Dealing online, plus Chartwell v Hargreaves

Handsome_Homer

Good evening all. I'm a bit confused about all this buying online stuff. A couple of questions, if anyone can help...

I'm going to invest monthly in S&S ISA, either across one or two funds. I would like to do that via a discount broker and I'd like to be able to see my investments online, and even add more money or move to different funds, all online.

The two names that seem to come up most regularly are Chartwell and Hargreaves/HL. HL seems to have better reviews, but with Chartwell I can view my funds online. How to choose between them?

Plus, can anyone explain the difference between these 'fund supermarkets'? Chartwell run one called Cofunds, Fidelity one called Fundssupermarket. What ARE they?

Please? Thank you. H

Jennifer_Jane

Hi there, can't actually answer your question, but just to let you know that if you buy a Legal and General ISA online via Quidco, there is cashback of £110, which is a pretty hot risk-free return:

http://www.quidco.com/legal-general-isas/

Regards
Jen
x

debbie42

My understanding is that H&L are well regarded for funds (not shares: see below). ISTR reading here that Fidelity could be more expensive buying direct than through an IFA, but haven't double checked that. I'm not sure about the others.

I went for H&L for funds, and Selftrade for shares when I was choosing. There have been some discussions on here about such issues, so it may be worth a search.

Note: Selftrade have had referral bonuses in the past: I got one when I applied. If you do go for them then check out the referral threads.

Aegis

Handsome_Homer wrote: »

Good evening all. I'm a bit confused about all this buying online stuff. A couple of questions, if anyone can help...

I'm going to invest monthly in S&S ISA, either across one or two funds. I would like to do that via a discount broker and I'd like to be able to see my investments online, and even add more money or move to different funds, all online.

The two names that seem to come up most regularly are Chartwell and Hargreaves/HL. HL seems to have better reviews, but with Chartwell I can view my funds online. How to choose between them?

You can view your funds online with HL too, unless you mean something I'm too beaten up to appreciate right now! What should set them apart for you is the charging structure. I think HL is generally the best initial discount you can get on a fund, and Chartwell (if I remember correctly) has higher initial charges but lower annual charges... I may be confusing that with something else though!

Plus, can anyone explain the difference between these 'fund supermarkets'? Chartwell run one called Cofunds, Fidelity one called Fundssupermarket. What ARE they?

They're the underlying software which allows you access to the various investment products that are available to you. Essentially it's much the same method in each case, though there will be some functionality differences and maybe some funds missing from some of the different options, but all of them will have the majority of funds you're likely to want to invest in!

Aegis

Jennifer_Jane wrote: »

Hi there, can't actually answer your question, but just to let you know that if you buy a Legal and General ISA online via Quidco, there is cashback of £110, which is a pretty hot risk-free return:

http://www.quidco.com/legal-general-isas/

Regards
Jen
x

In the first year you could lose out on more money than that by going with a tied product rather than a fund supermarket. Anyone looking to invest should decide on the funds/other products they want to go for first before looking around for cashback offers.

Jennifer_Jane

Aegis wrote: »

In the first year you could lose out on more money than that by going with a tied product rather than a fund supermarket. Anyone looking to invest should decide on the funds/other products they want to go for first before looking around for cashback offers.

Correct - and to prove your point, the ISA I went in to crashed down 29% recently (20% on £500 was the breakeven, and is now back up 10 percentage points). Nevertheless, there are a number of less risky funds that could have been chosen, it's just that I have an appetite for risk, and can ride out the bad times. Also, no specific time limit for keeping in the ISA, so if I'd got out before this current debacle, I would have been fine. Any stocks and shares ISA would be recommended for 5 years or so anyway, wouldn't it? At least when I was practising (not in UK) it would have been my advice.

Of course your help to the OP is correct, but if you could go into something a bit less risky than the one I was in (UK Growth) then I still think this is a good deal.

Jen
x

Aegis

Jennifer_Jane wrote: »

Correct - and to prove your point, the ISA I went in to crashed down 29% recently (20% on £500 was the breakeven, and is now back up 10 percentage points). Nevertheless, there are a number of less risky funds that could have been chosen, it's just that I have an appetite for risk, and can ride out the bad times. Also, no specific time limit for keeping in the ISA, so if I'd got out before this current debacle, I would have been fine. Any stocks and shares ISA would be recommended for 5 years or so anyway, wouldn't it? At least when I was practising (not in UK) it would have been my advice.

Oh, I fully agree with this. My point was that forcing yourself to only use L&G products could "lose" you more than the cashback amount in the first year just because many of their products are inferior to the market leaders. Most of their funds tend to fall into the lower second quartile of relative performances over the last 5 years, or at least that's what some very basic initial research seemed to indicate.

On £4000 all you need is a difference of 2.75% overall performance to beat the cashback offer, including all charges and AMC figures (which I don't know for the L&G ISA and their funds).

Of course your help to the OP is correct, but if you could go into something a bit less risky than the one I was in (UK Growth) then I still think this is a good deal.

Jen
x

As you can probably tell from my comments above, I don't agree that it's a great deal. If you pick one of the best funds for your sector from the performance in the past and the experience/added value of the management team, you should be able to effectively beat the cashback offer by the end of your first year with the ISA.

The only real advantage to the cashback offer is that if someone decided that they wanted a L&G ISA anyway, they'd be able to maximise their returns. However, I don't feel that £110 is worth severely limiting your fund selection for, nor is it worth paying the initial fees of 3% that they levy on most of their managed funds.

On the other hand, if you weren't planning on using your ISA next tax year, it might be worth setting it up through quidco and putting £50 per month into one of their low-charge funds until the cashback clears.

Handsome_Homer

hello. thank you for your help.
aegis: my impression was similar to yours; chartwell has lower annual charges, higher initial charges than HL. that's one of the reasons i was looking for direction. HL comes up recommended more regularly, but my understand is that it's the ANNUAL charges that make a difference to the amount of the fund over the long term. i even read that, once annual charges are taken out, most of your gains are slashed.
ideas?
oh and totally agree about choosing funds - musn't let the discount tail wag the investment fund dog....