Halifax or Axa Self invest for ISA SS?

sadie7

Hi!
I am a complete novice on investment ISAs, but want to use my allowance before April. I have done some research and pretty much narrowed it down to Halifax or Axa Self invest as they seem cheap and straight forward, and I am already with Halifax also.
I don't want to do much self-juggling or spend much time on it (to start with at least) so would choose a low-medium risk fund.
I am grateful for any advice on these (or other?) platforms.

Thanks!

dunstonh

Which of them offers the best terms for the investment fund(s) you are buying and which of them offers the features you are looking for?

bowlhead99

sadie7 wrote: »

Hi!
I am a complete novice on investment ISAs, but want to use my allowance before April. I have done some research and pretty much narrowed it down to Halifax or Axa Self invest as they seem cheap and straight forward, and I am already with Halifax also.
I don't want to do much self-juggling or spend much time on it (to start with at least) so would choose a low-medium risk fund.
I am grateful for any advice on these (or other?) platforms.

Thanks!

The Axa self investor product (https://www.axaselfinvestor.co.uk/isas-and-more/our-stocks-and-shares-isa/) has a fee of 0.35% of your asset value each year., but no separate charge each time you buy or sell investment funds with the money that's inside the account. So on about £15k that's about £50, rising as you (hopefully) have a bigger value over the coming years.

The Halifax Sharedealing self select product (https://www.halifax.co.uk/sharedealing/our-accounts/stocks-and-shares-isa/) has a flat fee of £12.50 and then an additional £12.50 fee every time you buy or sell investments using the money in the account. If your needs are simple and you are only holding one fund and not adding new money each month to spend on more investments, that will be less than £50. Although if you were later going to later want to transfer out and take your business elsewhere, Halifax would charge you £25 per holding and Axa wouldn't charge you anything.

However, the charges above are just the charges for them administering the ISA 'wrapper' for you and handling the investment(s) you want to own. The investment funds that you would want to own in the wrapper will have their own costs which will differ from fund to fund, and the particular fund that you would like to hold may not necessarily be available at both places (or if available, might be a slightly different version with a slightly different price). As you can see from the above, a difference of 0.35% is worth £50 a year so even a difference of 0.1% annually on the same basic product is over a tenner. So you should look into what investments you would actually want to buy to hold in the investment.

But buying smart is not just about buying cheapest. Like dunstonh says it about making sure they have the service you want and that they offer the investment(s) you want. Sometimes the cheapest places do not have the same friendly people manning the phones 24/7 or any decent tools for reviewing and comparing different funds. If you know what you want from your independent research, and are only buying one fund so there's not much to go wrong, you won't necessarily care about that.

You would have a separate account for Halifax sharedealing than for your bank account, and the people across the counter in the bank won't know anything about any problems you are having using the investment service, so there is not much advantage in staying loyal to one particular brand. High street banks are not famous for their investment management offerings. Though for Halifax specifically, their 'sharedealing S&S ISA' offering seems OK, at least according to those here who use it as a cheap and cheerful service.

Note that Halifax also have an 'Investment ISA' option at https://www.halifax.co.uk/investments/our-investment-products/investment-isa/ which stands separate from the Halifax Sharedealing self select ISA, and has a very limited set of investment options (just 3 Scottish Widows funds).

Their service fee for that one is 0.25% a year (so a bit less than Axa at 0.35% but a bit more than Sharedealing ISA at "£12.50 + transaction fees") and then there's the cost of the fund on top. The difference with that one is that there is a very restricted choice of fund available instead of thousands.

If you are undecided and it will take you some time to decide and research what you want, one option is just to make sure you max out your £15240 ISA allowance this year by picking an instant access cash ISA and paying into that, and then at some point after April 5th just transfer it to whoever you decide to go with. That way you don't miss using the current year allowance, and leave your 2017/18 allowance intact.

sadie7

Thanks for your replies! I actually planned to just go for one of the "All-in-one" funds as they are called on Axa, or "managed growth funds" with Halifax/Scottish widows. Is this not such a good idea?

diamondchap

. The Halifax Sharedealing self select product has a flat fee of £12.50 and then an additional £12.50 fee every time you buy or sell investments using the money in the account

Worth noting that the "£12.50 every time you buy or sell investments" reduces to £2 for 'regular' (i.e. monthly) purchases.

bowlhead99

sadie7 wrote: »

Thanks for your replies! I actually planned to just go for one of the "All-in-one" funds as they are called on Axa, or "managed growth funds" with Halifax/Scottish widows. Is this not such a good idea?

For most inexperienced people investing a relatively small amount of money (e.g. £15k rather than £150k), the idea of putting all your money into a single fund which allocates your money into multiple asset classes (shares, bonds, property) all over the world, is absolutely the right thing to do. Far more sensible than buying ten separate specialist funds and juggling them around yourself.

However, there are absolutely loads of global mixed asset funds that do this. If you use a fund platform like Halifax Sharedealing or Axa Selfinvestor you can access hundreds of them.

The question is just whether to accept the ones they thrust in your face as the default internal options (e.g. Halifax Investment ISA gives you the three Scottish Widows managed growth funds; Scottish Widows like Halifax are part of Lloyds Banking Group ... Axa give you the five 'all-in-one' Architas MA Blended funds; Architas are a division of Axa).

Speaking generally, when people go to a bank or similar service provider and say 'give me the middle risk option of your standard in-house fund', they will get a worse result than if they had reviewed the whole of the market and found a medium risk fund with a decent track record relative to the fees charged.

Scottish Widows are not famous for putting together the best funds in the world for the lowest price in the world, and the Managed Growth 4 fund has only been running since 2014. Not much of a track record, and the Halifax Investment ISA front end website does not show you much detail about it other than a pie chart showing the general breakdown of shares to bonds to property and a pictogram showing it is lower risk than Managed Growth 6 and higher risk than Managed Growth 2.

Its ongoing costs (on top of the service fee paid to the ISA provider) are only 0.45% which is not massively expensive, but personally I would skip it and go choose something else from somewhere else because they are not telling me everything I want to know without doing lots of digging elsewhere, and I am an experienced investor who has made multi million pound investment decisions professionally so I am not scared off by lots of detail. But the Investment ISA section of the Halifax website is not trying to market to people like me, it is trying to present simple choices.

The Architas funds which you get over at Axa when you say "don't show me everything you offer, help me choose from your basic range", have longer track records and show factsheets with a 15 year chart. They are a fund-of-funds, so their portfolio is invested via other third party fund manager's products. If you are interested in their MA Blended Intermediate fund, you can open the factsheet to show the split of different types of underlying assets to which you would be exposed and the major holdings of third party funds that they have.

The third party investee funds which they use within the fund to maintain the portfolio are a mix of actively managed and passive tracker funds across various sectors. Running on a 'fund of funds' basis adds extra costs, so the fund has ongoing charges of 0.85% on top of the ISA provider's service fee; but the extra cost does not necessarily guarantee a worse result than the nearest equivalent Scottish Widows product, because the performance could be better and easily cover the extra costs incurred.

Shopping around you can find mixed asset funds or fund-of-funds with comparable levels of long term risk with ongoing charges from about 0.25% at the cheap end to over 1% at the expensive end; the costs are largely driven by a combination of whether they use cheap passive tracker funds as building blocks for their portfolio, or more expensive active management decisions, or a bit of both, and how much they think they can get away with.

So, yes it is a good idea to just buy one fund that suits your needs rather than try to buy a load of different funds and split your money between them. You only need one fund. Sometimes people come along and give opinions of their favourites as if you would be silly to consider anything else, but there are plenty of choices out there.

At the end of the day, a 0.1% difference in returns on a £15k pot is only £15 and will not change your life. But the difference accumulated over five years between two funds that are allegedly in the same 'risk' category but trying to accomplish things in different ways is very unlikely to be only 0.1% ; you don't know what it will be, otherwise you would pick the best one, but the difference over a multi-year timescale can easily be over 20% percent, which is rather more than £15.

That is why people say you need to take your time making decisions rather than picking out of a hat. But you could spend all the time in the world on researching it and you are not going to magically save yourself ten grand over a few years - because the differences between the default 'medium risk' fund choices at an ISA provider and some averagely better 'medium risk' fund you could have picked with hindsight, is not going to be ten grand on a fifteen grand investment. With relatively small pots, the exact asset allocations don't make lifechanging differences to the outcome as long as you are using a broad mix of assets from a proper regulated investment manager.

racey

Axa Self investor currently have no platform fee for 12 months.
Follow this link for details:
http://www.moneysavingexpert.com/savings/stocks-shares-isas#axa1

sadie7

racey wrote: »

Axa Self investor currently have no platform fee for 12 months.
Follow this link for details:

Thanks!
Sounds like the Axa Self investor is a good choice for now, as I can't see myself spending much more time on research..
Now, which "all in one" fund to choose!

bowlhead99

sadie7 wrote: »

Thanks!
Sounds like the Axa Self investor is a good choice for now, as I can't see myself spending much more time on research..
Now, which "all in one" fund to choose!

The middle one.

skybluearmyontour

You mention small investors above...is it worth putting £2500 in a S&S ISA? Potentially looking at Axa Self Invest as a first timer. My Virgin ISA is about to drop rate for the 3rd time down to 1.01% so looking at what to do with that.

I already have Santander 123, Nationwide Flex Direct & First Direct Regular Saver. I very rarely pay any money into my ISA because I get better interest elsewhere.

So yeah, wondering whether £2500 is 'worth it' or hold out at 1% and take that interest or lump it in an LISA in April.