LISA Investment ideas

ds1980

We're in a fortunate position that the LISA is an attractive proposition to us and will be looking to invest the full amounts between myself and wife for the next 13-14 years. It looks like AJ BELL are pretty reasonable at .25% and am thinking about perhaps splitting the funds between lifestrategy products. Does anyone have any other ideas I could look into. I'm pretty risk averse and don't generally like funds but would prefer something I don't have to worry about or mess around with too much. It also needs to be cheap in terms of running costs. Ta

Alexland

Alternatives to LifeStrategy available on AJ Bell include the HSBC Global Strategy, Blackrock Consensus and L&G Multi Index fund series.

Funds are one of the best ways to reduce investment risk.

Remember there is a £1.50 trade fee and to leave enough cash in the accounts to pay the 0.25% ongoing fees until you can next contribute to the LISA.

ds1980

Ta. Will have a look at those. If you contribute full amount where do they take the account fee from? Can you pay it separately? I see that there's no limit on funds percentage fee although there is on stocks etc of £7.5 per quarter. Is that the case?

Alexland

HL can take fees separately but AJ Bell cannot as such you need to leave enough cash in the account to cover the fees so don't invest all the money otherwise when it comes to collecting the fees they will charge you a penalty and force sell your investments.

Yes the platform charges for funds are uncapped but they make money differently from customers holding Shares, ITs and ETFs as the trade fees are much higher. For the first few years of holding a LISA on AJ Bell it is cheaper to stick to funds.

Remember when the bonuses arrive they will be added as cash so that's more trade fees.

Alex

ds1980

Ta. That's a pain. Might stick to stocks then and use the divi's to build up a cash buffer I'll also know exactly what the costs will be once I go above the threshold as its capped. Will just have to take the £10 hit instead of £1.50! Grrr. You can purchase shares for £1.50 once a month which is what I'd normally do but I've missed the 10th deadline now which is annoying.

Why is it cheaper to hold funds out of interest? Is it simply for dealing costs?

Ta

ValiantSon

Might you be better off using HL? Although their platform fee is higher (at 0.45%) they don't charge any trading fees. A monthly trade will cost you £18 per year with AJ Bell, so it is quite possible that HL will actually be the cheaper option.

HL do also take the platform fee from cash in your account, or sell investments if there isn't sufficient cash. http://www.hl.co.uk/investment-services/lifetime-isa/charges Neither company allows you to pay the fees separately, which is really poor!

Alexland

ds1980 wrote: »

Why is it cheaper to hold funds out of interest? Is it simply for dealing costs?

Yes, in the early years AJ Bell is best suited for lump sum investors and HL for regular fund investors.

Alexland

ValiantSon wrote: »

HL do also take the platform fee from cash in your account, or sell investments if there isn't sufficient cash. http://www.hl.co.uk/investment-services/lifetime-isa/charges Neither company allows you to pay the fees separately, which is really poor!

HL wouldn't sell your LISA investments before trying to take the account fees from your Fund & Share account (if you have one).

Alex.

ds1980

On £16k it's cheaper to be with AJ. I'll probably buy 8 x ~£2k chunks of stocks at £1.50. Total cost £12 plus .25% although that will be capped once I go over £12k so think I'll stick with AJ. Just realised I can deposit cash to get bonus and then wait until a regular investment date for when something takes my fancy to keep costs down. May still add a lifestrategy fund alongside. Ta

Herbalus

Just to be clear are the AJ Bell trade fees for funds on regular payments? I.e. if you put in £50 per month into a fund it would be £1.50 per month just to invest?

I have the HL LISA in regular amounts each month so no trade fees and it!!!8217;s just .45% platform plus the fund fees.

I guess in that case AJ Bell would be better for a lump sum but HL better (by £18) for monthly contributions.

Alexland

Herbalus wrote: »

Just to be clear are the AJ Bell trade fees for funds on regular payments? I.e. if you put in £50 per month into a fund it would be £1.50 per month just to invest?

I have the HL LISA in regular amounts each month so no trade fees and it!!!8217;s just .45% platform plus the fund fees.

I guess in that case AJ Bell would be better for a lump sum but HL better (by £18) for monthly contributions.

You are correct. Regular contributions are even worse with AJ Bell as the bonuses would need investing too.