iweb s&s isa charges - confused about possible fees

rowken

Afternoon all, a quick question regarding iweb stocks & shares ISA - I'm looking to drip feed monthly (between £1k and £5k for several months - potentially up to £100k in total) to invest in a FTSE 100 fund, but can't figure out if I get charged the fund investment fee each month I add money even if it's into the same fund. Anyone know if that's the case or not? Never held a S&S ISA before, so a complete newbie to this type of investing... Thanks!

bowlhead99

IWeb charges per purchase and sale transaction. If you want to buy more shares of the fund, the next month it will cost you a fee to do so. They don't allow you to trade for free just because you already happen to have some shares. 

As an aside, the FTSE100 might be the 'index of leading shares' you hear about daily on the TV, but a FTSE100 tracker is a high risk specialist investment, not designed to be held on its own - that would be pretty poor quality investing.

Setting aside the fact that it has been a poor performer for the last couple of decades and is heavily concentrated into a few industries (because money invested in it is allocated mostly to the biggest companies in the index - oil and banking and big pharma for example) and entirely missing other industries (there are no car manufacturers listed in the FTSE100 or 250, nor the equivalent of Microsoft or Google or Samsung or Tencent etc etc) .

A fund like that is intended to be held as a portfolio with a bunch of other specialist funds covering other countries and company types and non-equity investments to make a balanced portfolio. So, at least five or ten more funds to try to build a nice rounded portfolio. If you wanted to buy a bit of each of them each month, you would need a lot more trades . And you would not want to be putting the exact same amount of money into each of them, as it's unlikely that your portfolio allocation model has Japanese company equities at the same weight as US largecap equities, UK smaller company equities, emerging market bonds or index linked gilts.  So you might find you were putting just £250-300 a month into Japan while building up to £3000-4000 for the Japanese fund over a year. within your £100,000.  £5 a trade on £250 is quite inefficient.

Also, you mention never having had an S&S ISA before. The annual subscription limit to put new money into ISAs (across all types) is £20k per tax year. There will be another tax year in a few week's time, so that's £40k capacity. If you intend to get up to £100k it will take several more tax years' worth of allowances, if you don't already have tens of thousands of pounds in existing cash ISAs that can be transferred into the S&S ISA to fund the purchases. You may be well aware of that, just mentioned in case you were thinking you would literally contribute £5000 of new money each month and hadn't been aware of the annual limit on new subscriptions into an ISA wrapper.

Alexland

If you are drip feeding every month then iWeb would be £25 setup then 12x £5 trades = £60 pa per investment.

For a small account you would be better buying funds on a platform with percentage fees such as Vanguard Investor at 0.15% or Cavendish who offer more choice at 0.25%

For a large account Halifax Share Dealing at £12.50 pa for an ISA plus £2 per regular scheduled trade (£36.50 pa for 1 monthly investment) is cheaper than iWeb even even though they are basically the same platform.

Remember the ISA contribution limit is £20k per tax year.

dunstonh

to invest in a FTSE 100 fund, 

What on earth has made you want to invest in one of the worst performing indexes for over 25 years?   

Single sector funds are designed to be held in a portfolio of other single sector funds to allow you to build your own model portfolio.  They are not designed to be held in isolation.   So, apart from the FTSE100 being awful, holding it by itself is even more awful

rowken

@bowlhead99 - thanks, some really comprehensive advice - my husband doesn't have any ISAs either, so we could use his allowances too, and thanks to @Alexland for alternative platforms

@dunstonh - the driver is the losses due to coronavirus on the FTSE over the last week which have made me wonder if I could make a good return (10-20%) in a relatively short space of time (1-3 years). I should probably make time to research further but there's so much (mis)information out there it's a bit overwhelming, and yes, appreciate a financial adviser would help too, but a struggle to find people who really know their stuff. Any advice on where to find someone reliable much appreciated!

Alexland

The losses have extended beyond the UK's FTSE100 and a global index such as the FTSE All World has historically performed better.

Sure you could make 10-20% in the next few years but you could also lose the same too. Investment is for medium to long term periods of at least 5 years preferably longer.

dunstonh

@dunstonh - the driver is the losses due to coronavirus on the FTSE over the last week which have made me wonder if I could make a good return (10-20%) in a relatively short space of time (1-3 years). I should probably make time to research further but there's so much (mis)information out there it's a bit overwhelming, and yes, appreciate a financial adviser would help too, but a struggle to find people who really know their stuff. Any advice on where to find someone reliable much appreciated!

An economic cycle is broadly around 10 years (some less, some more).  So, unless you are prepared to invest for a cycle, you are pretty much taking a gamble on whether you are going to get the good half or the bad half.

The dot.com period fell each year for three years.  The credit crunch had a double dip.   So, investing now, for short time scales is a very hgih risk approach.

We probably haven't seen the bottom yet and it will probably be zig zagging like this for many months.   It could be another 2-3 years or many more before it returns to pre crash highs.