Isa advice for total newbie

ColdIron

It's 1.06% which isn't very cheap. Here's a couple of threads you might want to peruse

https://forums.moneysavingexpert.com/discussion/5779755
https://forums.moneysavingexpert.com/discussion/5801961

Edit: Blimey he's disappeared

ValiantSon

MM2002 wrote: »

Hmmm,
Ive just had a meeting with hsbc about thier S&S ISA which looks very easy, and charge 1% a year, and looks very easy:-

https://investmentsplanning.uk.personal-banking.hsbc.com/1/2/d2c_r1_amendsPage#slimline
, just choose cautious, balanced or dynamic.

Is this a total nono guys? I like the idea of a big bank looking after it, as they should know what they are doing(not saying others don't) but are Vanguard as easy and safe?

Ive got an IFA calling me later today, no doubt trying to sell his services, but really tempted to go it alone and save the charges.

I am also looking to max out for this financial year, so realise time is of the essence hence posting on here before hitting loads of research as a good starting point.

HSBC world selection is overpriced. They do offer a good range of funds called HSBC Global Strategy, which are better than the World Selection option. You can buy through a platform for a total cost of less than 0.5%, e.g. the Balanced fund costs 0.2% and as a platform, Cavendish will charge 0.25%, making a total cost of 0.45%.

Vanguard are one of the largest fund managers in the world; have been trading for over 40 years; and have $4.5 trillion of assets under management. They are big and reputable company. If you chose to invest in one of their LifeStrategy funds on their own platform it would cost you 0.37%. Buying the fund through a third party, e.g. Cavendish, would cost you 0.47%.

Vanguard's platform allows you to set up monthly investment via direct debit, if you want, or you can fund it with your debit card. The 0.15% fee is charged quarterly and can be paid by direct debit. It is a very easy to use website.

Lungboy

ValiantSon wrote: »

Vanguard's platform allows you to set up monthly investment via direct debit, if you want, or you can fund it with your debit card. The 0.15% fee is charged quarterly and can be paid by direct debit. It is a very easy to use website.

Can you not do this on Cavendish?

ValiantSon

Lungboy wrote: »

Can you not do this on Cavendish?

I haven't used Cavendish so I am uncertain exactly what their arrangements are and, to be honest, their website is poorly set out in terms of making things clear upfront. You may be able to use direct debit for a regular monthly plan (although it could be a continuous payment authorisation on your debit card instead), but there is no information that I can see about direct debits for paying fees. A lot of platforms don't allow you to pay your fees in this way, requiring instead for you to leave cash in the account to cover them, or letting them sell investments to cover the fee.

Lungboy

ValiantSon wrote: »

I haven't used Cavendish so I am uncertain exactly what their arrangements are and, to be honest, their website is poorly set out in terms of making things clear upfront. You may be able to use direct debit for a regular monthly plan (although it could be a continuous payment authorisation on your debit card instead), but there is no information that I can see about direct debits for paying fees. A lot of platforms don't allow you to pay your fees in this way, requiring instead for you to leave cash in the account to cover them, or letting them sell investments to cover the fee.

I can't find it on their website either, but old threads on here suggest they take payment from the largest holding in your isa or SIPP.

ValiantSon

Lungboy wrote: »

I can't find it on their website either, but old threads on here suggest they take payment from the largest holding in your isa or SIPP.

Thanks.

As I said, that is not unusual. Vanguard Investor is more unusual (and customer focused, not to mention forward thinking) in allowing you to pay fees by direct debit.

MM2002

After hours of study I have plumped for vanguard and whacked in 40k(20k each for myself and Mrs MM)sweaty palms time but I’m sure it’s the best option!

So far it’s just in the cash isa so I got it in before the end of the tax year. Will be adding another 20-30k next tax year(our inheritance)

Now to decide what vanguard product to opt for.

Life strategy seems the only one people mention on here? Surprising when vanguard offer I think 77 isa products.

Any reason for this?

eskbanker

MM2002 wrote: »

Now to decide what vanguard product to opt for.

Life strategy seems the only one people mention on here? Surprising when vanguard offer I think 77 isa products.

Any reason for this?

The LifeStrategy products effectively sit above Vanguard's other offerings by holding varying shares of a range of them in order to create a diversified fund of funds - check out https://www.vanguardinvestor.co.uk/investments/vanguard-lifestrategy-60-equity-fund-accumulation-shares/portfolio-data for example, showing the 17 Vanguard funds that are currently included in the 60% version of LifeStrategy.

As this approach is a cheap and simple way of achieving broad diversification (rule #1 of investing, or maybe #2 after 'only invest once you have enough cash savings'), it's particularly well suited to newbie investors who want to diversify with without having the knowledge of how to construct a suitably wide portfolio of their own from scratch.

Snapdragon

Thanks everyone for the pointers, I've taken the plunge, opened the ISA, used debit card to move the £20,000, chose the LifeStrategy funds and the site is showing they've been bought (and I'm 14p up)

Not sure about the fees element however, do they notify me when fees are due?

ValiantSon wrote: »

The 0.15% fee is charged quarterly and can be paid by direct debit. It is a very easy to use website.

I think that suggestion of setting up a direct debit to pay the quarterly fees sounds sensible, but not sure how to go about that. Can you tell me where I do this?

ValiantSon

Snapdragon wrote: »

Thanks everyone for the pointers, I've taken the plunge, opened the ISA, used debit card to move the £20,000, chose the LifeStrategy funds and the site is showing they've been bought (and I'm 14p up)

Not sure about the fees element however, do they notify me when fees are due?



I think that suggestion of setting up a direct debit to pay the quarterly fees sounds sensible, but not sure how to go about that. Can you tell me where I do this?

1) Log in to your account and go to "MY PROFILE" at the top of the screen.

2) Scroll down to see the panels. (The first one is "Address"). You want the fifth one, "Account fee settings". Click "Settings" in the bottom right hand corner of that panel. This should take you to the correct page.