Stocks & Shares ISA - HL

Bmth100

Morning, newbie here.

I've been meaning to get into some form of investment and was looking at HL who let you open an S&S ISA from £25 a month by DD.

Is this a good place for a newbie - who wants to dip his toe in the water - to start? I appreciate that there's a yearly fee of 0.45% but that's fine. My main concern would be whether it's possible to lose or owe more than you deposit?

Any other general advice about this or better ideas for a newbie?

bowlhead99

Bmth100 wrote: »

Morning, newbie here.

I've been meaning to get into some form of investment and was looking at HL who let you open an S&S ISA from £25 a month by DD.

Is this a good place for a newbie - who wants to dip his toe in the water - to start? I appreciate that there's a yearly fee of 0.45% but that's fine.

The yearly fee of 0.45% is higher than nearly all other percentage-based providers.

But after a year of £25 a month you will only have about £300, and moving from £0 to £300 a year your average will have been £150, and 0.45% of that is a fee of less than a pound. Even with ten times the amount it's under a tenner. So if you have reviewed the options for different providers and are happy with what HL has to offer I would agree there's no need to pick somewhere different on grounds of cost. You could always switch providers when you have more money invested.

My main concern would be whether it's possible to lose or owe more than you deposit?

Not really.

If you used the ISA to buy shares in one individual company, and it went bust and became worthless, you would still owe the 0.45% fee billed in arrears. So, technically I suppose you could lose more than you put in.

However, I suspect they would probably not chase you through the courts for the (less than a pound) that you owed them.

And more importantly, as a newbie with no other investments and only relatively small amounts to invest - you should not be buying shares in individual companies that could go bust, you would be buying investment funds which spread your money over tens or hundreds of companies around the world, so you won't be risking a total loss.

Bmth100

bowlhead99 wrote: »

The yearly fee of 0.45% is higher than nearly all other percentage-based providers.

But after a year of £25 a month you will only have about £300, and moving from £0 to £300 a year your average will have been £150, and 0.45% of that is a fee of less than a pound. Even with ten times the amount it's under a tenner. So if you have reviewed the options for different providers and are happy with what HL has to offer I would agree there's no need to pick somewhere different on grounds of cost. You could always switch providers when you have more money invested.Not really.

If you used the ISA to buy shares in one individual company, and it went bust and became worthless, you would still owe the 0.45% fee billed in arrears. So, technically I suppose you could lose more than you put in.

However, I suspect they would probably not chase you through the courts for the (less than a pound) that you owed them.

And more importantly, as a newbie with no other investments and only relatively small amounts to invest - you should not be buying shares in individual companies that could go bust, you would be buying investment funds which spread your money over tens or hundreds of companies around the world, so you won't be risking a total loss.

Thank you for the detailed answer.

Though I imagine this will be detailed in a lengthy FAQ somewhere here, hopefully you won't mind me asking: at such small amounts, though with full intention to play the long game and invest more in future, are S&S ISAs generally better than regular ISAS?

Voyager2002

Bmth100 wrote: »

Thank you for the detailed answer.

Though I imagine this will be detailed in a lengthy FAQ somewhere here, hopefully you won't mind me asking: at such small amounts, though with full intention to play the long game and invest more in future, are S&S ISAs generally better than regular ISAS?

You can very easily find the interest rates that are paid on cash ISAs, and personally I feel that these rates are so low that it is not worth the trouble of filling in an application form.

A stock-market based investment may perform rather better than this, depending obviously on what investments you choose and what the markets do over the next few years and -- crucially -- on your decisions. A bonus is that by making these investments you will learn more about the markets and so, by the time you have larger sums to invest, you are likely to make better decisions.

atilla

As a comparison, Barclays Bank investment ISA charge a fee of 0.25% a month.....with a minimum fee of £4.

Sensible advice above, avoid individual shares, invest in funds and spread the risk. Whilst you pay a tiny bit more in fees, you might want to look at the HL funds themselves. These invest in other funds so you get a broad mix whilst leaving HL to do the managing.

jimjames

atilla wrote: »

Sensible advice above, avoid individual shares, invest in funds and spread the risk. Whilst you pay a tiny bit more in fees, you might want to look at the HL funds themselves. These invest in other funds so you get a broad mix whilst leaving HL to do the managing.

I agree with the first bit but certainly don't think it's a good idea to use HL funds. They are massively expensive compared to alternatives such as Vanguard LifeStrategy series or other multi asset funds. There are much better, cheaper alternatives to all their own fund options.

TheShape

I haven't actually got around to opening it yet but was intending to open a new S&S ISA with Charles Stanley Direct. 0.25% charge when holding funds.

Minimum deposit is £50 p/m though.

RobStaffs

I have been with HL for around 7 years and only invest in funds. I actually invest in a number of HL Managed funds and by comparision to others they are expensive. However I am averaging out at a 44% return before the HL charge. The best performer is 75%. I am constantly looking at their performance on a bi annual basis but I feel I am getting a good deal.

Looking at 2017 I am re positioning other funds towards the US and India.Just bought into Jupiter India. With fund charges and management charges I always try to keep my costs below 1% but if I think the fund is worth it I will may more.

Martinslovechild

It's worth taking a look at Monevator's ISA online broker comparison.

As others have mentioned, HL are not the cheapest, but for a newbie I think that they're one of the best as their website is very easy to use, there are lots of unit trusts/investment trust options available and it works out pretty cheap for smaller-sized portfolios.

Once your portfolio reaches the £30K mark (a while away, granted), you should then look at transferring it to a cheaper provider such as Interactive Investor, who charge a fixed £20/quarter rather than a percentage-based fee.

Doshwaster

RobStaffs wrote: »

I have been with HL for around 7 years and only invest in funds. I actually invest in a number of HL Managed funds and by comparision to others they are expensive. However I am averaging out at a 44% return before the HL charge. The best performer is 75%. I am constantly looking at their performance on a bi annual basis but I feel I am getting a good deal.

Looking at 2017 I am re positioning other funds towards the US and India.Just bought into Jupiter India. With fund charges and management charges I always try to keep my costs below 1% but if I think the fund is worth it I will may more.

I'm in a similar position with HL. I started with £50 a month which has developed into £200/month (plus the occasional lump sum) and with a total fund size of around £30,000.

I see some rocky times ahead so I'm considering getting out of Jupiter India and a couple of other higher risk funds and consolidating them into something safer.