Discount Brokers Q&A

Blah99

From that article:

plus websites like ADVFN and iii.co.uk have large forums discussing shares and funds.

Don't listen to a single word anyone says on the ADVFN or iii bulletin boards. They're full of trolls, idiots and fakers - people claiming to have caught the top and bottom of a peak and made £10billion in 37 seconds. If you're inexperienced in investing it will be almost impossible for you to sort the genuinely smart posters from the blithering idiots, so don't even try!

orcadian

My daughter's Child Trust Fund has been in Selftrade which was fee-free. From 1 July they are charging £40.25 annually in advance. Seems like a rip-off to me. Due to my concerns about today's stock market her CTF is directly invested in a 5-year government gilt, plus Kent Reliance building society permanent interest bearing shares (PIB). Hargreaves Lansdown is not an option as they charge a 1% annual portolio fee if you don't invest in commission-charging unit trusts. (You don't see this fee if you have UTs but you still pay it, it's deducted annually as a hidden commission from the capital sum invested - check out the Total Expense Ratio (TER). I managed her CTF entirely myself online to save charges. Percentage fees add up over the years and eat up your investment (20 years > 20%). I'm not sure what options are left.

dunstonh

Seems like a rip-off to me.

Actually, it seems like common sense. They would have seen their income drop significantly but are still required to provide services that they did not previously charge for. So, charging people may lose them some business (most of which will be unprofitable) but the rest will bring them an income.

Reaper

cornerstone13 wrote: »

I don't think there is a direct correlation between the value of the fund and the price of a unit, is there ? In other words, if the value of the fund has dropped 50% in a year, would that mean that the price of a unit today would be 50% lower than a year ago.

There is a direct correlation. If the unit price halves overnight the fund will have lost half its value. However Accumulation funds reinvest their dividends which slightly boosts the unit price.

Is there a website which shows unit prices historically - most of them seem to only show the fund performance.

It's the same thing as the graph will be the unit price over time. I use Google Finance which has an option to show unit price figure instead of a graph if you want, though it has many gaps in its coverage of the market. If your fund is listed then I'd start there.
eg Fidelity Asian Values

elizabeth19_2

I want to invest £50 a month in an emerging markets investment trust. Firstly i want to know is this a cost effective thing to do and if it is how do I go about it. I have opened an on-line share dealing account.

Thanks

Rollinghome

elizabeth19 wrote: »

I want to invest £50 a month in an emerging markets investment trust. Firstly i want to know is this a cost effective thing to do and if it is how do I go about it. I have opened an on-line share dealing account.

Thanks

Elizabeth, many of the IT companies have savings schemes but not all so would depend on which one you were interested in. Some also have schemes for low cost ad-hoc purchases. If you're using a savings scheme you wouldn't normally need a dealing account with a broker. You should find some details at www.theaic.co.uk. A less volatile/lower risk choice for a first time investment would be one of the big Global Growth ITs.


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orcadian

I just sold my house. I want to invest my cash in an extremely safe investment i.e. short-dated British Government Treasury gilts through a discount broker. But what if the broker went bust? Would I be covered if I had bought £100,000 for only first £50,000 worth gilts? Would it make any difference to how safe my money is if the broker was based in England (e.g. Fastrade) or the Channel Islands (e.g. Fairbairn Focus)?

System

Apologies if this has already been asked.

I currently hold my stocks and shares ISAs through a discount broker (Commshare). The funds are invested through Cofunds.

I was wondering if it is possible to transfer my ISAs to another discount broker (e.g. Hargreaves Lansdown, Best Invest etc...) and if there would normally be any charges involved.

Any help appreciated. Thanks

nealh

I have recently rejigged my portfolio but as a result have a number of queries that I cannot find easy answer to.
1) How can I compare 'platforms' i.e. what you call supermarkets. There seem to be at least 5.
2) How do you raise awareness/ need for TER assessment as a factor in investment management and decision making?
3) You don't seem to mention the FSA move to risk analysis and portfolio allocation. These were drawn to my attention only when I went to FSA's regarding private pension. But it seems to me to have validity for non pension savings too. You can do this yourself. MSE could give general guidance on asset allocation.
4) Investment Trusts. These seem to be worthy of much more coverage on the site. For most people a share plan in an international growth trust or a UK Trust for those needing income seem to be the best long term option.
a great site. Financial Services seems to be one of the last remaining 'closed shops' in the UK (except for lawyers and accountants!)

Linton

nealh wrote: »

I have recently rejigged my portfolio but as a result have a number of queries that I cannot find easy answer to.
1) How can I compare 'platforms' i.e. what you call supermarkets. There seem to be at least 5.
I think you will find the differences fairly marginal. I use Fidelity and am happy with them, other people seem to be happy witheir different choices.

The main things to look at are charges/rebates and number of funds they support.
2) How do you raise awareness/ need for TER assessment as a factor in investment management and decision making?

I assume "raise" means "rate". IMHO TER is a very marginal factor. First thing to choose is sector - that's 90% of the decision. Then you throw out the obviously poor funds and are left with say 5 contenders. My next factor is previous performance - often how badly they did in the bad times rather than how well they did in the good. TER may come in then, but its not really a factor, after all the performance figures already take into account charges. I am perfectly happy to pay unusually high charges if I get an unusually high return.

3) You don't seem to mention the FSA move to risk analysis and portfolio allocation. These were drawn to my attention only when I went to FSA's regarding private pension. But it seems to me to have validity for non pension savings too. You can do this yourself. MSE could give general guidance on asset allocation.

IMHO portfolio allocation is a major factor, I would say THE major factor in chosing funds.

4) Investment Trusts. These seem to be worthy of much more coverage on the site. For most people a share plan in an international growth trust or a UK Trust for those needing income seem to be the best long term option.

ITs can be interesting. The main problem is that there are relatively few of them and it can be difficult finding the one which meets your investing needs. With funds there is a much wider choice and so if you know what you want you can probably find a fund, or mix of funds which does it.

a great site. Financial Services seems to be one of the last remaining 'closed shops' in the UK (except for lawyers and accountants!)

Financial services arent really a closed shop. Anyone with time and the ability to learn can manage almost everything themselves.