Novice investment fund

13

Comments

  • tony863
    tony863 Posts: 380 Forumite
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    Alexland wrote: »
    In your situation where you might want access to a proportion of the money before 60 then I would stick that money in an ISA and the rest (up to £4k per tax year) in a LISA.

    Would you go Nutmeg or VLS?
  • Alexland
    Alexland Posts: 9,653 Forumite
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    Its really your decision.
  • tony863
    tony863 Posts: 380 Forumite
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    Alexland wrote: »
    Its really your decision.

    I wasn't going to hold it against you in 22 years time if one made more money than the other :) I was simply asking your personal opinion because you know much more about the subject than I do.
  • Alexland
    Alexland Posts: 9,653 Forumite
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    Ok personally I do use Vanguard for the ISA and Nutmeg for the LISA.

    However when our LISAs grow above £10k next tax year (2x£4ks and 2x£2k bonuses) then I will give serious consideration to moving them to AJ Bell who will be cheaper on larger balances and then using an HSBC or L&G multi asset fund as I already have too much VLS exposure across my ISA and SIPP.
  • tony863
    tony863 Posts: 380 Forumite
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    Thanks Alex. Out of everyone, you've been through most helpful and I'm genuinely grateful for your advice.
  • tony863
    tony863 Posts: 380 Forumite
    First Post First Anniversary Combo Breaker
    Right, I've set up two accounts. One is with HL where I've deposited £2k and set up a DD for £100pm. The other is with Nutmeg under the same circumstances.

    Re HL - I think it's just holding it in a LISA at the moment. I think I need to call them tomorrow to get them to put it into the VLS60.

    Re Nutmeg - I deposited the £2k but I can't workout how to set up the DD! I also picked the fully managed account....but have no idea if that's the right choice over the other option. I know it costs more but can I have a little reassurance that people on here would make the same choice?

    Any other advice would be great
  • TheShape
    TheShape Posts: 1,778 Forumite
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    Check how you're going to pay charges for the LISA with HL. If they have to sell investments to pay the charges, they will charge £1.50 to do so. You can setup a fund&share account to hold cash to pay charges.
  • tony863
    tony863 Posts: 380 Forumite
    First Post First Anniversary Combo Breaker
    TheShape wrote: »
    Check how you're going to pay charges for the LISA with HL. If they have to sell investments to pay the charges, they will charge £1.50 to do so. You can setup a fund&share account to hold cash to pay charges.

    Thanks for bringing this to my attention. I've just been on the phone to HL and they were just going to let the charges accumulate over time and then bill me when they reached approx £50. I've now opened a fund&share account where I've deposited £30. I've also had to instruct them to set up an instruction to recover any fees from that account in the future as long as there is money in there.

    It's all a really steep learning curve tbh. I actually opened the two LISA's that I mentioned in my above post, only to find out that the law only permits 1 LISA per person! I've subsequently had to close my LISA with Nutmeg and open another S&S ISA in which they will transfer my original £2k. I've also diverted the £100pm into the same pot and Nutmeg will do the rest.

    I've opted for the managed account at 0.75 fee.... not sure if this is right so I'd appreciate any advice.

    With regards HL - I deposited the £2k but didn't know that it was just sat in a pot doing nothing. I then had to call them and ask them to invest in the VLS60. I also had to set up an instruction for them to invest the £100pm straight into the VLS60 as oppose to just leaving it in the pot.


    Does all of this sound right? I'm quite mindful of my inexperience in this area and want a little reassurance that I'm doing ok so far.

    One final question - Does the Nutmeg S&S ISA idea sound ok? I ask because I was originally opting for the LISA and I wonder whether people regard it as being a good option?

    As always, any extra advice is most welcome.

    Thanks in advance

    Tony
  • Alexland
    Alexland Posts: 9,653 Forumite
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    edited 14 October 2017 at 7:39AM
    Hi Tony,

    In none of the previous posts did you suggest you were going to open 2x LISAs or go with HL - what happened?

    The cheapest way to hold a low value VLS60 would have been with Vanguard in an ISA wrapper. Vanguard charge a 0.15% platform fee versus HL at 0.45%. The VLS fund cost would have been an extra 0.22% with either. In addition with Vanguard you could have been completely invested as they are happy to deduct fees from the units without needing a cash balance.

    With the LISA the platform fee for HL and Nutmeg Fixed Allocation would be the same at 0.45% but buying VLS would but 0.22% fund fee versus 0.17% for Nutmeg fund fees. Nutmeg would have been 0.05% cheaper and not required you to worry about a cash balance.

    Finally Nutmeg fully managed is more expensive at 0.75% platform plus 0.19% fund fees. They have not released any data to show a performance benefit of the active management. I am in the Fixed Allocation and it is performing well. It's fairly easy to switch over online.

    Alex.
  • tony863
    tony863 Posts: 380 Forumite
    First Post First Anniversary Combo Breaker
    Hi Alex,

    I've obviously misinterpreted the information....I'm sorry about that. I thought I had no choice but to invest in a VLS60 is HL. I also thought the everything was centred around LISAs and not standard ISAs.

    Irrespective of the confusion, I'd like to rectify the situation asap. I will contact HL and see if I can cancel the investment without penalty. I'll also cancel the DD and empty the fund and share account. Once I've done that I'll start over again.

    With regards Nutmeg, I don't have anything committed to them in terms of which fund or product I'm involved in. I deposited £2k which is under the banner of an ISA pot. I also set up another DD but again, I can amend if needed.

    I'm really keen to take the advice that you've provided but I just need to clarify in simple terms (for me more than you) what that means.

    I'd appreciate it if you could link me directly to the product if that's possible?

    I'm grateful as always

    Tony
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