Isa advice please?

david0203 · 8 January at 11:25AM

Hi all

I am after some advice please, ive got 15-20k to use for a s&s isa this year and wondering Where's best to place it so i don't have to touch it/manage?

Does vanguard offer this service? I say vanguard as its all i hear people talk about or am i best placed with a robo investor?

Thanks

eskbanker · 8 January at 12:57PM

Robo advisers like to position themselves in that way, but it's also readily achieved by buying one of the many multi-asset funds that are aimed at fulfilling most inexperienced investors requirements in one 'fire and forget' product - Vanguard's LifeStrategy range is popular but there are plenty of competitors from HSBC, Blackrock, etc, and then there's a separate decision about which platform to use.

It's effectively the same decisions either way, i.e. which product fits your risk appetite and objectives, and where to hold it, but buying into a mainstream fund on a mainstream platform is likely to be significantly lower cost than the robo equivalent....

Albermarle · 8 January at 1:22PM

Vanguard do offer a service to manage your S&S ISA. I think it costs about 0.3%.

However as suggested in the previous post you could just choose one of their Lifestrategy funds directly.
There is plenty of info about them on the Vanguard website.

You have only heard more about Vanguard and robo advisors as they advertise more.
Are you aware that Vanguard are introducing a minimum charge of £48 pa soon.?

Albermarle · 8 January at 1:23PM

Similar thread here.
Robo isas - vanguard isa life strategy? — MoneySavingExpert Forum

Alexland · 8 January at 2:10PM

If you do decide to invest that lump sum in a multi-asset fund such as from the Vanguard Lifestrategy or HSBC Global Strategy series then it would be cheaper to hold it on iWeb as an Accumulation version (unless you want to draw the income) where they would just charge you a on-off £5 trade fee to make the investment with no ongoing platform fee.

https://www.iweb-sharedealing.co.uk/

https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds

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

The fund manger fees would be the same regardless of if you hold the fund on iWeb or the fund manager's own platform which would often have % ongoing platform fees sometimes with minimum charges as mentioned above.

If you are planning to make regular contributions then it may be cheaper to use Dodl (for Vanguard Life Strategy) at 0.15% (£1 pm min) or HSBC's own platform (for Global Strategy) at 0.25% ongoing at least while the valuation is around this value. If you wanted VLS100 that doesn't seem to be on Dodl but you could perhaps use their cheaper HSBC All World global tracker (although it doesn't have the UK bias). Vanguard's own platform is now looking unattractive for most account valuations.

As a very rough rule of thumb a diversified 100% global equities fund might drop around 50% in a bad crash, an 80% equities fund might drop around 35%-40% and a 60% equities fund might drop around 25% although no market crash is the same some may affect the asset mix differently to others.

A robo would be simpler to setup but around twice or more the ongoing cost.

david0203 · 8 January at 2:58PM

Hi

Firstly thanks for replying with good advice

After reading your comments just a few questions please

With 20k say invested then in say vanguard life strategy is it still worth the fee now it's going to £4 pm?

Between HSBC and vanguard which would you guys head for?

Is it worth opening a few isas up with different providers say the two above and putting 10k in each to spread it out or are the stocks and shares similar but just offered with different platforms

Cheers

jimjames · 8 January at 3:09PM

david0203 said:

With 20k say invested then in say vanguard life strategy is it still worth the fee now it's going to £4 pm?

The fee is only relevant if you hold it with Vanguard, the example Alexland gave above shows if you hold with iWeb instead then it will only cost you a one off £5 fee.

david0203 · 8 January at 3:15PM

jimjames said:

david0203 said:

With 20k say invested then in say vanguard life strategy is it still worth the fee now it's going to £4 pm?

The fee is only relevant if you hold it with Vanguard, the example Alexland gave above shows if you hold with iWeb instead then it will only cost you a one off £5 fee.

Spot on I've never heard of iweb to be honest any research I've had its not snowed up so ill have a look, tbanks Jim James and alexland

Alexland · 8 January at 3:21PM

david0203 said:

With 20k say invested then in say vanguard life strategy is it still worth the fee now it's going to £4 pm?

As above the 0.15% with £4pm minimum only relates to the Vanguard platform. You could buy £20k of VLS fund units on the iWeb platform for just a £5 one off trade. If you don't need the income ensure you get the Accumulation version of the fund to avoid needing to pay £5 each time to reinvest fund distributions.

The VLS fund management fee would be 0.22% on either platform - this is taken from within the funds assets so this is for information only you don't need to think or do anything about paying it.

david0203 said:

Between HSBC and vanguard which would you guys head for?

That's a really tough call - depends if you want the UK bias on the VLS fund. The US shares have done very well in recent years and their valuations are now looking high. The UK bias on VLS helps dilute that but the UK shares have performed poorly recently so are perhaps offering better value or maybe they are just a load of dead old companies. There's no right answer.

david0203 said:

Is it worth opening a few isas up with different providers say the two above and putting 10k in each to spread it out or are the stocks and shares similar but just offered with different platforms

No you are covered up to £85k anyway by FSCS protection if the platform somehow fails to look after your assets. On a whole(ish) market platform such as iWeb you can choose from thousands of investments from loads of fund managers although usually it's best to just pick the one fund that best meets your requirements.

david0203 said:
Spot on I've never heard of iweb to be honest any research I've had its not snowed up so ill have a look, tbanks Jim James and alexland

iWeb is a niche forum favourite for those of us with larger accounts or who trade infrequently. Unlike some of the newbie free ones like T212 or InvestEngine they offer a wide range of investment options including funds.

It's not very well know and a bit old and clunky but it's owned by Lloyds/Halifax who as we know from the financial crisis is too big and important for the UK government to let fail.