealth.

bowlhead99

If it helps, the confusion arose as the firms charge separately for different product types.

In post #4, JR gave the holding costs at 0.45% versus 0.25% on the approximate £100k of investment.

However, those are the fee rates for holding open ended mutual funds (OEICs or unit trusts) which are subscribed to, or redeemed out of, using a "fund platform".

If that is the type of investment you were holding, you would be paying £250 or £450 a year at the 0.25% or 0.45% rates on the £100k, because the fees for holding that type of investment are not capped until your balance reaches amounts much higher than £100k.

However, that is not the type of investment you propose to hold. You are not going to subscribe to an open ended fund on their fund platform. You are going to buy an exchange traded fund on the stock exchange, like you would buy a share of an individual company or an individual bond. So the fee scale relevant to you is the fee scale for buying things which are bought and sold on the stock market.

For that, the holding costs are different. CSD cap their 0.25% holding fee on that type of investment at £150 a year. HL cap their holding fee at £45 a year. Some other firms would not charge a holding fee at all.

With both of them you also pay per trade (£10 or £12 per). With CSD, if you do 6 trades on your account every 6 months, CSD will waive their £150 capped fee, but of course you are by that point paying £120+ a year in trading fees on the account. If you were only doing, for example, five trades a year you would only have a total cost of £105 at HL (0.45% capped at £45 plus (5x £12)). So it is not the case that CSD is almost half the price of HL. It depends how much trading you are doing. It is worth running your expected numbers against the fee scales published on the firms' respective websites.

weenie15

bushido1 wrote: »

Thanks!!

What about if the £100k aren't in my ISA, and are in my taxable account. Would the same apply for both funds and ETFs then? Or there is not difference in fees when I have my money inside an ISA or in taxable?
What rates would I be paying then?

@gre gym: I am planning on investing all my money in VWRL and IWRD. I believe both to be ETFs.

With HL's Fund & Share Account, it's the same 0.45% for funds but no charge for ETFs. http://www.hl.co.uk/investment-services/fund-and-share-account/charges-and-interest-rates

So if you just have ETFs in your taxable account, you're saving £45 compared to their ISA!

grey_gym_sock

for just ETFs, you can quite easily avoid all holding charges, i.e. just pay to buy or sell.

as weenie says, with HL there are no holding charges in a taxable ("fund & share") account, but there are in an ISA.

with td direct, you can probably avoid holding charge in both taxable account & ISA - they have slightly complex rules about whether there's a charge, so check, but i think you'll avoid holding charges by having a high enough value in the accounts.

ajbell youinvest have no holding charges, in either taxable account or ISA.

(all the above relates to holding ETFs.)

bushido1

bowlhead99 wrote: »

If it helps, the confusion arose as the firms charge separately for different product types.

In post #4, JR gave the holding costs at 0.45% versus 0.25% on the approximate £100k of investment.

However, those are the fee rates for holding open ended mutual funds (OEICs or unit trusts) which are subscribed to, or redeemed out of, using a "fund platform".

If that is the type of investment you were holding, you would be paying £250 or £450 a year at the 0.25% or 0.45% rates on the £100k, because the fees for holding that type of investment are not capped until your balance reaches amounts much higher than £100k.

However, that is not the type of investment you propose to hold. You are not going to subscribe to an open ended fund on their fund platform. You are going to buy an exchange traded fund on the stock exchange, like you would buy a share of an individual company or an individual bond. So the fee scale relevant to you is the fee scale for buying things which are bought and sold on the stock market.

For that, the holding costs are different. CSD cap their 0.25% holding fee on that type of investment at £150 a year. HL cap their holding fee at £45 a year. Some other firms would not charge a holding fee at all.

With both of them you also pay per trade (£10 or £12 per). With CSD, if you do 6 trades on your account every 6 months, CSD will waive their £150 capped fee, but of course you are by that point paying £120+ a year in trading fees on the account. If you were only doing, for example, five trades a year you would only have a total cost of £105 at HL (0.45% capped at £45 plus (5x £12)). So it is not the case that CSD is almost half the price of HL. It depends how much trading you are doing. It is worth running your expected numbers against the fee scales published on the firms' respective websites.

Thanks a lot for the help guys!!

I finally made the decision and will go with HL. They seem to have the best reviews, best service, website and also the best price in my case. Since I will be holding mainly all in ETFs (VWRL, IWRD, VGOV, and VUSA). And I will be applying a buy and hold strategy (Bogle style).

Now I have a couple of questions outside this:

1/ I see that HL offers two different accounts; Open an ISA, and Open Fund & Share account. Should I open both (if I want to start my ISA and also hold taxable ETFs)?
Would I be able to see how my ISA is doing through my Fund & Share account or would they be in two different accounts?
(I am obviously going to open an ISA but I don't know if I should have two accounts for this or just in one is fine. That's my confusion.)

2/ How is the process of putting money in a fund through an online platform. Do I have to first deposit money in the online platform and only then buy ETFs/funds? Or can I buy the ETFs/funds straight from my bank?

3/ Can I invest my money in dollars? Or should I convert to GBPs before to avoid a currency exchange loose.

bowlhead99

1) you will want both. Set one up, then open the second one as an existing customer. Some firms will allow you to simply check two boxes on the application form rather than two application forms. See how it is when you try. Either of those methods will end up with both able to be viewed from one logon.

2) you can't buy direct from your bank. You give money to the stockbroker firm of your choice and they buy and hold the assets for you.

3) Neither of those firms runs foreign currency accounts, they simply take GBP from you and hold it as GBP and then charge you a conversion fee to buy any dollar or euro assets out of that available GBP. Legally an ISA cannot hold foreign currency cash as it is not a permitted investment type; such a restriction doesn't apply to normal taxable accounts, but many providers don't want to offer that service.

weenie15

bushido1 wrote: »

Thanks a lot for the help guys!!

I finally made the decision and will go with HL. They seem to have the best reviews, best service, website and also the best price in my case. Since I will be holding mainly all in ETFs (VWRL, IWRD, VGOV, and VUSA). And I will be applying a buy and hold strategy (Bogle style).

Now I have a couple of questions outside this:

1/ I see that HL offers two different accounts; Open an ISA, and Open Fund & Share account. Should I open both (if I want to start my ISA and also hold taxable ETFs)?
Would I be able to see how my ISA is doing through my Fund & Share account or would they be in two different accounts?
(I am obviously going to open an ISA but I don't know if I should have two accounts for this or just in one is fine. That's my confusion.)

2/ How is the process of putting money in a fund through an online platform. Do I have to first deposit money in the online platform and only then buy ETFs/funds? Or can I buy the ETFs/funds straight from my bank?

3/ Can I invest my money in dollars? Or should I convert to GBPs before to avoid a currency exchange loose.

1) When you log into HL, you will be able to see all the accounts you have opened with them, so if you open an ISA and also a Fund & Share account, you will be able to see them both under the same HL login.

2) You can add funds via Debit card so that the money appears as cash in your ISA/taxable account and then you choose what ETF to invest in with that cash.
Or, you can set a regular investment instruction, so that the money is taken out of your bank to purchase your choice of ETF. Finally, a regular investment instruction can also just be cash, so like in the first point, you decide later what you want to invest in.

Note that all ETF purchases with HL will be subject to the standard dealing charge.

I only invest in GBP so can't answer question 3) although I would have thought it unlikely, especially the ISA, which requires UK residence, unless I'm misunderstanding your question?