Platforms vs Platforms

bowlhead99

Well, if you have less than £4000 you don't really need multiple funds...

And I would stop worrying too much about what happens if you lose one of your investments in its entirety. While it's technically possible for a fund with investments in 50+underlying companies to become worthless (if all of those 50+ companies go bust), practically speaking it's not very likely. That's one of the reasons people invest in funds and not in individual companies.

Some platforms might have negotiated slightly lower minimums with certain fund manager groups and will have lots of customers holding those funds so that they will easily meet the minimum in total across your their clients and the manager will be happy to waive the requirements. You will probably find that most mainstream funds on the major platforms have minimum contributions of well under £1k. Even if they say they are £1k minimum on a factsheet, you can probably just start to buy them on a monthly plan (where the minimum is £25-100pm) and then stop before you actually get to the 'minimum one off level', without them complaining.

Audaxer

bowlhead99 wrote: »

Well, if you have less than £4000 you don't really need multiple funds...

Yes, with that amount OP would be better with one multi asset fund.

shrewsaver

dqnet wrote: »

I'll be opening my investment platform account in the coming days and was wondering which platform had better customer support and hand holding. I was thinking of going either AJ Bell or HL. I'm not too worried about the platform fees to initially as I'm just starting out and will make the necessary changes later (I understand this may be a costly) but my concern was more about getting the educated help if I need it. I've called both numbers for various fund questions and both have been pretty good but I was wondering if anyone had a specific experience that would steer someone away from either platform. Thanks

p.s. HL said that in some cases the ongoing fund fee will vary between Platforms. Is this true or are they all the same (providing the platform offers the fund)?

Have a look here, there are some comparisons between online brokers:
http://www.moneyobserver.com/our-analysis/find-best-online-broker-your-portfolio-size

I have used Interactive Investor for over 10 years and have never had any issues with them and when phoning them, they are always friendly and knowledgeable.

Wassa123

Newbie investor here...

Why would OP be better off with 4k in one fund rather than being diversified in several?

ValiantSon

shrewsaver wrote: »

Have a look here, there are some comparisons between online brokers:
http://www.moneyobserver.com/our-analysis/find-best-online-broker-your-portfolio-size

Details on that link are quite out of date now, e.g. iWeb has a much cheaper account opening charge now.

See here: http://monevator.com/compare-uk-cheapest-online-brokers/

ValiantSon

Wassa123 wrote: »

Newbie investor here...

Why would OP be better off with 4k in one fund rather than being diversified in several?

A single fund, e.g. multi-asset, could offer the necessary diversification. With an investment sum of £4,000 the pot is very small and splitting it across several different funds is unlikely to produce better returns, but will increase costs. They will also have to take an active approach to rebalancing, which will likely involve further trading costs. There is also the risk that the funds chosen will actually be less well diversified than the single multi-asset fund.

dqnet

bowlhead99 wrote: »

Well, if you have less than £4000 you don't really need multiple funds...

you can probably just start to buy them on a monthly plan (where the minimum is £25-100pm) and then stop before you actually get to the 'minimum one off level', without them complaining.

That is subjective to an individuals investment tactic so one still needs to see that as a disadvantage of a given agreement between platforms however I really like your starting monthly plan then stopping idea. I'm going to look into it.

Audaxer wrote: »

Yes, with that amount OP would be better with one multi asset fund.

Again, subjective as £3000 was just an example amount. It was the minimum charges that were the problem.

ValiantSon wrote: »

Details on that link are quite out of date now, e.g. iWeb has a much cheaper account opening charge now.

See here: http://monevator.com/compare-uk-cheapest-online-brokers/

Thanks ValiantSon

dqnet

ValiantSon wrote: »

A single fund, e.g. multi-asset, could offer the necessary diversification. With an investment sum of £4,000 the pot is very small and splitting it across several different funds is unlikely to produce better returns, but will increase costs. They will also have to take an active approach to rebalancing, which will likely involve further trading costs. There is also the risk that the funds chosen will actually be less well diversified than the single multi-asset fund.

Technically true but if one was new the the investment portal and wanted to experiment with a few hundred pounds with a fund and also test a diversification strategy then they're out of a luck if the minimum is £1000. It's more of an inconvenience rather then a disadvantage of the platform for new investors.

ValiantSon

dqnet wrote: »

Technically true but if one was new the the investment portal and wanted to experiment with a few hundred pounds with a fund and also test a diversification strategy then they're out of a luck if the minimum is £1000. It's more of an inconvenience rather then a disadvantage of the platform for new investors.

You'd need to leave the money invested for at least 10 years to see the meaningful results of such a test. Short term movements in fund values are irrelevant.

bowlhead99

dqnet wrote: »

Technically true but if one was new the the investment portal and wanted to experiment with a few hundred pounds with a fund and also test a diversification strategy then they're out of a luck if the minimum is £1000. It's more of an inconvenience rather then a disadvantage of the platform for new investors.

There are really very few funds with minimum £1k contributions so unlikely to be such a big deal that it makes you want to move to a platform that charges 0.45% a year instead of 0.25%.

I appreciate that on £4000 the difference is only £8 a year and you can say small numbers are not important. Still, you are considering putting £500 of a small portfolio into one fund. If that £500 delivers an extra 1.5% more per year than the average of your other funds over the long term... that incremental gain is only £7.50 a year on £500. So either small numbers are important to you or they aren't.

Likely in that example it was not worth using the platform costing £8 extra per year just to experiment with a token £500 in some obscure fund and eke out an extra £7.50 a year in profits. (Am assuming it's an obscure specialist fund as most mainstream ones have sub-£1k buy-ins).

Good luck with it all. AJ Bell are fine, as are HL, though the latter is certainly more expensive as the portfolio gets bigger. As for their relative abilities in terms of 'hand holding' - if you only have a relatively small amount of money (£4k) which could be dealt with by a single fund, but you are buying four or more funds in sub-£1k quantities, then it could be assumed you are an advanced investor looking to make things more complex than they need to be, as you want to bring your experience to bear. If you have such experience, you don't really need 24-7 phone support and hand holding to press the 'buy' button on a few funds. While if you don't have experience, you don't need more than one fund

Good luck with whatever you decide.