HL stocks and shares isa - investment advice

bowlhead99

joujou wrote: »

It is capped at 45 for shares. What do you do that hl becomes expensive for you? Thanks

If you are investing in open ended funds (oeics / icvcs, unit trusts) then the uncapped 0.45% a year - only reducing for new investments once you are already paying fees on hundreds of thousands of pounds worth of those funds - is getting on for twice the price of other percentage-based platforms.

For people just starting out whose only investment is a year's worth of ISA allowance, it's not particularly expensive to pay the 0.45% fee to hold funds with them, because it's only a few pounds a month more than the competition. But still, a fee getting on for twice the price of the competition is expensive. And at larger levels of investment it will become an even larger multiple of what you'd have to pay a flat fee provider.

And if your portfolio is composed of shares and investment trusts or ETFs, the £45 annual admin fee on a £10k+ pot for holding shares at HL is (for example) 50% higher than the £30 capped fee at Youinvest and infinity percent higher than the waived fee at TD Direct, two providers I use.

As this is a moneysaving site, HL often comes in for criticism on its fees, it's only at small values that they're tolerable really in the face of the competition. But those fees do pay for lots of customer service if you are the kind of customer who needs lots of customer service.

grey_gym_sock

it's amazing how an infinity percent difference in charges comes to less money than i have on me in cash

though i only use HL to hold shares etc in a taxable account, for which the annual charges are nil. (and also still own some shares in HL.)

Doshwaster

badger09 wrote: »

I think adonis10 was asking if you ever saw itemised management charges in the Virgin S&S ISA (not Hargreaves Lansdown):cool:

Ah - sorry, I misunderstood. No, I can't remember seeing any fees breakdown for Virgin but my understanding was that it was just a flat 1% which was taken into account with the unit price. 1% charge for a FTSE All Share tracker was very expensive.

roomaniac

For a novice investor like me, HL is a good option. It is not the cheapest, but has good support and information. The choice of funds may be daunting, but that is the point. With Virgin I had a choice between a small number of funds that did not perform very well and charged a high fee.
The HL Watchlist is a good tool to help you keep track of recommendations that you come across. it is a good idea to note and follow a fund for a bit, rather than jump straight in. The Times Money section has done well for me, but I usually wait until I have seen 2-3 recommendations before further investigation of a fund. Do look at the underlying holdings to help understand the risk.
I would not use HL to buy into individual shares. It is an expensive option for smaller investors. HL seem to be able to use their size to obtain discounts in the fees for many funds. However, make sure you are aware of the fees and any spread in buy/sell prices. More experienced investors will scoff that I even mentioned it, but for those new to fund and share picking, it is an obvious trap.

dunstonh

jimjames wrote: »

Are they able to remain bundled if they are selling direct with no platform?

Yes. Unbundling only applies to where third parties are involved (i.e. platforms and advisers)

bigadaj

roomaniac wrote: »

For a novice investor like me, HL is a good option. It is not the cheapest, but has good support and information. The choice of funds may be daunting, but that is the point. With Virgin I had a choice between a small number of funds that did not perform very well and charged a high fee.
The HL Watchlist is a good tool to help you keep track of recommendations that you come across. it is a good idea to note and follow a fund for a bit, rather than jump straight in. The Times Money section has done well for me, but I usually wait until I have seen 2-3 recommendations before further investigation of a fund. Do look at the underlying holdings to help understand the risk.
I would not use HL to buy into individual shares. It is an expensive option for smaller investors. HL seem to be able to use their size to obtain discounts in the fees for many funds. However, make sure you are aware of the fees and any spread in buy/sell prices. More experienced investors will scoff that I even mentioned it, but for those new to fund and share picking, it is an obvious trap.

I don't want to be too critical and you make some good points but this is quite a naive assessment.

HLs watchlist has historically been a recommendation based in their commissions or fees, so best to ignore.

HL actually isn't too bad for small investors, it is very expensive for larger investors in many circumstances.

The fee reductions touted by hl are generally lower than the increased platform fee they charge compared to others.

A huge range of fund options can be a problem for new investors, for many in this case the use of multi asset funds from large providers such as vanguard, fidelity, legal and general, black rock etc

HL are better than Virgin but that doesn't mean they are anywhere near the best, it's like saying Norwich are better than Bradford city in football terms, whilst ignoring man city, Barcelona, Bayern Munich etc

roomaniac

your points about the discounts are fair.

However, watch lists are just lists of funds or stocks that you want to note. HL does not create them or add their recommendations to them. That is more like their Wealth 150+ list or their recommended portfolio's, which you are right to urge caution on.
Watchlist are just a way to remember stocks or funds that you have being considering.

dunstonh

The HL Watchlist is a good tool to help you keep track of recommendations that you come across.

Can only echo the other responses who rightly state that it is a marketing list. It is not a recommendation list.

jimjames

dunstonh wrote: »

Can only echo the other responses who rightly state that it is a marketing list. It is not a recommendation list.

I think roomaniac is referring to the HL website functionality to monitor and track fund prices in a list without buying, not the Wealth150 marketing lists.

https://www.hl.co.uk/watchlists

bowlhead99

jimjames wrote: »

I think roomaniac is referring to the HL website functionality to monitor and track fund prices in a list without buying, not the Wealth150 marketing lists.

https://www.hl.co.uk/watchlists

Yes you're right, that's what he was talking about. Although in reality, lots of platforms have watchlist functionality, such as a couple I use (TD Direct at 0.3% on funds, nothing on shares; Youinvest at 0.25% (capped at £30 a year on shares). Those fees are 30-40% lower than HL for every pound invested, and there are others which can be cheaper still.

Third parties that offer watchlists and research tools for free include Trustnet or Morningstar.

I wouldn't disagree that HL offer a decent service and are welcoming to newbies who want to try to do their own research and watchlists and investment purchases and read the advertorial for various funds all in one place as a one-stop shop. If your charges are ~£50 a year because you only have £10k invested, it doesn't really matter that you could save a few tenners by going elsewhere, because a few tenners won't change your life.

It makes more difference when you have more money invested, because investment growth (rather than annual new money being put in) becomes the main thing that grows your portfolio, and you don't want to lose a tenth of your real terms investment growth to fees when other rivals would only charge you a twentieth.

In terms of narrowing down a fund choice:

it is a good idea to note and follow a fund for a bit, rather than jump straight in

Maybe if you are talking about 'a bit' being several years.

Generally if you have already reviewed a fund and manager's track record and reviewed the performance charts to see how the strategy historically performed compared to its peers over a full economic cycle of maybe 10 years, and you are satisfied with that, there is really very little to be gained to 'note and watch' a fund for a couple of weeks or months to make sure it continues performing within a performance range similar to how it did for the previous 10 years.

So to me it is not really about 'following' a fund for a while to see how it performs or what it does compared to its peers. But I would put something on a watchlist while I went and looked at other things in the sector or researched more about the sector. Having it on the watchlist means I can easily find it again if I still want it, and don't need to do the merry dance of working out which is the cheapest class available for that fund, all over again.

But I wouldn't put it on the watchlist after hearing about it in the Times to simply wait and have that 'validated' by reading advertorial about the same fund on HL and Trustnet. The fact that a fund manager is doing the rounds of the journalists this quarter and so his fund name appears a lot of places over a few weeks, may mean he receives a lot of new subscriptions which is then reinforced because of already being on the 'most popular funds this month' list. But that doesn't magically make it right for me to invest.