Stocks and Shares ISA Advise Request

bloke91

Hi

I am contemplating moving my stocks and shares isa, looking for some advice.

It's worth £3900 currently, I pay £80 a month into it and after charges its giving me a return of 4% each year on average.

It's a Police Mutual Guaranteed Fund which means higher charges.

The charges they take are 3.5% of each monthly payment and 1.5% of the overall value each year. e.g 4.5% each year.

Obviously the charges are higher due to the fund being guaranteed at yearly incremental points. I am considering others as Moneyfarm and Nutmeg.

The charges are pretty high and the fund is no longer available from Police Mutual. I have been it in 3 years, should I move to Moneyfarm\Nutmeg or stay with Police Mutual?

Thanks in advance.

dunstonh

It's a Police Mutual Guaranteed Fund which means higher charges.

Its a rubbish product and was obsolete on launch. Indeed, 20 years before it was launched.

Obviously the charges are higher due to the fund being guaranteed at yearly incremental points.

The charges are higher because they have a captive market of people that dont know any better and that they sold direct. So, they could get away with marketing products that the advice market could not use without getting missale complaints.

I am considering others as Moneyfarm and Nutmeg.

Cheaper but still more expensive than modern DIY options. I personally have an issue with Nutmeg over their really poor financials and more importantly, the way they hide/distort their charges disclosure and other comments they make.

We see a lot of people who think Nutmeg charges are 0.45% all in but its actually 0.75% all in. That is double alternative options available in the DIY market (and advice market if you remove the advice fee)

I have been it in 3 years,

Just for context, it went obsolete around 1995. So, buying it in 2015 tells you how bad it is.

bloke91

So you agree the charges are to high then?

The returns police mutual give you are anywhere between 6 and 10% a year on stocks isa's. They also have a couple of other stocks and shares isas where the charges are 1.5% - 2.0%.

I should look an alternative's such as Moneyfarm.

rathernot

There are lots of alternatives, I guess the likes of Nutmeg or Moneyfarm look cheap when you've been paying those kind of fees

I'd first work out what you want to invest in and how often and that may lead you to the provider.

Alexland

Consider transfering to Vanguard for low cost high quality investment to match your risk tolerance. The returns are not guaranteed but highly likely to beat your current ISA provider over the long term.

https://www.vanguardinvestor.co.uk/investing-explained/stocks-shares-isa

https://www.vanguardinvestor.co.uk/what-we-offer/life-strategy-products

I have had accounts with Nutmeg and Moneyfarm and Vanguard are better. Moneyfarm's ETF choices are expensive and overly complex for no clear benefit. Nutmeg are good but you can get the same performance for lower cost at Vanguard.

Vanguard are also a more financially secure organisation to trust with your money.

Alex

BLB53

The charges they take are 3.5% of each monthly payment and 1.5% of the overall value each year. e.g 4.5% each year.

These charges are too high and you will struggle to get a decent return if you leave it with them.

You can either go DIY with the likes of AJ Bell Youinvest or Vanguard Investor if you are OK selecting your own investments. Otherwise go for one of the so called 'robo advisors' who charge a bit more but they will select the funds for your investment.

Here's an article about the Robo's on DIY Investor site ...
http://diyinvestoruk.blogspot.co.uk/2017/08/a-look-at-uk-robo-advisors.html

Passive_Investor

Those charges are REALLY expensive! They are making themselves very rich at your expense.
You should transfer to a low-cost provider like Vanguard. Their total charges would be around 0.4% and they offer very simple and safe passive investments which track entire markets.
This would literally save you thousands of pounds over an investing lifetime.

dunstonh

Those charges are REALLY expensive! They are making themselves very rich at your expense.

As I said, its 1995 style.

they offer very simple and safe passive investments

I take issue with this as "safe" has nothing to do with whether it is passive or managed. Safe is to the with the level of investment risk being taken and other related risks. Vangaurd offer investments across the risk scale. None of the investment options they have can be referred to as safe in respect of investment risk.