SS charges and investment decision

AlanB1976

Hi there
As with so many out there, all this investment talk gets really confusing, so apologies for the stupid questions....
I want to invest about £200 a month into 2 long term accounts (£100 each for my 2 kids - not for in their names, will be owned and managed by me). I was thinking relatively high risk stocks and shares as it will be about 20 years until I look at needing it (something like the VANGUARD INV UK LT LIFESTRATEGY 80 PERC EQUITY). I have an account with Charles Stanley and would like to continue using them purely for convenience, but will look at moving if it makes sense.
1. Firstly, I want to keep the accounts separate so is there any trick to have multiple accounts under a single ISA? I don't really need them separate but want to be able to track them separate (e.g. one kid uses some for uni fees). Any ideas?
2. Would it be better to invest monthly or keep the monthly contributions in my bank account and only invest annually? I'm not sure on charges for transactions with CS. They say "£11.50 per share trade" but would that be the charge each month?
3. What is the best way of doing this? Again, sorry for idiot questions. Do I just open 2 different Investment Accounts and buy shares in Vanguard?
4. Am I being an idiot and there is another way of doing this much easier?

Thanks for any guidance.
Alan

Alexland

Opening an ISA with Vanguard Investor would be cheaper than continuing with CSD. We are nearly at the start of a new tax year anyway.

Have you considered the Vanguard Target Retirement funds which reduce market and currency volatility / risk as the target withdrawal date approaches. You could pick ones that roughly align with when they are 18 (eg VTR 2035 if they are very young) and if the age gap is big enough you will know which of the 2 funds are for each child?

Make sure your will makes it clear this money is to be kept in trust for the children.

Alex

JohnRo

AlanB1976 wrote: »

1. Firstly, I want to keep the accounts separate so is there any trick to have multiple accounts under a single ISA? I don't really need them separate but want to be able to track them separate (e.g. one kid uses some for uni fees). Any ideas?

Keep any complexity in a spreadsheet, keep the physical account management as simple as you can.

AlanB1976 wrote: »

2. Would it be better to invest monthly or keep the monthly contributions in my bank account and only invest annually? I'm not sure on charges for transactions with CS. They say "£11.50 per share trade" but would that be the charge each month?

The £11.50 fee is for dealing exchange traded products.
The only charge for funds (from CSD) will be their 0.25% annual platform charge, levied monthly pro rata in arrears.
Dealing funds has no charge.

AlanB1976 wrote: »

3. What is the best way of doing this? Again, sorry for idiot questions. Do I just open 2 different Investment Accounts and buy shares in Vanguard?

Just buy one lot in one account, split the investment 50/50 on paper (or spreadsheet), it's in your name, you have control.

AlanB1976 wrote: »

4. Am I being an idiot and there is another way of doing this much easier?

Whatever works best for you is usually the best option. That may change over time.

AlanB1976

Thanks for the replies.

I know CS is quite well known, which is why I originally went with them. Is Vanguard Investor generally a trusted site? Again, not knowing things in this arena, I don't want to risk any losses by going with some place less stable just to save a couple bucks.

JohnRo, I agree in simplicity, however, if there is no charge to additional transactions (i.e. 200 to a single account would be the same as 100 to two account @ 0.25%), would not having to try keep things sorted via a spreadsheet be more complicated, especially with children a few years apart? I'm just asking in case I'm not realising some complexity of having 2 accounts (apart from 2 account numbers to work with)?

Thanks again for the help

JohnRo

CSD will allow multiple GIAs so if you wanted physical separation with them it's entirely possible, just means twice the admin, whereas a 50/50 split is about as simple as it gets.

That said things could get complicated if they end up wanting different amounts at different times though.

Separation in ISA accounts will be a little more involved/expensive and runs into the brick wall of annual ISA subscription rules which state the new allowance can only go into one ISA account each year. You could alternate but it would be convoluted and could stop your own plans. Just seems unnecessarily complicated.

enthusiasticsaver

I don't think you can open any more than one ISA a year so keeping two accounts within one ISA may be difficult unless one is invested in one fund and one invested in another. I don't use CS though so maybe they have a way of doing it.

I don't think it really matters when you invest (monthly or annually) as there are pros and cons to both. Many people say time in the market is best and dripfeeding works better from a cost average point of view so investing monthly would seem to be best. Alternatively you can open two regular savers and invest as a lump sum at the end of the year. Dealing charges would be less if you just do two deals (or one if investing in the same fund for both children) but then you will miss out on a year of investment gains. Most platforms charge less for monthly direct debits than if you do a one off each month.

Personally to keep things simple I would just invest within your ISA limit and split it 50/50.

dunstonh

1. Firstly, I want to keep the accounts separate so is there any trick to have multiple accounts under a single ISA? I don't really need them separate but want to be able to track them separate (e.g. one kid uses some for uni fees). Any ideas?

Use a different fund for each objective.

2. Would it be better to invest monthly or keep the monthly contributions in my bank account and only invest annually? I'm not sure on charges for transactions with CS. They say "£11.50 per share trade" but would that be the charge each month?

You should use a platform that is suited to your objective. Not change your objective to suit the platform.

3. What is the best way of doing this? Again, sorry for idiot questions. Do I just open 2 different Investment Accounts and buy shares in Vanguard?

You cant. An ISA is an ISA. It will be one account. However, with different funds, you can identify which one belongs to whatever objective you want it to be (assuming different periods exist).

capital0ne

AlanB1976 wrote: »

Hi there
1. Firstly, I want to keep the accounts separate so is there any trick to have multiple accounts under a single ISA? I don't really need them separate but want to be able to track them separate (e.g. one kid uses some for uni fees). Any ideas?

ISA = Individual Savings Account - So you cannot have multiple accounts under a single ISA.
You will need to select an ISA provider - that's your single point of access, and then create an ISA for each person that has one, with their permission of course.

Would it be better to invest monthly or keep the monthly contributions in my bank account and only invest annually? I'm not sure on charges for transactions with CS. They say "£11.50 per share trade" but would that be the charge each month?

Most providers will have a regular investment option when the dealing fees are between £1.00 and £2.00 each time you invest so over a year the cost could be between £12 and £24.

You'll be doing this over the long term 10+ years then you may as well just make a lump sum investment right at the beginning of the tax year, 6th April, Why miss out on 12 months worth of potential growth.

ValiantSon

AlanB1976 wrote: »

I know CS is quite well known, which is why I originally went with them. Is Vanguard Investor generally a trusted site? Again, not knowing things in this arena, I don't want to risk any losses by going with some place less stable just to save a couple bucks.

Vanguard Investor is part of The Vanguard Group who are one of the largest fund managers in the world, with $4.5 trillion of assets under management and over 40 years history. They have full FSCS protection (£50,000) and there is no obvious reason to suspect that there is an unusual risk in using their services. If you are just going to invest in Vanguard funds then you might as well use their cheaper platform.

cloud_dog

AlanB1976 wrote: »

Hi there
As with so many out there, all this investment talk gets really confusing, so apologies for the stupid questions....
I want to invest about £200 a month into 2 long term accounts (£100 each for my 2 kids - not for in their names, will be owned and managed by me).

As others have said, I think you are over complicating the situation, wrt ensuring two separate accounts/funds etc.

I don't see a problem with having a single fund and then at the appropriate time for eldest child one simply divide it in two (unsure if your plan is to gift the money at this stage or not).

If you are adamant about two separate funds, then I assume you will put an appropriate amount of additional money in to the eldest child's fund so as to treat them both fairly and equitably?

Is Mrs AlanB1976 with us or available to utilise her ISA allowance? This would be the only way I could see for you to have two separate accounts investing in the same funds.

Alternatively...Invest one £100 in an ISA account this FY, and £100 in a GIA. At some point you would need to manage the GIA and probably move it in to an ISA account as the amounts in discussion would put you over CGT territory, probably.

AlanB1976

Thanks for the replies and advice.
I'll go with 1 account and wrap it up in my ISA. I want to be fair but I suppose i may not distribute evenly between the kids. After all, one might win the lottery or possibly one account suffer more due to market timings.
I'll also go with Vanguard Investor and set up a monthly debit (the annual lump sum would only be end year so might as well take advantage of some growth).

I assume that since it's an ISA, I'll have to sort it out every year and there is no way of automatically wrapping it up in the next year's ISA when the time comes?

Thanks again for the help.
Alan