First foray into s&s

Wentthedaywell? · 31 January 2015 at 1:50PM

I've never had any stocks & shares before - I've not had large amounts of spare cash so savings were put in cash ISAs.

However, now my mortgage is paid and I'll be due a pension/AVC lump sums in a few years of up to £80,000. I need to look at other places for my money, starting of with a S&S ISA.

I was thinking of £10-15,000 in a L&G FTSE all share tracker, through HL to put my toe in the water.

I am reading up on the subject, but finding it heavy going to be honest. So excuse this daft question

to all you people who know so much, but what is the advantage of doing it through H&L, rather than directly through L&G? Is it to keep all investments in one place, should I invest in anything else?

And what are your opinions on an all share tracker as a first investment?

enthusiasticsaver · 31 January 2015 at 8:33PM

I do not claim to be an expert as new to stocks and shares investing myself. One advantage I would guess by using a platform such as HL is that you can invest in more than one fund through an ISA. If you invest in the fund directly through L and G I am not sure if you can invest through a NISA but even if you could you would not then be able to change funds if you ever wanted to without having to transfer. However I would check on HL's fees and charges as I believe they are one of the most expensive platforms for small portfolios.

Whether or not your investment of £10k- £15k into the L and G tracker is sensible depends on what your goals are, is this all of your savings for now until you get your lump sum and what risk are you happy with? Will you be investing for the long term?

Personally 100% equities is a bit too risky for me and my husband and I are in our mid fifties, so presumably roughly the same age as you as we are 4 years off retirement and we went for the Vanguard LS 60 fund.

dunstonh · 31 January 2015 at 9:05PM

I was thinking of £10-15,000 in a L&G FTSE all share tracker, through HL to put my toe in the water.

That is a big jump up the risk scale for a new investor with no experience. 100% equity into single sector would be risk 10 on a 1-10 scale of conventional investing.

but what is the advantage of doing it through H&L, rather than directly through L&G?

None. L&G is cheaper. You only use a platform if you want to hold multiple investments from different fund houses or cant buy the asset directly.

Averaged · 1 February 2015 at 9:25AM

If you're particularly interested in L&G, i'm currently researching their multi-index funds - these span a range of investments (equities, bonds, and property) at various risk levels, and are designed to be a major (or only) component of a portfolio - i.e. similar to the Vanguard LifeStrategy range. This would be a significantly lower-risk option than a single FTSE all-share tracker, although I would imagine the L&G FTSE all-share tracker would be a component of the multi-index fund.

I've found this useful as an overview: http://www.landginvestments.com/_resources/pdfs/Multi-Index-Adviser-Guide-Nov14.pdf

Not a recommendation of course, and even if it was you should ignore me and do your own research

masonic · 1 February 2015 at 9:28AM

I don't understand why, with £10-15k to invest, you want to do so into a single UK fund. Seems like a more diverse fund like Vanguard Lifestrategy or L&G Multi-Index would be worth considering.

edinburgher · 1 February 2015 at 10:07AM

Questions for the OP:

Have you calculated what you will need in retirement and checked to see whether or not you are on track to receive it? This will have an impact on what level of payments you will need to make/the risk you need to take on etc.
Do you have defined benefit pensions coming? (i.e. final salary etc.) If so, you may well have a decent pension 'floor' and may be able to stand a little more risk. That said, dunstonh already hit the nail on the head - your proposed fund would be risky and overly concentrated on one market.

An article on the Monevator blog introducing the idea of an income floor.

Wentthedaywell? · 1 February 2015 at 10:38AM

Thank you everybody, I very much appreciate your comments and can see now that 100% equities isn't a great idea.

Enthusiastic - I do have about £60k in cash (ISAs mostly) and another £70k due when i retire in 3-4 years, plus saving £1k a month till then. I need to find a home for it as ISA rates are so poor and I've got too much for high paying current accounts. I think our situations are similar - at least our ages are. May I ask why you decided on Vanguard please?

Edinburgher - I've an index lined final salary pension which should give me about the lifestyle I've got now, but without the ability to save much except for the house/car maintenance, a modest break etc. I'll also get the state pension 4-6 years after retirement. Thanks for the very useful blog link, which I shall keep. I think my "floor" is solid.

I'm not looking to making loads, but want to keep my savings well ahead of inflation as this will be my pot for big capital purchases for the rest of my life (I'm not concerned about leaving an inheritance to anyone and my house is mortgage-free).

So, if I look for something like the Vanguard or the L&G should I have it in a ISA wrapper? If so, how would people suggest I do this - direct from the companies themselves or through a supermarket?

Thanks again everybody, any more comments gratefully taken on board!

edinburgher · 1 February 2015 at 10:39AM

So, if I look for something like the Vanguard or the L&G should I have it in a ISA wrapper? If so, how would people suggest I do this - direct from the companies themselves or through a supermarket?

For the sake of simplicity and common sense, I see no reason not to use an ISA.

I'd purchase from whoever works out cheapest overall, there is no point in letting more people dip their hands into your pot than is required.

Wentthedaywell? · 1 February 2015 at 10:50AM

I'm sorry if I'm asking really daft questions - still trying to get my head around this. If I buy, say a L&G or Vanguard product through e.g. HL, am I paying two lots of fees, or have HL negotiated a cheaper fee from L&G?

Is it only worth using someone like HL if I were going to be doing a lot of share dealing, moving money around etc? If I am going to leave my money in one product, maybe drip feeding or adding lump sums, should I just go direct to the providing company?

Totton · 1 February 2015 at 11:03AM

Hi,
HL are not the cheapest but charges are reasonable at the lower level of investments. The benefit of using any platform is one of being able to switch holdings easily and hold investments from more than one company in a single place.

I use HL myself due to their excellent customer service and website but that's not to say others don't also do well in that area.

If you go the direct route then potentially you are saving the platform fee but just check that your chosen provider is not stiffing you with the old 5% initial fee that funds can charge and which is more often only applied when buying direct. If the 5% charge is applied then the platform route is cheaper.

Wentthedaywell? · 1 February 2015 at 11:08AM

Thanks Totton. I suppose as I get a bit more canny I might want to switch funds etc.

Are the fees they quote inclusive of the provider fee? So one can compare directly between providers and platforms?

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