Help picking an investment

annabanana82

I apologise in advance if this is a bit of a brain dump but I will try and be concise.
I have now decided to open a S&S LISA. This is a long term investment so will be invested for 21/22 years.
I want something separate to my work pension which is DB, and I'm unable to access any further employer contributions to improve my pension.
I have adequate cash savings for emergencies.
I've picked a LISA to help fund my retirement and at the moment I can't afford to lock away more than £4k a year, so seems best fit.

I can add £4k as an initial lump sum, thereafter (next FY) I plan to add £100pm topping up with a lump sum as much as I can afford prior to that FY ending.
Am I better drip feeding or adding lump sum(s)? 

I'm looking at either AJ Bell or HL, I can see different charges .25% and .45%, what benefits are there with paying more through HL?

I don't know why, but I feel quite drawn to the Vanguard LS funds, but open to other suggestions to research, so far I think I'm needing to look at global funds (not sure entirely how compatible with VLS that is)?
I am aware with the timeline I should be okay with some higher risk options, however I also know myself and not sure how I'd feel seeing my investments plummet - I fully appreciate this is a head/heart thing and I need to engage my head not emotions, and there will undoubtedly be falls over the next 20 years. 

Random/stupid one If games workshop shares drop again, can I buy them through a LISA, or would I be better off buying them through another S&S ISA, can I even have both at some point in future and contribute £4/£16k per FY - assuming I'm ever that well off!

Hopefully that all makes sense but will try and clarify Amy points if need be.
TY

dunstonh

Am I better drip feeding or adding lump sum(s)? 

In the scheme of things it wont really matter.   However, statistically, you get more by paying in as soon as you have the money.  

I'm looking at either AJ Bell or HL, I can see different charges .25% and .45%, what benefits are there with paying more through HL?

Platforms are a service provider.   They provide the software and support but they all offer the same investments.  So, the key differences are the quality of software, support and charges.

I don't know why, but I feel quite drawn to the Vanguard LS funds, but open to other suggestions to research, so far I think I'm needing to look at global funds (not sure entirely how compatible with VLS that is)?

VLS40,60 & 80 are ok.  Many people like them but others prefer the alternatives offered by HSBC, L&G, Blackrock and Liontrust.

All of them contain global funds.   

I am aware with the timeline I should be okay with some higher risk options, however I also know myself and not sure how I'd feel seeing my investments plummet - I fully appreciate this is a head/heart thing and I need to engage my head not emotions, and there will undoubtedly be falls over the next 20 years. 

Probably around 3 very major crashes and several typical crashes on top and a bucketload of corrections.  

Random/stupid one If games workshop shares drop again, can I buy them through a LISA, or would I be better off buying them through another S&S ISA, can I even have both at some point in future and contribute £4/£16k per FY - assuming I'm ever that well off!

Why on earth would you want to?  Tax wrapper is largely irrelevant.    The reason why you would want to engage in something like that is more of a concern.

annabanana82

dunstonh said:

Am I better drip feeding or adding lump sum(s)? 

In the scheme of things it wont really matter.   However, statistically, you get more by paying in as soon as you have the money.  

I'm looking at either AJ Bell or HL, I can see different charges .25% and .45%, what benefits are there with paying more through HL?

Platforms are a service provider.   They provide the software and support but they all offer the same investments.  So, the key differences are the quality of software, support and charges.

I don't know why, but I feel quite drawn to the Vanguard LS funds, but open to other suggestions to research, so far I think I'm needing to look at global funds (not sure entirely how compatible with VLS that is)?

VLS40,60 & 80 are ok.  Many people like them but others prefer the alternatives offered by HSBC, L&G, Blackrock and Liontrust.

All of them contain global funds.   

I am aware with the timeline I should be okay with some higher risk options, however I also know myself and not sure how I'd feel seeing my investments plummet - I fully appreciate this is a head/heart thing and I need to engage my head not emotions, and there will undoubtedly be falls over the next 20 years. 

Probably around 3 very major crashes and several typical crashes on top and a bucketload of corrections.  

Random/stupid one If games workshop shares drop again, can I buy them through a LISA, or would I be better off buying them through another S&S ISA, can I even have both at some point in future and contribute £4/£16k per FY - assuming I'm ever that well off!

Why on earth would you want to?  Tax wrapper is largely irrelevant.    The reason why you would want to engage in something like that is more of a concern.

Thank you for your help, I'll look into the  HSBC global one, I seem to be more comfortable with familiarity.

With Games Workshop, that was more of query for my Husband, too old for LISA and has a much higher risk level than me. Games workshop is a brand he follows quite closely and wishes he'd bought shares in before they went as high as they are/have done. They seem to average around £85 a share but did drop to £35 last March. I'd be more inclined to purchase if they were to drop again and invest a few hundred pounds rather than £1k+ 
I guess ultimately I wouldn't be fussed having them in a wrapper in my name and I have no desire to buy any other individual shares.

dunstonh

Games workshop is a brand he follows quite closely and wishes he'd bought shares in before they went as high as they are/have done.

Would he have been one of those that made money or one that lost money? (such as the guy in the Telegraph last week that lost £170k).

They seem to average around £85 a share but did drop to £35 last March. I'd be more inclined to purchase if they were to drop again and invest a few hundred pounds rather than £1k+

With the share price being manipulated by external players, it is impossible to say whether the share price is a relatively accurate valuation or not.   it is unlikely that he would not be in a position to decide that for himself.       Trading is more akin to gambling than it is to investing.

Alexland

annabanana82 said:

I'm looking at either AJ Bell or HL, I can see different charges .25% and .45%, what benefits are there with paying more through HL?

Don't forget that AJ Bell charge £1.50 for buying or selling traditional OEIC funds but with HL it's free so while your LISA is low value you might find that HL are cheaper but once it gets bigger then AJ Bell will be cheaper as the occasional £1.50 is less significant than the 0.20% platform fee saving on a large account. Try and minimise the number of £1.50 trades you need to do to invest your contribution or bonus money (added into the account as cash a month or two later). Remember to always leave enough cash to pay the ongoing fees with some estimate for growth until you can next contribute unless you have arranged with them to pay them out of a dealing account.

Once the LISA gets big enough they both cap their ongoing charges for holding an exchange trades asset such an ETF or IT but then both platforms charge more (either £9.95 at AJ Bell or £11.95 at HL) to buy or sell those assets but a workaround is that if you use the AJ Bell regular investing feature you can still invest either a contribution or bonus for £1.50 once a month and then cancel after it has run once. HL also have a regular investing option but it is very limited on what it can be used against and can only be used for the contribution not bonus. HL's cap on exchange traded assets is higher.

Our LISAs are with AJ Bell invested in an accumulation ETF having transferred out of HL once the accounts were big enough but remember that AJ Bell only accept transfer requests while you are still under 40.

annabanana82

dunstonh said:

Games workshop is a brand he follows quite closely and wishes he'd bought shares in before they went as high as they are/have done.

Would he have been one of those that made money or one that lost money? (such as the guy in the Telegraph last week that lost £170k).

They seem to average around £85 a share but did drop to £35 last March. I'd be more inclined to purchase if they were to drop again and invest a few hundred pounds rather than £1k+

With the share price being manipulated by external players, it is impossible to say whether the share price is a relatively accurate valuation or not.   it is unlikely that he would not be in a position to decide that for himself.       Trading is more akin to gambling than it is to investing.

For him it is more a case of just owning the shares rather than buying and selling, I don't think there would be any share holder benefits for the amount we would be able to hold. It would essentially be something else for him to "collect" on the plus side it wouldn't be taking up space in my house like his other bits.
But as I said he's more riskier than I, and whilst he's not earning he's not going to be investing in companies, so maybe a moot point for now but thank you for your pointers.

annabanana82

Alexland said:

annabanana82 said:

I'm looking at either AJ Bell or HL, I can see different charges .25% and .45%, what benefits are there with paying more through HL?

Don't forget that AJ Bell charge £1.50 for buying or selling traditional OEIC funds but with HL it's free so while your LISA is low value you might find that HL are cheaper but once it gets bigger then AJ Bell will be cheaper as the occasional £1.50 is less significant than the 0.20% platform fee saving on a large account. Try and minimise the number of £1.50 trades you need to do to invest your contribution or bonus money (added into the account as cash a month or two later). Remember to always leave enough cash to pay the ongoing fees with some estimate for growth until you can next contribute unless you have arranged with them to pay them out of a dealing account.

Once the LISA gets big enough they both cap their ongoing charges for holding an exchange trades asset such an ETF or IT but then both platforms charge more (either £9.95 at AJ Bell or £11.95 at HL) to buy or sell those assets but a workaround is that if you use the AJ Bell regular investing feature you can still invest either a contribution or bonus for £1.50 once a month and then cancel after it has run once. HL also have a regular investing option but it is very limited on what it can be used against and can only be used for the contribution not bonus. HL's cap on exchange traded assets is higher.

Our LISAs are with AJ Bell invested in an accumulation ETF having transferred out of HL once the accounts were big enough but remember that AJ Bell only accept transfer requests while you are still under 40.

Thank you that's really helpful, I now have less than 18 months until 40 so may have to consider some extra costs initially with AJ Bell to allow what sounds like more flexibility.
I was planning to put £100 for fees aside and then top up once I had a better idea of ongoing costs once started rather than using my dealing account. 

I really wish my parents had been a bit more savvy on all of this rather than just avoiding risk and sticking with cash savings, as I'd have a better idea about it all now. But I am trying to learn this with my Children so hopefully they'll be wiser and wealthier than me!

Alexland

annabanana82 said:

Thank you that's really helpful, I now have less than 18 months until 40 so may have to consider some extra costs initially with AJ Bell to allow what sounds like more flexibility.

Yes I wondered that from your username. The service quality from HL and AJ Bell is equivalent and I still use the HL app watchlist (no need to be a customer) to track all our investments across cheaper platforms. Running a LISA is initially a bit expensive but it gets better with time. We have been using the full LISA allowance since they launched 4 years ago and with the capping and using that scheduled trade workaround our total platform costs are now under 0.20% of the investment value and will reduce as a percentage as we contribute more each year.

We invest in the Lyxor LCWL world tracker ETF which accumulates dividends (to reduce platform trade costs) and has an ongoing charge of just 0.12%. So far our investment gains have been more than the bonus although the market has been very good in recent years (if you ignore that covid crash, oh and one or more corrections).

annabanana82 said:

I was planning to put £100 for fees aside and then top up once I had a better idea of ongoing costs once started rather than using my dealing account.

Yup seems reasonable although you won't initially need that much just ensure there is enough to last until you can next contribute sometimes if you have used the full annual allowance until next tax year. We pay the fees from the LISA account cash balance but when we get to age 50 and cannot contribute any more then it will be handy to pay the fees from the dealing account to avoid trade costs in selling down investments to cash within the LISA account.

annabanana82 said:

I really wish my parents had been a bit more savvy on all of this rather than just avoiding risk and sticking with cash savings, as I'd have a better idea about it all now. But I am trying to learn this with my Children so hopefully they'll be wiser and wealthier than me!

All my parents ever had was employee purchase shares in a company that never recovered from the global financial crisis which taught me a lesson on how concentration risk can lead to permanent loss. They are of a generation that had defined benefits pensions so never had to worry about building up substantial investments. When I think back to how much better I could have managed my finances if I knew then what I now know. Nevermind we (and our kids) are doing fine and likely better than average so haven't really got anything to complain about.

Good luck with your LISA.