First Direct S&S

OliverNW3 · 21 September 2019 at 3:44PM

Hi all,

Until recently I have been focusing on savings - I'm mid 30s, no house/car (hasn't been a goal - getting on the housing ladder might be on the agenda within the next 5 years) but saving regularly every month so I've managed to gather up around 30k in savings.

I am hoping with a job change my salary might increase and I'll be able to maintain my savings habits but also think now is the time to open a S&S ISA (not just the Cash ISA that I have).

Because I bank with First Direct, I've gone to them and asked to open one - but am wondering (being relatively clueless about S&S ISAs) if that's the best choice, and I've heard of Vanguard, Lansdown Hargreaves, etc being popular.

I would first of all be interested in investing around 3-5k and letting it sit for 5-10 years to see what happens. I want to be able to invest without making choices myself as to which stock to choose etc, I like the idea of a passive type fund, global equity type...

Just wondering if anyone has any advice for someone in my position? Should I go ahead with FD or contact another provider - or does it make much difference?

Thank you as always!

ColdIron · 21 September 2019 at 4:30PM

Banks are usually a poor choice for investments. Often expensive and limited choice. A brief look shows FD have a flat account fee of £42 pa and dealing fees of £10.50. Probably the main issue for you is that they don't appear to allow you to buy funds, only shares and ETFs

DrSyn · 21 September 2019 at 5:41PM

Some basic points, just in case you do not know.

Money needed within 5 years should be kept in a savings account.

Savings in Bank/Building Society covered by the FSCS protection
(at present up to £85K).

INVESTING: Putting your money at risk where there is the potential loss of all your money. You hope to take out more than you put in, but this is not guaranteed.

Investments are not covered by the FSCS protection.

1. As a new would be investor, first watch both of these:-

http://www.kroijer.com/

https://www.ifa.com/indexfundsthemovie/

Then consider investing in a low cost Global Multi Asset Fund. They have wide diversification while minimising risk, at low cost.

Global Multi-Asset Funds:
Vanguard Life Strategy
HSBC Global Strategy
L&G Multi Index Funds
Blackrock Consensus
Architas Passive

You chose the risk level or share/bond split you are comfortable with, pay them the money & they do the rest. Have a look at these.

https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds?intcmpgn=lifestrategyfunds_learnmore_link

With this one you chose the share/bond split at the start. You have to except the market risk that goes with that split. They then re-balance the fund to maintain your chosen split.

https://www.hsbc.co.uk/investments/isas/hsbc-global-strategy-portfolios/

You chose the risk level you want at the start (such as balanced). They then re-balance the fund assets to maintain that risk level. This is called a " Risk Targeted Fund".

2. Platforms:- Make sure that the platform deals with the fund you are interested in, before signing up.

http://www.comparefundplatforms.com/

https://www.boringmoney.co.uk/calculator/

badger09 · 21 September 2019 at 6:57PM

You might also look at saving into a LISA. If you think you might want to buy a house in the next 5 years, you should choose a Cash LISA. Save up to £4k a year and the government will add a £1k bonus.

As you bank with First Direct, I assume you're already using their 5% Regular Saver. You could transfer the maturing balance into a LISA each year.

A bog standard Cash ISA is unlikely to be the best place for your savings;)