Opening new stocks and share ISA as POA is proving impossible and is a disgrace

dunstonh

Johnjdc said:

What makes you think a Money Market Fund will pay 5% with interest rates expected to be around 3.75% by year end? Subtract the management fee and the platform fee and you're likely better off in an ISA.

Not necessarily.  RLSTMM benchmarks to just above SONIA.    If you have a 0.20% platform charge then its still going to beat an awful lot of cash ISAs.

Johnjdc

dunstonh said:

Johnjdc said:

What makes you think a Money Market Fund will pay 5% with interest rates expected to be around 3.75% by year end? Subtract the management fee and the platform fee and you're likely better off in an ISA.

Not necessarily.  RLSTMM benchmarks to just above SONIA.    If you have a 0.20% platform charge then its still going to beat an awful lot of cash ISAs.

So Sonia is currently 4.22%, subtract a 0.2% platform fee and RL's 0.1% charge and you are well below the best instant access ISAs.

masonic

Johnjdc said:

dunstonh said:

Johnjdc said:

What makes you think a Money Market Fund will pay 5% with interest rates expected to be around 3.75% by year end? Subtract the management fee and the platform fee and you're likely better off in an ISA.

Not necessarily.  RLSTMM benchmarks to just above SONIA.    If you have a 0.20% platform charge then its still going to beat an awful lot of cash ISAs.

So Sonia is currently 4.22%, subtract a 0.2% platform fee and RL's 0.1% charge and you are well below the best instant access ISAs.

RLSTMM doesn't invest in SONIA (e.g. through a derivative). It just uses SONIA as its benchmark. Look at its top 10 holdings and their respective YTM. Its returns can be above or below SONIA. It has tended to return more than SONIA after its fund fee. The outperformance is likely to be greater during a period of falling rates.

The best 1 year fixed cash ISA is paying just 4.35%, whereas the best clean paying easy access rate is 4.64%, which gives you a flavour for what savings providers think will happen to rates over the next 12 months. RLSTMM is currently returning (after fund fees) somewhere between those two rates depending on how you draw your tangent on the performance chart.

Whereas the median easy access cash ISA rate is about 3.1%, meaning around 100 easy access cash ISAs are paying even less than that. So certainly true to say RLSTMM is going to beat an awful lot of cash ISAs. If you are apathetic and do not wish to put the work in moving your money around, you can get a pretty good deal staying put in such a fund, providing you are comfortable with the slightly higher risk vs cash.

GrubbyGirl_2

With regards to not being able to open a S&S ISA at an attorney I wonder if it is because there is always a possibility to lose money (albeit unlikely over a period of time).  Attorney's are required to take all care in safeguarding the individuals money and a S&S ISA may be considered too risky and gambling with money that is not theirs.  Just a thought

wmb194

GrubbyGirl_2 said:

With regards to not being able to open a S&S ISA at an attorney I wonder if it is because there is always a possibility to lose money (albeit unlikely over a period of time).  Attorney's are required to take all care in safeguarding the individuals money and a S&S ISA may be considered too risky and gambling with money that is not theirs.  Just a thought

Shouldn’t be, that should depend on what you invest in e.g., investing in gilts and Treasury bills isn’t considered risky but you need a stockbroker to buy them for you.

 The impression I get is that many institutions don’t want the aggravation of dealing with these situations.

Johnjdc

masonic said:

Johnjdc said:

dunstonh said:

Johnjdc said:

What makes you think a Money Market Fund will pay 5% with interest rates expected to be around 3.75% by year end? Subtract the management fee and the platform fee and you're likely better off in an ISA.

Not necessarily.  RLSTMM benchmarks to just above SONIA.    If you have a 0.20% platform charge then its still going to beat an awful lot of cash ISAs.

So Sonia is currently 4.22%, subtract a 0.2% platform fee and RL's 0.1% charge and you are well below the best instant access ISAs.

RLSTMM doesn't invest in SONIA (e.g. through a derivative). It just uses SONIA as its benchmark. Look at its top 10 holdings and their respective YTM. Its returns can be above or below SONIA. It has tended to return more than SONIA after its fund fee. The outperformance is likely to be greater during a period of falling rates.

The best 1 year fixed cash ISA is paying just 4.35%, whereas the best clean paying easy access rate is 4.64%, which gives you a flavour for what savings providers think will happen to rates over the next 12 months. RLSTMM is currently returning (after fund fees) somewhere between those two rates depending on how you draw your tangent on the performance chart.

Whereas the median easy access cash ISA rate is about 3.1%, meaning around 100 easy access cash ISAs are paying even less than that. So certainly true to say RLSTMM is going to beat an awful lot of cash ISAs. If you are apathetic and do not wish to put the work in moving your money around, you can get a pretty good deal staying put in such a fund, providing you are comfortable with the slightly higher risk vs cash.

So the best cash ISA rates will return more than RL after fund and platform fees and therefore that what the original poster is trying to achieve is in any event pointless, unless they were planning to choose a cash ISA using a dartboard rather than by looking at the best available rates.

RL current return from the chart reflects higher interest rates in the recent past. I own some myself as a place to park money awaiting investment within my S&S ISA but I make the annualised return over the last quarter 4.47% before platform fees. Expecting that to fall roughly in line with rates, it is strictly inferior to the best cash ISAs even before accounting for risk.