HSBC G S B which platform to invest in

Stirfry

Hi all

I have 50k to invest in HSBC Global Strategy Balanced (Acc) and am confused about platform charges. I web say they do not know exact broker charge so will take an average .5% fee. Should I invest direct with HSBC account fee .39%.
What are these fees related to and are they ongoing? Which is best to invest 50k in one go I also have an account with Hargreaves Lansdown but think it costs more. The more I try to compare the more confused I am getting, so I need your help as I intend to put a lump sum in and leave for some time.

Thanks in advance.

Eco_Miser

Iweb don't charge percentage fees. There's a one-off £25 to join and £5 every time you buy or sell.
For funds that's it until you want to transfer out to another broker or platform. For shares there's a 0.5% stamp duty to the government, and maybe £1 to Panel on Takeovers and Mergers.
So I don't know where you got that average .5% fee.

bowlhead99

If you invest all in one go with a platform that charges you an annual percentage based fee, then over the year you will pay that percentage in total (usually in quarterly chunks) and again the next year and the next year based on your account balances. For example HL is 0.45% which is £225 each year if the balance doesn't go up, which you hope it will or you wouldn't be investing. HSBC Global Investment Centre charge 0.39% a year (£195 a year on £50k).

Some platforms charge you a lower percentage rate (e.g. Charles Stanley Direct or Youinvest at 0.25%). Others charge a flat fixed platform fee regardless of value, and simply charge a transaction fee every time you buy or sell. That's the sort that is likely to be cheapest for buying one big lump amount and leaving it.

IWeb is one of the latter category which works on flat fees of £5 per purchase or sale. If they are talking about some 'average fee' they are probably talking about the ongoing charge forecast for the fund which is the measure of charges taken out of the fund (management fee from fund manager, accounting and reporting costs and all the other things that happen in the background for the fund manager to run a fund). They are probably just saying that all the funds you could buy through them have different costs but on average might be half a percent. Some would be over one percent, some more like 0.1%. Actually the HSBC GS Balanced is towards the bottom end of that range as it is a cheap fund. But that's the running costs and management fees of the fund itself, which is incurrred no matter what platform you buy it from, and is separate from the charges that the plaforms want to charge you for the account which they maintain for you.

As mentioned above, if you are buying shares listed on a stock market, you have to pay stamp duty which is another 0.5% for the London market. However the HSBC GS Balanced isn't traded on a stock exchange, it's bought through a fund platform so the 0.5% is not payable.

I think you can ignore the confusing reference to 0.5% from IWeb as a red hering, and just read their charges page where they say it is only £5 for a transaction fee. That is, you can buy £50k of it now for £5, and not pay anything else until you sell it in many years time. If you want to hold it in an ISA or pension wrapper, there will be an annual fee for that, but not if you are happy to hold it unwrapped with no tax protection.

Eco_Miser

bowlhead99 wrote: »

If you want to hold it in an ISA or pension wrapper, there will be an annual fee for that, but not if you are happy to hold it unwrapped with no tax protection.

There is no additional fee for an ISA with Iweb, not even an additional one-off joining fee.

bowlhead99

Eco_Miser wrote: »

There is no additional fee for an ISA with Iweb, not even an additional one-off joining fee.

Apologies you are right that there's no annual charge for ISA.

A one-off account opening fee is still listed right at the top of their ISA fees page though, which constitutes an extra fee other than the £5 transaction fee and ongoing fund internal running costs. If you only have the account for a year it's £25 a year, but if you have the account for many years it will fade into pretty much nothing per year unless they bring in new annual fees.

http://www.iweb-sharedealing.co.uk/charges-and-interest-rates/stocks-and-shares-isa-charges.asp

Eco_Miser

oh yes, there is the £25 initial fee, as I mentioned earlier, but you pay that whether opening just a GIA, or for a GIA and ISA (you automatically get a GIA if you open an ISA)

Stirfry

Many thanks to you both for clarifying the matter. I have an account with i web ISA already full for this year with funds waiting to top up next tax year. As Eco Miser stated I also have a GIA yet to be utilised, so I will use that.

ValiantSon

Stirfry wrote: »

Many thanks to you both for clarifying the matter. I have an account with i web ISA already full for this year with funds waiting to top up next tax year. As Eco Miser stated I also have a GIA yet to be utilised, so I will use that.

As the new tax year is not that far away, might it not make sense to invest £30,000 now in the GIA and then £20,000 on 6th April in the ISA? If you invest the full £50,000 now in the GIA and want to transfer £20,000 into the ISA you will have to sell the funds in the GIA and then buy them again in the ISA. This could prove costly (and not just because of iWeb's £5 trading fee).