A reason NOT to use InvestEngine?

B0bbyEwing

Bit of background info as to where I'm coming from - 

I'm trying to re-jig the finances where we'll have X-amount in cash & anything beyond that can get thrown in a S&S ISA to hopefully do better than savings interest rates. 
If our cash account dips below the amount we set, we simply don't put any left over cash in to the S&S ISA until the cash account is topped up again.

Now these S&S ISA deposits could me monthly, half yearly, yearly or whatever, it really doesn't matter. With some companies it wont make a difference, with others it may be cheaper to go once per year.

So I checked out: https://www.moneysavingexpert.com/savings/stocks-shares-isas/

And got the too-good-to-be-true feeling with InvestEngine.

I have my Lifetime ISA with AJ Bell so was originally thinking about them, but when I looked at the charges, I used £5k as a rough random figure with 1 trade per year & it said £14/year on charges vs £0 with IE.
Ok, 10 years is "only" £140 so on the one hand not a massive amount but on the other hand, I don't particularly want to throw money away for the sake of it. A can of diet coke was 59p in Aldi, same can £1 in Sainsbury's. Why buy it in Sainsbury's? Kind of thing. Note* - I'm not honestly asking to get in to any silly reasons why you'd buy in Sainsbury's, the point should be clear.



Now I don't really know enough about investing to go cherry pinking various funds & building my own portfolio. I just buy in to a general world tracker of a risk I select (e.g. HSBC Global Strategy <risk level>) which is what I do for my Lifetime ISA & SIPP with Fidelity and what I would do here.

But it looks like IE only deal in ETFs? I'm not familiar with them to be honest so if I understand correctly, would "Vanguard FTSE Developed World - VHVG" be a comparable investment if I was wanting some kind of global tracker?

The lack of charges sound too good to be true. I'm pretty much just wanting somewhere to chuck spare cash, invested in a global tracker at a cheap (free is always ideal) rate.

masonic

VHVG is developed world only and equities only. It doesn't include emerging markets or bonds. If you are ok with that then it is a cheap way to get exposure to global developed markets.

wmb194

A reason not to use it is because it's a relatively early stage start-up so there's a risk it could go out of business. This shouldn't be a problem as customer assets will be ring-fenced from company assets and liabilities but you might go some months where you won't have access to your investments whilst it's being wound up - they would probably be transferred to another broker. It recently raised £1.3m via CrowdCube.

https://www.crowdcube.com/companies/investengine-holdings-ltd

Having said this I've been using it for a year or so and it has done what is said on the tin so far.

ETFs are another type of collective investment vehicle and there are lots of options, usually through some sort of index tracking.

B0bbyEwing

masonic said:

VHVG is developed world only and equities only. It doesn't include emerging markets or bonds. If you are ok with that then it is a cheap way to get exposure to global developed markets.

Thanks for the input. 

If I was looking along the lines of what I mentioned earlier I have in my L-ISA, what examples would I be looking at in terms of ETFs?
Or isn't there any examples? Am I asking to compare apples with pears?

wmb194 said:

A reason not to use it is because it's a relatively early stage start-up so there's a risk it could go out of business. 

Ah fair enough. Wasn't sure how new it was.

wmb194 said:

Having said this I've been using it for a year or so and it has done what is said on the tin so far.

I'm currently at a stage where we wont be talking about huge sums anyway.

Will need to weigh things up & see whether it's worth it over something more established.

masonic

B0bbyEwing said:

masonic said:

VHVG is developed world only and equities only. It doesn't include emerging markets or bonds. If you are ok with that then it is a cheap way to get exposure to global developed markets.

Thanks for the input. 

If I was looking along the lines of what I mentioned earlier I have in my L-ISA, what examples would I be looking at in terms of ETFs?
Or isn't there any examples? Am I asking to compare apples with pears?

There aren't any multi-asset ETFs. You won't find anything equivalent to HSBC Global Strategy <risk level>.

B0bbyEwing said:

wmb194 said:

Having said this I've been using it for a year or so and it has done what is said on the tin so far.

I'm currently at a stage where we wont be talking about huge sums anyway.

Will need to weigh things up & see whether it's worth it over something more established.

If you're talking a few thousand or even a few tens of thousands then it isn't much of an issue for a long term investment you won't need to access for many years. If IE fails, then there will be a period of months where you won't be able to access your investments, but ultimately they'd be moved to a different provider. For large amounts (6-figures upwards), there is a risk of FSCS compensation not covering costs of winding up the platform plus any account imbalances.

Rollinghome

B0bbyEwing said:

Now I don't really know enough about investing to go cherry pinking various funds & building my own portfolio. I just buy in to a general world tracker of a risk I select (e.g. HSBC Global Strategy <risk level>) which is what I do for my Lifetime ISA & SIPP with Fidelity and what I would do here.

But it looks like IE only deal in ETFs? I'm not familiar with them to be honest so if I understand correctly, would "Vanguard FTSE Developed World - VHVG" be a comparable investment if I was wanting some kind of global tracker?

The lack of charges sound too good to be true. I'm pretty much just wanting somewhere to chuck spare cash, invested in a global tracker at a cheap (free is always ideal) rate.

As far as I can see, HSBC Global Strategy funds aren't global trackers so not comparable to VHVG, which is. They are multi asset portfolios investing in trackers and other instruments.

To be clear, Invest Engine has no platform or transaction fees, but the ETFs will themselves have fees. That all for DIY. But for a managed portfolio, I understand IE charge 0.25% pa extra for one of their portfolios of ETFs..

Edit. Which Masonic has pretty much pointed out already. There are of course various other managers similar to the HSBC range that offer portfolios of trackers, using either funds or ETFs, but with different aims.

AndyTh_2

B0bbyEwing said:

Bit of background info as to where I'm coming from - 

I'm trying to re-jig the finances where we'll have X-amount in cash & anything beyond that can get thrown in a S&S ISA to hopefully do better than savings interest rates. 
If our cash account dips below the amount we set, we simply don't put any left over cash in to the S&S ISA until the cash account is topped up again.

Now these S&S ISA deposits could me monthly, half yearly, yearly or whatever, it really doesn't matter. With some companies it wont make a difference, with others it may be cheaper to go once per year.

So I checked out: https://www.moneysavingexpert.com/savings/stocks-shares-isas/

And got the too-good-to-be-true feeling with InvestEngine.

I have my Lifetime ISA with AJ Bell so was originally thinking about them, but when I looked at the charges, I used £5k as a rough random figure with 1 trade per year & it said £14/year on charges vs £0 with IE.
Ok, 10 years is "only" £140 so on the one hand not a massive amount but on the other hand, I don't particularly want to throw money away for the sake of it. A can of diet coke was 59p in Aldi, same can £1 in Sainsbury's. Why buy it in Sainsbury's? Kind of thing. Note* - I'm not honestly asking to get in to any silly reasons why you'd buy in Sainsbury's, the point should be clear.



Now I don't really know enough about investing to go cherry pinking various funds & building my own portfolio. I just buy in to a general world tracker of a risk I select (e.g. HSBC Global Strategy <risk level>) which is what I do for my Lifetime ISA & SIPP with Fidelity and what I would do here.

But it looks like IE only deal in ETFs? I'm not familiar with them to be honest so if I understand correctly, would "Vanguard FTSE Developed World - VHVG" be a comparable investment if I was wanting some kind of global tracker?

The lack of charges sound too good to be true. I'm pretty much just wanting somewhere to chuck spare cash, invested in a global tracker at a cheap (free is always ideal) rate.

Vanguard FTSE All-World UCITS ETF (VWRL distributing or VWRP accumulation) is a global index tracker available. However the HSBC risk level ones are probably including a % bonds based on perceived risk level.

You may be able to emulate that with bond ETFs with your own % weighting between a global equity ETF and global or multiple bond ETFs, but it's up to you to manage that.

Monevator has a good list of cheap funds and ETFs for different indexes https://monevator.com/low-cost-index-trackers/

InvestEngine is a much smaller broker in comparison, and so may and has previously experienced trade volume issues leading to short term illiquidity in being able to buy or sell. They may grow though, and with a larger number of users may be able to compensate for that.

Also InvestEngine doesn't currently do LISAs https://help.investengine.com/hc/en-gb/articles/5009702837661-Do-you-offer-Lifetime-ISA-LISA-

masonic

AndyTh_2 said:

B0bbyEwing said:

Bit of background info as to where I'm coming from - 

I'm trying to re-jig the finances where we'll have X-amount in cash & anything beyond that can get thrown in a S&S ISA to hopefully do better than savings interest rates. 
If our cash account dips below the amount we set, we simply don't put any left over cash in to the S&S ISA until the cash account is topped up again.

Now these S&S ISA deposits could me monthly, half yearly, yearly or whatever, it really doesn't matter. With some companies it wont make a difference, with others it may be cheaper to go once per year.

So I checked out: https://www.moneysavingexpert.com/savings/stocks-shares-isas/

And got the too-good-to-be-true feeling with InvestEngine.

I have my Lifetime ISA with AJ Bell so was originally thinking about them, but when I looked at the charges, I used £5k as a rough random figure with 1 trade per year & it said £14/year on charges vs £0 with IE.
Ok, 10 years is "only" £140 so on the one hand not a massive amount but on the other hand, I don't particularly want to throw money away for the sake of it. A can of diet coke was 59p in Aldi, same can £1 in Sainsbury's. Why buy it in Sainsbury's? Kind of thing. Note* - I'm not honestly asking to get in to any silly reasons why you'd buy in Sainsbury's, the point should be clear.



Now I don't really know enough about investing to go cherry pinking various funds & building my own portfolio. I just buy in to a general world tracker of a risk I select (e.g. HSBC Global Strategy <risk level>) which is what I do for my Lifetime ISA & SIPP with Fidelity and what I would do here.

But it looks like IE only deal in ETFs? I'm not familiar with them to be honest so if I understand correctly, would "Vanguard FTSE Developed World - VHVG" be a comparable investment if I was wanting some kind of global tracker?

The lack of charges sound too good to be true. I'm pretty much just wanting somewhere to chuck spare cash, invested in a global tracker at a cheap (free is always ideal) rate.

Vanguard FTSE All-World UCITS ETF (VWRL distributing or VWRP accumulation) is a global index tracker available. However the HSBC risk level ones are probably including a % bonds based on perceived risk level.

...with a considerable jump in management fee. It would be more cost-efficient to combine VHVG with an emerging markets ETF.

AndyTh_2 said:

InvestEngine is a much smaller broker in comparison, and so may and has previously experienced trade volume issues leading to short term illiquidity in being able to buy or sell. They may grow though, and with a larger number of users may be able to compensate for that.

They don't do live orders, so trades are pooled and conducted once a day. That's quite a difference in liquidity compared to being able to buy or sell in seconds. Has InvestEngine previously had difficulties fulfilling orders on their normal timescales?

AndyTh_2

masonic said:

AndyTh_2 said:

B0bbyEwing said:

Bit of background info as to where I'm coming from - 

I'm trying to re-jig the finances where we'll have X-amount in cash & anything beyond that can get thrown in a S&S ISA to hopefully do better than savings interest rates. 
If our cash account dips below the amount we set, we simply don't put any left over cash in to the S&S ISA until the cash account is topped up again.

Now these S&S ISA deposits could me monthly, half yearly, yearly or whatever, it really doesn't matter. With some companies it wont make a difference, with others it may be cheaper to go once per year.

So I checked out: https://www.moneysavingexpert.com/savings/stocks-shares-isas/

And got the too-good-to-be-true feeling with InvestEngine.

I have my Lifetime ISA with AJ Bell so was originally thinking about them, but when I looked at the charges, I used £5k as a rough random figure with 1 trade per year & it said £14/year on charges vs £0 with IE.
Ok, 10 years is "only" £140 so on the one hand not a massive amount but on the other hand, I don't particularly want to throw money away for the sake of it. A can of diet coke was 59p in Aldi, same can £1 in Sainsbury's. Why buy it in Sainsbury's? Kind of thing. Note* - I'm not honestly asking to get in to any silly reasons why you'd buy in Sainsbury's, the point should be clear.



Now I don't really know enough about investing to go cherry pinking various funds & building my own portfolio. I just buy in to a general world tracker of a risk I select (e.g. HSBC Global Strategy <risk level>) which is what I do for my Lifetime ISA & SIPP with Fidelity and what I would do here.

But it looks like IE only deal in ETFs? I'm not familiar with them to be honest so if I understand correctly, would "Vanguard FTSE Developed World - VHVG" be a comparable investment if I was wanting some kind of global tracker?

The lack of charges sound too good to be true. I'm pretty much just wanting somewhere to chuck spare cash, invested in a global tracker at a cheap (free is always ideal) rate.

Vanguard FTSE All-World UCITS ETF (VWRL distributing or VWRP accumulation) is a global index tracker available. However the HSBC risk level ones are probably including a % bonds based on perceived risk level.

...with a considerable jump in management fee. It would be more cost-efficient to combine VHVG with an emerging markets ETF.

Yes but if you want to keep meeting the global index with two funds, you'd have to rebalance every so often, which may be not worth the time. It's a fine choice to make though.

I'm merely saying that a global index ETF matches a global index, which a developed world one doesn't. HSBC Global Strategy covers both developed and emerging markets so VHVG wasn't comparable.

The monevator link gives enough info to show costs for the different index trackers

masonic

AndyTh_2 said:

masonic said:

AndyTh_2 said:

B0bbyEwing said:

Bit of background info as to where I'm coming from - 

I'm trying to re-jig the finances where we'll have X-amount in cash & anything beyond that can get thrown in a S&S ISA to hopefully do better than savings interest rates. 
If our cash account dips below the amount we set, we simply don't put any left over cash in to the S&S ISA until the cash account is topped up again.

Now these S&S ISA deposits could me monthly, half yearly, yearly or whatever, it really doesn't matter. With some companies it wont make a difference, with others it may be cheaper to go once per year.

So I checked out: https://www.moneysavingexpert.com/savings/stocks-shares-isas/

And got the too-good-to-be-true feeling with InvestEngine.

I have my Lifetime ISA with AJ Bell so was originally thinking about them, but when I looked at the charges, I used £5k as a rough random figure with 1 trade per year & it said £14/year on charges vs £0 with IE.
Ok, 10 years is "only" £140 so on the one hand not a massive amount but on the other hand, I don't particularly want to throw money away for the sake of it. A can of diet coke was 59p in Aldi, same can £1 in Sainsbury's. Why buy it in Sainsbury's? Kind of thing. Note* - I'm not honestly asking to get in to any silly reasons why you'd buy in Sainsbury's, the point should be clear.



Now I don't really know enough about investing to go cherry pinking various funds & building my own portfolio. I just buy in to a general world tracker of a risk I select (e.g. HSBC Global Strategy <risk level>) which is what I do for my Lifetime ISA & SIPP with Fidelity and what I would do here.

But it looks like IE only deal in ETFs? I'm not familiar with them to be honest so if I understand correctly, would "Vanguard FTSE Developed World - VHVG" be a comparable investment if I was wanting some kind of global tracker?

The lack of charges sound too good to be true. I'm pretty much just wanting somewhere to chuck spare cash, invested in a global tracker at a cheap (free is always ideal) rate.

Vanguard FTSE All-World UCITS ETF (VWRL distributing or VWRP accumulation) is a global index tracker available. However the HSBC risk level ones are probably including a % bonds based on perceived risk level.

...with a considerable jump in management fee. It would be more cost-efficient to combine VHVG with an emerging markets ETF.

Yes but if you want to keep meeting the global index with two funds, you'd have to rebalance every so often, which may be not worth the time. It's a fine choice to make though.

Not true if you hold the two funds in proportion to their global market cap. They will stay in balance.

AndyTh_2 said:

I'm merely saying that a global index ETF matches a global index, which a developed world one doesn't. HSBC Global Strategy covers both developed and emerging markets so VHVG wasn't comparable.

Neither was VWRL, as HSBC Global Strategy contains property and bonds, which neither VHVG nor VWRL do. The HSBC Global Strategy funds are actively managed over the market cycle and have a controlled risk profile, whereas the two ETFs track indexes.

I was more interested in the following comment:

AndyTh_2 said:

InvestEngine is a much smaller broker in comparison, and so may and has previously experienced trade volume issues leading to short term illiquidity in being able to buy or sell.

Could you provide more details about the previous liquidity issues? Not being able to buy or sell is a bigger issue than 0.1% on management fees.

AndyTh_2

masonic said:

AndyTh_2 said:

masonic said:

AndyTh_2 said:

B0bbyEwing said:

Bit of background info as to where I'm coming from - 

I'm trying to re-jig the finances where we'll have X-amount in cash & anything beyond that can get thrown in a S&S ISA to hopefully do better than savings interest rates. 
If our cash account dips below the amount we set, we simply don't put any left over cash in to the S&S ISA until the cash account is topped up again.

Now these S&S ISA deposits could me monthly, half yearly, yearly or whatever, it really doesn't matter. With some companies it wont make a difference, with others it may be cheaper to go once per year.

So I checked out: https://www.moneysavingexpert.com/savings/stocks-shares-isas/

And got the too-good-to-be-true feeling with InvestEngine.

I have my Lifetime ISA with AJ Bell so was originally thinking about them, but when I looked at the charges, I used £5k as a rough random figure with 1 trade per year & it said £14/year on charges vs £0 with IE.
Ok, 10 years is "only" £140 so on the one hand not a massive amount but on the other hand, I don't particularly want to throw money away for the sake of it. A can of diet coke was 59p in Aldi, same can £1 in Sainsbury's. Why buy it in Sainsbury's? Kind of thing. Note* - I'm not honestly asking to get in to any silly reasons why you'd buy in Sainsbury's, the point should be clear.



Now I don't really know enough about investing to go cherry pinking various funds & building my own portfolio. I just buy in to a general world tracker of a risk I select (e.g. HSBC Global Strategy <risk level>) which is what I do for my Lifetime ISA & SIPP with Fidelity and what I would do here.

But it looks like IE only deal in ETFs? I'm not familiar with them to be honest so if I understand correctly, would "Vanguard FTSE Developed World - VHVG" be a comparable investment if I was wanting some kind of global tracker?

The lack of charges sound too good to be true. I'm pretty much just wanting somewhere to chuck spare cash, invested in a global tracker at a cheap (free is always ideal) rate.

Vanguard FTSE All-World UCITS ETF (VWRL distributing or VWRP accumulation) is a global index tracker available. However the HSBC risk level ones are probably including a % bonds based on perceived risk level.

...with a considerable jump in management fee. It would be more cost-efficient to combine VHVG with an emerging markets ETF.

Yes but if you want to keep meeting the global index with two funds, you'd have to rebalance every so often, which may be not worth the time. It's a fine choice to make though.

Not true if you hold the two funds in proportion to their global market cap. They will stay in balance.

AndyTh_2 said:

I'm merely saying that a global index ETF matches a global index, which a developed world one doesn't. HSBC Global Strategy covers both developed and emerging markets so VHVG wasn't comparable.

Neither was VWRL, as HSBC Global Strategy contains property and bonds, which neither VHVG nor VWRL do. The HSBC Global Strategy funds are actively managed over the market cycle and have a controlled risk profile, whereas the two ETFs track indexes.

I was more interested in the following comment:

AndyTh_2 said:

InvestEngine is a much smaller broker in comparison, and so may and has previously experienced trade volume issues leading to short term illiquidity in being able to buy or sell.

Could you provide more details about the previous liquidity issues? Not being able to buy or sell is a bigger issue than 0.1% on management fees.

Maybe I mistook the news I heard for Freetrade instead, as it makes more sense that a fixed time of day bulk purchase/sell has less unexpected illiquidity