Another fund platform question...sorry!

Dr_Wu

Hi

So, retirement lump sum in the bank and I'm ready to take the plunge into investments.

The plan is to invest 2 x £15K in two S&S shares ISAs for myself and my wife before Xmas and then squirrel away £500 pm across the same ISAs for the foreseeable future, planning to leave well alone for the next 10 years. (I've also got the required 'emergency' cash reserves and enough to think about another modest round of investments for the 2018/19 ISA year, but the above will do for now)

Thanks to the helpful advice and useful posts on here I'm going to spread the investments equally across 3 passive 'fund of funds' namely:

VLS 60 (inevitably!)
HSBC Global Strategy (balanced)
and L& G multi-index fund 5

so that's 10K into each asap and then £500 a month between them

The rational is that going for the 3 funds rather than just bunging everything into say VLS 60 is going to be ultra diversified.

I was just wondering what the good folks on here thought the cheapest platform to do this would be? Obviously they would have to offer the above funds but I'm not too bothered about fancy websites or great customer service because my investments are going to be pretty simple. I've had a look at the various comparison tools but I am acutely aware of my own ignorance when it comes to some pretty basic issues such as do my monthly investments into the funds count as a 'trades'? which I then might have to pay for?

Thanks in advance

chockydavid1983

A trade is any buy/ sell transaction so in this scenario you would be doing 3 trades per month

Glen_Clark

Can't help you with retail funds as I stick to ETFs and ITs as they are lower cost.
But a good place to look for a platform would be the Best Buy page of this website: (link) https://www.moneysavingexpert.com/savings/cheap-online-sharedealing?_ga=2.14774326.1017526747.1498207934-1345294851.1496851258

Novice_investor101

I have been thinking of getting a LISA but the confusing charges on AJBell put me off. The cost per trade seemed to suggest that if I pay in £250 a month to one fund, they will charge me £1.50 a month to buy the fund, plus the platform fee?
I really don't understand what they mean by a trade, does it mean a monthly buy into a fund or Switching & changing funds?. & It is more confusing as their charges info seems to suggest they don't charge any extra for having a monthly savings plan....?

chockydavid1983

Switching fund is 2 trades: 1 buy and 1 sell

Dr_Wu

At risk of answering my own question here but I'm leaning towards using the Halifax S&S ISA.
They seem to offer a 'Regular Investment Plan' which brings the cost of 'Trades' down to only £2.00.
I think I'll contact them to see if my own plan to drip feed the £500 pm across the 3 Funds would qualify.

digannio

What you should do is go through the platform comparison route and then contact the ones that come out best for your circumstances to see if they offer the funds you want. I know for a fact that Halifax don't offer the Legal and General fund that you want.

This might be useful in doing comparisons...http://www.comparefundplatforms.com.

It's just a question of going through the detail of each offer (dealing costs etc) to see which suits best and offers the best value for you.

AlanP_2

Uisng a percentage fee based provider might be the best option initially, no trading fees involved.

Fidelity via Cavendish charges 0.25% p/a on the pot value so it can be a cost effective option for relatively lower value pots, particularly where you are adding cash monthly and thus incurring dealing charges monthly.

The comparison sites / spreadsheets should help to identify suitable platforms for you.

Alexland

Dr_Wu wrote: »

I think I'll contact them to see if my own plan to drip feed the £500 pm across the 3 Funds would qualify.

To keep your trade costs (incurred each time you buy or sell each individual fund) down, given your fund choices are similar anyway, have you considered a strategy of alternating regular contributions? For example from April - 6 months into your account and one fund, 6 months into your partner's account into another fund etc so over 3 years you have drip fed for 6 months into all 3 funds in both accounts?

Also I can't get the L&G MI fund on my Halifax SD SIPP as Halifax have limited fund choice so you would need to pick a platform that offered all 3 funds if that's what you want.

TBH at that value I would stick to one or two. Maybe start with Vanguard Investor and VLS only? The total cost of platform and fund would only be 0.37% and the trades are included. Then in 3-5 years you might each have enough to be worth transfering out and trying other funds.

I mostly only have one multi asset fund in each account as it makes things very simple.

Finally have you considered recycling £2,880 per year into your or your partner's pension to age 75 for a potential small tax advantage and estate planning benefits? I am planning on recycling into my partner's pension as she is unlikely to have LTA or higher rate tax issues.

Alex

aroominyork

What is people's experience of Jarvis' share deal active site? Their ISA charge is £50pa and SIPP is free (£99pa refunded). I have just sent them a list of my current funds to see which they hold; it's a broad spread so I should get a good idea of the range they offer.

Dr_Wu

Alexland wrote: »

To keep your trade costs (incurred each time you buy or sell each individual fund) down, given your fund choices are similar anyway, have you considered a strategy of alternating regular contributions? For example from April - 6 months into your account and one fund, 6 months into your partner's account into another fund etc so over 3 years you have drip fed for 6 months into all 3 funds in both accounts?

Also I can't get the L&G MI fund on my Halifax SD SIPP as Halifax have limited fund choice so you would need to pick a platform that offered all 3 funds if that's what you want.

TBH at that value I would stick to one or two. Maybe start with Vanguard Investor and VLS only? The total cost of platform and fund would only be 0.37% and the trades are included. Then in 3-5 years you might each have enough to be worth transfering out and trying other funds.

I mostly only have one multi asset fund in each account as it makes things very simple.

Finally have you considered recycling £2,880 per year into your or your partner's pension to age 75 for a potential small tax advantage and estate planning benefits? I am planning on recycling into my partner's pension as she is unlikely to have LTA or higher rate tax issues.

Alex

Yes! I had considered just that (alternating regular contributions). Reassuring to hear that someone else thinks it's a good idea! Thanks to earlier helpful replies I had sussed that Halifax don't do the L&G fund and also that Cavendish is probably the cheapest platform offering all three.(the comparison tool certainly bears that out). In terms of pensions, I'll research what you have suggested, but what I AM going to do when I can, is top up the state pension to compensate for the fact that we were 'opted out' into the NHS scheme and so will 'only' qualify for about £125 per week when we hit 67 (I should have mentioned that I'm only 55 now and get the pension thanks to MHO status on the 1995 NHS scheme)

I know what you mean about keeping things simple (and cheap) with only one or two funds to start with, and especially at a (relatively) low value. Again, useful advice which I will think about (nice thing about being retired... lots of time to think about things!)