Share dealing with HL

jm78

I have a S&S ISA with Hargreaves Lansdown and have so far only bought funds. I'm now interested in adding some shares, but HL's costs seem almost prohibitively expensive for small purchases.

For example, if I buy two lots of shares worth £250 each, I will be charged an £11.95 one-off dealing fee x2 (£23.90) and then an annual 0.45% on my share holding, so £26.15 in the first year, which is 5.23% of my £500 investment.

Am I missing something or is HL just really expensive for share dealing?

AnotherJoe

You are missing that it's pointless buying £250 worth of shares with anyone. Just not enough money to be worth the effort.

ColdIron

Buying small amounts of shares is rarely very cost effective wherever you do it. However HL allow you to buy shares in FTSE 350 companies and selected Investment Trusts at £1.50 a pop if you don't mind buying them at fixed dates with their monthly savings option

Although they apply the 0.45% annual charge to shares, ITs and EFTs it is capped at £45 within their ISA so it becomes cheaper after £10,000

HL can actually be quite cost effective outside an ISA as there is no annual fee at all. I have a large unwrapped IT portfolio for which they don't charge me a brass farthing

Bottom line, buying small amounts of shares just isn't worth it

jm78

Thanks for the helpful replies. Yes, I see, buying small amounts of shares isn't really cost effective. My idea was to drip money into the market as with funds, but it seems that strategy doesn't make sense for shares. I will rethink my approach!

SG27

Drip feed into funds for a few years then sell up and buy shares in bulk every now and then when you have a few thousand

colalba

you can set up a monthly savings plan with HL investing as little as £25 a month. Using this approach the share dealing charge is £1.50 per month.

Regular saving can be a great way of building up a large amount over time without really noticing and avoids the effort of timing the market.

However,I'd still suggest rather than an individual share you continue with funds which invest in a number of shares and spread your risk. If you set up a regular investment into a fund via HL there is no charge per trade.

http://www.hl.co.uk/investment-services/vantage-service/regular-savings

cashbackproblems

very expensive for share dealing when you include the platform fee. Especially compared to X-O who just charge £5 per trade then no other ongoing charges at all.

I used HL for funds but X-O for shares

ColdIron

cashbackproblems wrote: »

very expensive for share dealing when you include the platform fee. Especially compared to X-O who just charge £5 per trade then no other ongoing charges at all.

It's not that black and white

Far from being very expensive they can work out cheaper. If you are OK with fixed dates then the monthly savings option only charges £1.50 per trade with no platform fees/other ongoing charges either if you hold them unwrapped. For long term buy and hold there isn't much in it even within an ISA

cashbackproblems wrote: »

I used HL for funds but X-O for shares

Conversely HL are pretty much the most expensive platform for funds and nearly anywhere else would be much cheaper

Horses for courses, I do the exact opposite to you as regards HL

TheLastMongoose

ColdIron wrote: »

Conversely HL are pretty much the most expensive platform for funds and nearly anywhere else would be much cheaper

I am no expert but I think it does depend on the amount you are investing. For example, I am investing only small amounts, about £100 per month. Having done a little bit of research I haven't found another provider that I have been inspired to switch to. The platforms I have found that are clearly cheaper appear to have very limited selections of funds which puts me off, although for some people it would be ideal.

AJBell appears to offer an equivalent range of choice/services but when you add in the £1.50 per deal fee I don't think it would be any cheaper unless you are investing several hundred pounds a go and have several thousand in your portfolio.


Regarding the original question, you could use HL to access all the research about the stocks you are interested in and then use XO to actually buy and hold the shares. At £6 per trade buying even just a few hundred pounds worth of shares becomes a lot more worthwhile. I can't recommend it though as I've never used it.

ColdIron

EJS_Superted wrote: »

The platforms I have found that are clearly cheaper appear to have very limited selections of funds which puts me off

As I say it's not black and white and with a large pot you may want to look at flat fee providers. Certainly 0.45% of a small amount is still a small amount but with any luck it will turn into a larger amount in time. Check out Charles Stanley Direct as a direct competitor in the percentage market space. Same tiered fee structure, similar features and no transaction costs but 0.25% with a wide range of funds. Just a thought

slowpoke_rodriguez

Iweb now offer charge an opening fee of £25 per customer, and no holding charges, with dealing fees of £5 per trade, for funds or shares.
They have a very wide range of funds. I've only been unable to find one I wanted so far, so I hold it with Charles Stanley instead. They're good for foreign shares too, and have a similar range of tools, stop loss, etc to HL, who I also use for shares with no platform charge exept in the ISA.

I disagree about a couple of hundred quids worth of shares not being worth it. We all have to start somewhere.