New to investing

heytoki

Hello all,

Two years ago i bought a flat and i have been saving money since then. Now i have reached the amount in cash i consider enough should something happen (major works in the flat, losing my job, etc) so from now on i would like to invest some of my monthly income (not from my savings).

I am completely new on this so firstly if i am asking something that doesn't make sense, apologies for this.

I am looking to open a Stock and Shares ISA and i would like to know how this kind of ISA works. My understanding is that i open the account and i am given access to a platform where i can put my money in Shares or Funds right? Then i will be charged every time i buy/sell or move the funds around.

I am planning to put my money in funds rather than shares and i am not here to ask what fund/s should i go for. What i want to know is how the platform will tell me which funds are available. Are they categorized as High/Medium/low risk?
If i choose a fund,, does it have a life span? e.g. 15 years or can they go on and on..

P.S. The platform i have looked at it is Charles Stanley because i saw that is cheap and easily to navigate

Thanks

pip895

Charles Stanley are fine and don't charge you to invest(trade) in funds. Do you know how much you will be saving monthly? I know HL will let you invest as little as £25/month.

The usual advice on here is to pick a multi asset fund like Vanguard life Strategy from (20% to 100%) equity versions available depending on your risk appetite. There is no end date and if you are looking at 15 years VLS60 or VLS80 would be good choices as they will/should give you good growth but with some safety built in.

AnotherJoe

heytoki wrote: »

Hello all,

Two years ago i bought a flat and i have been saving money since then. Now i have reached the amount in cash i consider enough should something happen (major works in the flat, losing my job, etc) so from now on i would like to invest some of my monthly income (not from my savings).

You could consider investing in your pension first

I am completely new on this so firstly if i am asking something that doesn't make sense, apologies for this.

I am looking to open a Stock and Shares ISA and i would like to know how this kind of ISA works. My understanding is that i open the account and i am given access to a platform where i can put my money in Shares or Funds right? Then i will be charged every time i buy/sell or move the funds around.

That is correct though there may not be a charge for funds think of it just as wrapper in which you hold your investments

I am planning to put my money in funds rather than shares and i am not here to ask what fund/s should i go for. What i want to know is how the platform will tell me which funds are available. Are they categorized as High/Medium/low risk?

Not directly but there will be ways to do that such as reading the overview of the fund.


If i choose a fund,, does it have a life span? e.g. 15 years or can they go on and on..

They can last indefinitely. Sometimes not they get closed in which case they will usually be transferred to another similar fund.

P.S. The platform i have looked at it is Charles Stanley because i saw that is cheap and easily to navigate

Thanks

Hope that helps. As I wrote don’t forget your pension.

Lynholmer_Park

pip895 wrote: »

Charles Stanley are fine and don't charge you to invest in funds.

They do charge - 0.45%. In addition, you will pay charges for the funds you are invested with.

pip895

Lynholmer_Park wrote: »

They do charge - 0.45%. In addition, you will pay charges for the funds you are invested with.

I thought it was only 0.25%?? HL is 0.45% - platform fee. No trading fee for funds

AnotherJoe

For the OP its worth making a distinction between a charge to buy funds and a charge to hold them.

There may or may not be an initial charge to buy, and there will be an ongoing charge for holding them.

Lynholmer_Park

pip895 wrote: »

I thought it was only 0.25%?? HL is 0.45%

You are correct, apologies, 0.45% is my total charge, which includes my fund fees.

If you are thinking of VLS OP, Vanguard offer their products via their own platform now, which is cheaper.

dunstonh

It is also worth noting that the VLS charges are now declaring higher costs than before. VLS 60 is 0.33% now. Compared to HSBC GS Bal which is 0.20%.

msallen

Hi dunstonh. Where are you seeing the OCF for VLS as 0.33%?
Both Morningstar and Vanguard's own site are showing 0.22% (although Morningstar does state that as the charge as of October 2017).

dunstonh

Where are you seeing the OCF for VLS as 0.33%?

The OCF is still 0.22%. That hasnt changed. However, there is a new method of charges disclosure which is being rolled out. Should have been in force from 3rd of Jan but most fund houses were running late and its only come out in the last few days. That is why the media coverage on the scale of hidden charges is only now starting.

https://www.ft.com/content/78918c88-fd13-11e7-a492-2c9be7f3120a
https://www.moneymarketing.co.uk/fund-managers-fees-outed-mifid-ii-disclosure-rules-take-effect/
https://www.investmentweek.co.uk/investment-week/news/3024902/mifid-ii-exposes-hidden-investment-management-charges
https://portfolio-adviser.com/mifid-ii-rules-expose-charging-grubiness-top-20-funds/

The new total charges figure is required to include the OCF and the transaction charges figure and any other charges. So, a non-advised platform should be showing OCF+Transaction charges+incidental charges+platform charge. An adviser one should include the adviser charge.

When talking about fund only, you are now looking at OCF+transactional charges. Not just the OCF.

Both Morningstar and Vanguard's own site are showing 0.22% (although Morningstar does state that as the charge as of October 2017).

Vanguards 2018 pricing guide on their website shows the 0.33% (0.22 +0.11).
Financial Express (paid for version) shows the new charges. Trustnet doesnt yet but seeing as FE only added it to their paid offering a few days ago, the free version will probably follow in due course. I dont know when Morningstar will update theirs.

It appears that platforms are at different stages of disclosure on this.

m_c_s

HSBC funds disclosure Dec 2016

https://www.assetmanagement.hsbc.com/uk/attachments/other-useful-documents/enhanced_disclosures_table.pdf

Vanguard funds disclosure 2018

https://www.vanguardinvestor.co.uk/content/documents/legal/vanguard-full-fund-costs-and-charges-2018.pdf