Halifax Share Dealing S&S - understanding ISA costs

savingsguy

Hi all,

I'm investigating using Halifax S&S ISA.

• £12.50/year annual charge
• £12.50 dealing commission per trade
• £2.00 regular investments commission per trade

So say I was to build up these index fund in my account, eg

• HSBC FTSE All-World Index Fund C (75%)
• Vanguard UK Government Bond Index (10%)
• Vanguard UK Inflation-Linked Gilt Index (10%)
• L&G Global Real Estate Dividend Index I (5%)

So I save £800 per month into an ISA, then every month I want to top up my funds.

• Can that be done automatically with each fund, or do I manually have to log in each month and buy into each fund?
• I don't understand £2.00 regular investment means in reality, could it mean that if I buy into 4 funds each month, it costs me £8??
• Or will it costs me £12.50 per trade for each fund - £50?

Kind regards!

cloud_dog

savingsguy wrote: »

So I save £800 per month into an ISA, then every month I want to top up my funds.

• Can that be done automatically with each fund, or do I manually have to log in each month and buy into each fund? - SET UP A REGULAR INVESTMENT FOR EACH FUND FOR £x
• I don't understand £2.00 regular investment means in reality, could it mean that if I buy into 4 funds each month, it costs me £8?? - YES
• Or will it costs me £12.50 per trade for each fund - £50? - THE £12.50 TRADE IS A MANUAL / ONE OFF TRADE

Unsure if you are starting out, or if you already hold amounts in the funds mentioned but, if you are starting out why not consider a single global multi-asset fund and set up a regular investment for £800, charging you £2 per regular trade?

Alexland

£12.50 is for adhoc trades and £2 is for a schedueld trade so if you setup the transaction in advance to buy into your 4 funds regularly that would cost you £8 per month. Over a year the platform and trade fees would cost you £108.50. That's assuming you use new contributions to rebalance rather than incuring adhoc trade fees. Fixed or capped fee platforms like HSD are better for larger account balances.

Assuming you are not starting with a lump sum it would be cheaper in the early years to use Cavendish (assuming all those funds are available) who charge a 0.25% platform fee. Also consider just using a multi asset fund.

Alex

savingsguy

Thank you for the information. Halifax seems quite reasonable then.

I'd love the simplicity of a multi asset fund and Vanguard LifeStrategy seems very popular. The issue with the fund is that it has a home bias with UK overly represented. That's the only thing stopping me.
A part of me likes going down the DIY route too. There is Interactive Investor to consider too.

I am a newbie investor, but really want to get things right for the long term. Basically I have a lump sum to invest initially around £45k in an ISA. I plan to average it in over a year.

Thanks again

badger09

savingsguy wrote: »

Thank you for the information. Halifax seems quite reasonable then.

I'd love the simplicity of a multi asset fund and Vanguard LifeStrategy seems very popular. The issue with the fund is that it has a home bias with UK overly represented. That's the only thing stopping me.
A part of me likes going down the DIY route too.

I am a newbie investor, but really want to get things right for the long term. Basically I have a lump sum to invest initially around £45 in an ISA. I plan to average it in over a year.

Thanks again

Typo?..............

savingsguy

Oops, corrected to £45k!

Flobberchops

Once a month Halifax hold cheap trade windows where the usual £12.50 for ad hoc trades is reduced to £3.95, if you choose to go that route. It sounds like you're going to be using a regular investment plan though, which is even cheaper.

savingsguy

Thanks @flobberchops

I see the cheap trade window from Halifax is only for UK/international stocks. Fund trades are not included.

Perhaps if I have the funds set up (I guess I'de have to pay £12.50 each initially) I could then set up regular investments which would be £2/month.

A multi asset like Vanguard LS80 would be simple. I'm worried that it is overly exposed to the UK hence my own DIY portfolio. Hey ho, it might be worth the compromise for the simplicity and you get rebalancing included.

Alexland

I assume the £45k is already ISA wrapped otherwise you are limited to £20k per tax year unless you have additional permitted subscriptions.

Looking at your target asset allocation I would suggest L&G Multi Index 7 although it also has a UK weighting but that fund series is not available on Halifax SD. You should be able to get it on Interactive Investor if you were happy to pay £120 per year. However II are still a loss making company which you may wish to consider but you would be covered up to £85k under FSCS if the assets are not correctly held in a nominee account.

HSD do have the HSBC Global Strategy series (which doesn't have the UK equity weighting) but at 75% you are at the mid-point between their Balanced and Dynamic fund choices.

There is also Blackrock Consensus 70 which has a slight UK weighting but a quick check on HSD shows they only have Consensus 100 so you would need to ask for it to be added which should be OK but can take months.

So I guess it depends if you are willing to compromise on your desired asset allocation for simplicity, lower trade costs and automatic rebalancing?

Alex

bowlhead99

savingsguy wrote: »

A multi asset like Vanguard LS80 would be simple. I'm worried that it is overly exposed to the UK hence my own DIY portfolio. Hey ho, it might be worth the compromise for the simplicity and you get rebalancing included.

It's important not to understate the value of simplicity, especially when you are starting from a small ish balance (£45k not hundreds of thousands) and only adding £10k a year (and the odd £10k this year or next will presumably be only a relatively small portion of your entire lifetime investment/ pension balances).

If you think you can allocate capital better than the professional off the shelf products - for your own goals and objectives - without sacrificing efficiency, go ahead. It's certainly possible to imagine ways in which the professionally-constructed products could be changed without making them significantly worse. However, that's why a variety of rival products exist; you don't need to try to make your own versions of them, as a beginner investor.

As an example - you liked the concept of using cheap tracker funds but didn't like the level of UK exposure:

But couldn't be bothered using 10+ underlying funds to do the job, like Vanguard, HSBC, L&G, Architas, BlackRock etc would do, because that would be more effort to buy, more effort to rebalance, more effort to work out your preferred allocation among all the asset classes.

So you tried to do it with just 4 as a lazy option.

- As you don't have a dedicated emerging market fund, your EM to developed markets ratio is pretty low, given total free float accessible stock market size Vs GDP and population ;
- As you only went for two types of bonds, both UK government, you don't have any bonds from other parts of the world where yields and economic conditions might be different, you don't have any corporate bonds etc.

It's not obviously a better portfolio than what you could buy off the shelf, and it needs maintenance because there isn't a fund manager keeping the allocations in check, other than yourself. You might think allocating back to a target allocation doesn't really matter when the amounts are small and you're not too fussed anyhow. If that's true no real need to break the target allocation of the professionals to creat your own.

Tom99

savingsguy wrote: »

Thanks @flobberchops

I see the cheap trade window from Halifax is only for UK/international stocks. Fund trades are not included.

Perhaps if I have the funds set up (I guess I'd have to pay £12.50 each initially) I could then set up regular investments which would be £2/month.

A multi asset like Vanguard LS80 would be simple. I'm worried that it is overly exposed to the UK hence my own DIY portfolio. Hey ho, it might be worth the compromise for the simplicity and you get rebalancing included.

No you can do one off investments using the £2 a pop regular investment, there is no upper limit to the amount you can invest that way, £100k plus if you like.
If you are spreading your investment into 4 funds but only 5% in one fund then for a small investment £2 could be a high %age so maybe only buy into that fund every few months.