AJ Bell LISA v EQi LISA

OldManLogan

Hello,
I'm looking at transferring my cash LISA from Moneybox into a S+S LISA with either AJ Bell or EQi. HL don't except transfers in so that one is out of the question.
I just want to invest in a simple mutual fund such as Vanguard 60/40 or Vanguard Retirement 2040. I'm 40 next year so I want to transfer before then, regularly invest for the 10 years until I'm 50 and then obviously leave it until I'm 60 to withdraw penalty free.
Does anyone have experience with either LISA please?
AJ Bell charge £1.50 to invest in a mutual fund each time, so a way round this would be to add to the holding LISA monthly, accrue the bonuses and then invest into the fund annually or quarterly etc to reduce the fees, but also miss out on time in the market, does anyone do it this way?
EQi have been much more confusing, they don't charge to invest in a mutual fund, but they have confirmed to me that they charge £1.50 for regular investments. Does this mean that the £1.50 only applies if you actually set up regular investments (similar to a direct debit) to purchase an actual mutual fund directly? Could this fee be avoided by manually adding money to the holding LISA each month, then manually investing this into a mutual fund such as Vanguard? I've tried to clarify this with EQi but not getting anywhere at the moment, would appreciate everyone's advice and experiences,
Thanks

bowlhead99

For EQI, the £1.50 is their regular investment pricing for investment transactions that would ordinarily cost £9.99 or £5.99 (frequent trader rate) - buying investments on the stock exchange. To buy open-ended 'mutual funds' (where subscriptions and redemptions are agreed between the fund platform and fund manager) the charge is already nil for doing that whenever you like, so the 'regular investment' deal charging isn't relevant (AFAIK).

At AJBell they do charge the £1.50 on all fund transactions (whether regular or ad hoc) so it's a bit more expensive. As you suggest, if you wanted to automate it you could set up a direct debit for e.g. £300pm but set the regular investment level to be £900 so that you do a purchase every three months and the intermediate months it fails for lack of funds. Just an example.

If you already have the £4k at the start of the year, generally better to invest then in one big lump rather than drip feeding slowly or waiting without any purchases until the end of the year. As you say, time in the market is important if you want to get the most exposure to the markets over the course of your LISA.

OldManLogan

bowlhead99 said:

For EQI, the £1.50 is their regular investment pricing for investment transactions that would ordinarily cost £9.99 or £5.99 (frequent trader rate) - buying investments on the stock exchange. To buy open-ended 'mutual funds' (where subscriptions and redemptions are agreed between the fund platform and fund manager) the charge is already nil for doing that whenever you like, so the 'regular investment' deal charging isn't relevant (AFAIK).

At AJBell they do charge the £1.50 on all fund transactions (whether regular or ad hoc) so it's a bit more expensive. As you suggest, if you wanted to automate it you could set up a direct debit for e.g. £300pm but set the regular investment level to be £900 so that you do a purchase every three months and the intermediate months it fails for lack of funds. Just an example.

If you already have the £4k at the start of the year, generally better to invest then in one big lump rather than drip feeding slowly or waiting without any purchases until the end of the year. As you say, time in the market is important if you want to get the most exposure to the markets over the course of your LISA.

Thanks for your reply. EQi haven't been very clear in their replies so that really helps, I'm assuming in that case I could invest say £200 a month into a mutual fund with them and the £1.50 charge would not apply each time. 
I wouldn't have the 4k at the start of each year unfortunately so would be investing throughout the year, either monthly or however best avoids charges. 
I have no problem manually doing the transactions with AJ Bell and just doing so say every 3 months, I suppose it comes down which is the better platform or avoiding AJ Bells £1.50 fees

bowlhead99

I've been using AJ Bell's platform for a pension since about 2012 (when they were 'Sippdeal') and for ISA and unwrapped account from a few years later. The service is fine and the cost structure works out OK for the amounts and things I hold. 

If you're just going to buy a multi-asset fund and add to it every so often while holding it for a decade or so and then perhaps shop around to see if there's anything better for your needs for the decade after that, you won't need much in the way of customer service or a whizzy website or app features etc.  All the information about the (e.g.) Vanguard fund itself will be in the public domain so you can see how it's performing on lots of different websites, and you don't really need much in the way of annual reporting (as there's no tax to worry about), you just need a counter of how much contribution allowance you have left before you hit the annual £4k. Presumably both platforms can do that.

A driver for which provider you prefer for your LISA may come from what other sort of investments you are going to hold outside your LISA and whether you'd prefer the convenience of having them all in one place, or whether you and other family members want to have accounts with same provider- for example EQI look to be more expensive for small SIPPs than AJ Bell but it will depend to an extent on the mix of what you hold.

OldManLogan

Thank you, that's really helpful. I currently have an ISA with Vanguard that I invest in monthly, I chose Vanguard purely for the slightly lower fees as I knew I just wanted a simple multi asset fund. When I started with the LISA I made the decision to use the cash one which has caused problems now in terms of available transfers. Had I planned a bit more ahead I probably would have just opened an ISA and LISA with AJ Bell. I don't mind having the two with separate providers, as I'm nearly 40 now though I assume whichever I choose I'll have to stay with as transferring to a new provider counts as opening a new account, which isn't allowed under current rules after 40.

eskbanker

OldManLogan said:

Thank you, that's really helpful. I currently have an ISA with Vanguard that I invest in monthly, I chose Vanguard purely for the slightly lower fees as I knew I just wanted a simple multi asset fund. When I started with the LISA I made the decision to use the cash one which has caused problems now in terms of available transfers. Had I planned a bit more ahead I probably would have just opened an ISA and LISA with AJ Bell. I don't mind having the two with separate providers, as I'm nearly 40 now though I assume whichever I choose I'll have to stay with as transferring to a new provider counts as opening a new account, which isn't allowed under current rules after 40.

The scheme rules themselves allow new LISAs to be opened after 40 if they're to be used for transferring in an existing LISA, but most providers (especially the S&S ones) seem to be unable or unwilling to accept such transfers.

https://www.gov.uk/guidance/managing-lifetime-isa-applications-and-accounts#who-can-open-a-lifetime-isa

Individuals who are 40 or older

Individuals who are 40 or older are not eligible to open a Lifetime ISA. They can however open an account to receive:

• a transfer from a Lifetime ISA that the investor opened before they were 40
• [...]

OldManLogan

eskbanker said:

OldManLogan said:

Thank you, that's really helpful. I currently have an ISA with Vanguard that I invest in monthly, I chose Vanguard purely for the slightly lower fees as I knew I just wanted a simple multi asset fund. When I started with the LISA I made the decision to use the cash one which has caused problems now in terms of available transfers. Had I planned a bit more ahead I probably would have just opened an ISA and LISA with AJ Bell. I don't mind having the two with separate providers, as I'm nearly 40 now though I assume whichever I choose I'll have to stay with as transferring to a new provider counts as opening a new account, which isn't allowed under current rules after 40.

The scheme rules themselves allow new LISAs to be opened after 40 if they're to be used for transferring in an existing LISA, but most providers (especially the S&S ones) seem to be unable or unwilling to accept such transfers.

https://www.gov.uk/guidance/managing-lifetime-isa-applications-and-accounts#who-can-open-a-lifetime-isa

Individuals who are 40 or older

Individuals who are 40 or older are not eligible to open a Lifetime ISA. They can however open an account to receive:

• a transfer from a Lifetime ISA that the investor opened before they were 40
• [...]

Interesting, I was told by AJ Bell that they wouldn't accept any transfers in after 40 as it counted as opening an account, good to know the rules state different although as you say most seem unwilling to do so

Alexland

I agree the way EQi present their charges could be better but they are very clear that fund trading is free and when your LISA account gets big enough they will cap the charges at £10/qtr so for funds they should be cheaper than AJ Bell. For the £1.50 regular trading rate they probably mean for exchange traded shares not funds. Even if it did apply to funds (which is unlikely) you could get around it by doing manual adhoc trades each month. I can't vouch for EQi's service as our LISAs are with AJ Bell and it's not enough of a saving to be worth moving with time out of the market as EQi don't accept stock transfers. We have around £25k each in an ETF for which AJ Bell will now cap at £42 pa and we do 5 scheduled £1.50 trades pa so only £9.50 pa more than EQi. The service from AJ Bell is fairly good.
Ps I deliberately have our different types of accounts with different providers to increase protection and take advantage of different charge models.

Albermarle

I agree the way EQi present their charges could be better but they are very clear that fund trading is free

I notice EQi seems to be getting more mentions recently for some reason . So I had a look and yes their charging structure is more complicated than usual, and in fact fund buying is free but not fund selling , which is a bit strange .

Mutual Fund (Unit Trust and OEICs) Sales£10.99

Mutual Fund (Unit Trust and OEICs) Purchases	Free

noclaf

Op, I am in a similar boat to you (including age), I posted a thread about this recently and the helpful responses from the guys on here (some have posted above) led me to go with AJ Bell...transfer from my Skipton Lisa still in progress. The only reason I picked AJ Bell is due to some slightly negative comments I've read online about EQI's platform ..don't let that put you off, I don't need bells and whistles personally but I like a platform that is easy and efficient to use e.g: Vanguard' S&SISA platform..nothing too fancy and a unfussy layout but IMO does the job well.

Alexland

Albermarle said:
fund buying is free but not fund selling , which is a bit strange .

Not a problem for 20+ years