Which Broker for buying and holding some Investment trusts?

pafpcg wrote: »

I'll agree the Baillie Gifford plan is good but it's a dying breed. Purely by coincidence I made a posting yesterday on my experience over 25 years with buying direct from IT managers' share plans: https://forums.moneysavingexpert.com/showthread.php?t=5877671

For a really long-term hold, consider certificating the holding. That way you get the dividends on the date of distribution paid direct into the bank account of your choice, you get the annual report and a vote at AGMs, and there'll never be any platform charges. Certificating the holding bought at an execution-only broker usually costs £25/holding (SVS charge only £15); amazingly, Baillie Gifford charge nothing for the trusts they manage (Scottish Mortgage, Monks, Scottish American, ...). To sell, just transfer the certificates back to a broker (at no charge).
But keep the certificates safe!

Interesting. Any disadvantages of investing via an Investment Trust Share Plan compared to with a broker? and what do you mean by certifying the holding? Getting a certificate as proof of holding? What does this function for?

cashbackproblems wrote: »

just a warning about XO, their website and CS is a joke, constantly disabling/locking my account and having to call them, never had this problem with HL/Vanguard etc
and their service is extremely limited e.g. no dividend reinvest, having to each email time for withdrawals etc. Stick to HL

Unless you want a joint account, stick to IWeb!
It's cheaper and offers both automatic dividend reinvestment or distribution. (HL's automatic dividend distribution is in monthly batches.)

darkidoe wrote: »

Any disadvantages of investing via an Investment Trust Share Plan compared to with a broker?

It all depends on the share plan! Some are excellent (eg Baillie Gifford) which offer almost as much as at a execution-only broker and sometimes at a lower cost. But some are more expensive that at a broker and all of them limit dividend reinvestment to the shares within the IT's management group. When purchasing and selling within a share plan, you don't have the same price control you have at a broker where you'll normally to able to specify the precise number of shares or proceeds you wish to buy or sell (and have the option to decline if the price offered doesn't suit). At share plans, typically purchases and sales are aggregated and done at a date and time of the plan's choosing. If, for example, you wished to sell a number of shares held in a share plan and repurchase the same number of shares in an ISA as close to together as possible, this would be impossible at all the share plans I've had dealings with because the timing of share plan transaction is outside your control.

My experience has been that the risk of the IT's management group changing the share-plan's platform provider (and increasing fees) is higher than with investing via a broker.

You can find the details of any share plans for investment trusts at the AIC web-site: www.theaic.co.uk - pick which IT you're thinking of investing in and then look them up (for each IT, look down the page for "Wrapper Schemes"), but not all ITs have a share plan.

darkidoe wrote: »

...and what do you mean by certifying the holding? Getting a certificate as proof of holding? What does this function for?

All ITs are companies which have a register of who owns what number of shares. The register is usually held by a specialised registrar company who maintain the register on behalf of the company. Traditionally, share owners were given a share certificate stating the number of shares owned. To transfer ownership means filling-in a form and sending the form and the certificate back to the registrar (who would then issue a new certificate to the new owner). The company knows who owns its shares by consulting the register so it knows who and where to send any dividends, annual reports and AGM voting packs. This arrangement works well if you're holding your investment in that investmemt trust for twenty years or so.

But with the demand for ever faster transactions, shipping pieces of paper and retyping names & addresses to record transfer of ownship becomes impractical. The execution-only brokers and the share plans will hold your ownership of the shares of the investment trust company in a nominee account at a nominee company (a subsidiary of the broker dedicated to holding of the nominee account). This nominee company will be the legal owner of "your" shares in the investment trust but will mantain a record that you own a slice of their holdings. Transfer of ownership of "your" shares is then a computerised process between the nominee company and the registrar (it should all be done within two working days). So when you buy shares at a broker, the nominee company will update your share holdings on their data-base, but there'll be no physical "thing" such as a certificate to show you own the number of shares in the investment trust company. When dividends are paid, the funds are sent to the broker's bank account and then from the broker's account to your bank account (or reinvested in more shares); typically, there'll be a delay of three working days before you receive the dividend. Similarly, the nominee company hold the voting rights for your shares (some share plans will send AGM notices and ask for your voting wishes).

To certificate your holding of shares held at a broker or share plan, fill-in the appropriate form and pay the fee (usually about £25 per share-holding, Baillie Gifford is free!). The nominee company then sends to the IT's registrar a transfer form to change the ownership of the required number of shares from the nominee's name to yours; the registrar then prints a share certicate with your name and address with the number of shares you own and posts it to you. You then store your certificate in a safe place because if you lose it, getting a replacement will cost money (about £25?).

If you have share certicates you wish to sell, I suggest you use a cheap execution-only broker (JarvisXO, SVS, IWeb, whoever). Send them the share certificate with a CREST transfer form and the broker will send the certificate to the registrar and the share ownership will be transferred to the broker's nominee account. In my experience, brokers will do this for free - they'll make their money from the fee they charge you when you sell.