Sense check please! (ISA platform)
Snakey
Posts: 1,174 Forumite
Hi All
When I opened my S&S ISA a couple of years ago (transferring in a Cash ISA and adding a lump sum for the current year) I invested it all in VLS. The cheapest platform was Halifax because of the flat rate annual fee and because the buy/sell fee was more or less irrelevant with just one purchase per year.
In the next tax year I found an IFA, which meant selling the VLS and buying ten different holdings. I set this up as a regular investment to see if I could pay just £2 per purchase, and it seemed to work just fine even though in the end there were only two "regular investments" (in consecutive months - one was the sale proceeds and the other the new year's subscription) after which I went in and selected the option to postpone further monthly investments.
This year I need to think about rebalancing, which although I haven't checked yet I expect I can achieve by changing the percentages of the purchases to be made using my current year subscription so that the overall fund percentages are there or thereabouts. I doubt any of them have gained or lost such massive amounts that this wouldn't be possible.
So fingers crossed I won't need to sell anything. But I will be buying around ten holdings.
I'm thinking I'll set it up to suck in the full 20k subscription from my bank account at the start of next month (by which time I should have the available money) and then tweak and reactivate the 'regular' subscription to those ten holdings to be made a few days later - on the assumption that this will be twenty quid for ten purchases - and then go in and disable it again.
Does anybody happen to have done this, and can confirm to me that this will qualify as a 'regular' purchase even though it's clearly only a one-off in reality?
I'm naturally lazy, plus currently between passports so KYC could be a potential problem. But if anybody knows that the above does not work, please tell me!
If I have to pay the full whack for each of the ten transactions I might be better off on another platform.
p.s. Halfway through that my keyboard magically changed to US format - hence no pound signs. Only when I go in to try to change it it tells me it's already set up as UK. Weird! But just a touch off-topic.
When I opened my S&S ISA a couple of years ago (transferring in a Cash ISA and adding a lump sum for the current year) I invested it all in VLS. The cheapest platform was Halifax because of the flat rate annual fee and because the buy/sell fee was more or less irrelevant with just one purchase per year.
In the next tax year I found an IFA, which meant selling the VLS and buying ten different holdings. I set this up as a regular investment to see if I could pay just £2 per purchase, and it seemed to work just fine even though in the end there were only two "regular investments" (in consecutive months - one was the sale proceeds and the other the new year's subscription) after which I went in and selected the option to postpone further monthly investments.
This year I need to think about rebalancing, which although I haven't checked yet I expect I can achieve by changing the percentages of the purchases to be made using my current year subscription so that the overall fund percentages are there or thereabouts. I doubt any of them have gained or lost such massive amounts that this wouldn't be possible.
So fingers crossed I won't need to sell anything. But I will be buying around ten holdings.
I'm thinking I'll set it up to suck in the full 20k subscription from my bank account at the start of next month (by which time I should have the available money) and then tweak and reactivate the 'regular' subscription to those ten holdings to be made a few days later - on the assumption that this will be twenty quid for ten purchases - and then go in and disable it again.
Does anybody happen to have done this, and can confirm to me that this will qualify as a 'regular' purchase even though it's clearly only a one-off in reality?
I'm naturally lazy, plus currently between passports so KYC could be a potential problem. But if anybody knows that the above does not work, please tell me!
If I have to pay the full whack for each of the ten transactions I might be better off on another platform.p.s. Halfway through that my keyboard magically changed to US format - hence no pound signs. Only when I go in to try to change it it tells me it's already set up as UK. Weird! But just a touch off-topic.
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Comments
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I don't understand how finding an IFA has caused your DIY investments to now span across 10 funds. If you are naturally lazy is there any particular compelling reason a single fund solution would not meet your requirements?
As your analysis shows you are at risk of damaging return by incuring trading fees. Is it really worth it?
Alex0 -
[FONT=Verdana, sans-serif]Select 'regular investment' 'Amend' then use the 'How often do you wish to invest?' and select 'Once Only' from the drop down menu.[/FONT]
[FONT=Verdana, sans-serif]Then add you 10 investments.[/FONT]0 -
In the next tax year I found an IFA, which meant selling the VLS and buying ten different holdings.
10 sounds in the expectated ballpark as there are around 10 main sectors. So, a fund covering each sector is the common model when using single sector funds instead of a multi-asset fund.I'm naturally lazy, plus currently between passports so KYC could be a potential problem.
If you are not employing an IFA and you are a "lazy" investor then you really ought to stick to multi-asset funds rather than have a model portfolio of single sector funds.
model portfolios need work. They need rebalancing and periodically you need to replace the odd fund as the economic cycle changes or other reasons.
Using a platform with transaction fees on a model portfolio can be more expensive than one without transaction fees.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Hi all - thanks for your replies!
I knocked my IFA fees down to 0.35% a couple of months ago, which has meant a reduction in service around the edges e.g. for the ISA they will tell me when their recommendations change but I'll have to do the changing myself. At this pot size, absent a disaster I wouldn't be rebalancing more than once a year anyway so I thought that's fine as I can do it when I pay in every April. So it's not that much effort per year - it's just that that effort falls due all in one go, so right now when it's looming it feels like a drag.
It sounds, then, as if I can put the £20k of new money in at a cost of just £20 (plus the annual £12.50 flat fee for having the thing)? In that case I reckon I can swallow the eighteen quid difference for the sake of a) not having to open a new platform and shift the existing funds across and b) feeling important because I've got a professionally-built portfolio and not just VLS like the plebs.
ps - because I know you all really care! - my keyboard sorted itself out when I rebooted. Phew.0 -
So you sell an all-in-one tracker with 20 funds which automatically rebalances and replace it with 10 funds and decide to pay an IFA additional fees for a limited service and now you need to rebalance the funds but you are a bit lazy...am I missing something here??In the next tax year I found an IFA, which meant selling the VLS and buying ten different holdings0 -
Nope, you've just about nailed it except that my question wasn't about rebalancing. Having to calculate this year's investment percentages in a way that will have the effect of rebalancing the overall holding will take all of half an hour once I get around to doing it.
I was asking whether anybody knew if it was possible to treat a one-off set of purchases as "regular" investments for the purpose of getting the cheaper per-trade rate. Looks like the answer is "yes", so that's good.
The laziness was about not wanting the faff of moving to a different platform if there was only a few quid difference in it. People draw their lines in different places when it comes to time vs money - for me it wouldn't be worth it to save 10 x £2 (per year) but it might have been for 10 x £12.50.0 -
I cannot believe anyone would sell VLS (whatever the %ge model) to then pay an IFA to invest in 10 separate funds!Hi All
When I opened my S&S ISA a couple of years ago (transferring in a Cash ISA and adding a lump sum for the current year) I invested it all in VLS. The cheapest platform was Halifax because of the flat rate annual fee and because the buy/sell fee was more or less irrelevant with just one purchase per year.
In the next tax year I found an IFA, which meant selling the VLS and buying ten different holdings. I set this up as a regular investment to see if I could pay just £2 per purchase, and it seemed to work just fine even though in the end there were only two "regular investments" (in consecutive months - one was the sale proceeds and the other the new year's subscription) after which I went in and selected the option to postpone further monthly investments.
This year I need to think about rebalancing, which although I haven't checked yet I expect I can achieve by changing the percentages of the purchases to be made using my current year subscription so that the overall fund percentages are there or thereabouts. I doubt any of them have gained or lost such massive amounts that this wouldn't be possible.
So fingers crossed I won't need to sell anything. But I will be buying around ten holdings.
I'm thinking I'll set it up to suck in the full 20k subscription from my bank account at the start of next month (by which time I should have the available money) and then tweak and reactivate the 'regular' subscription to those ten holdings to be made a few days later - on the assumption that this will be twenty quid for ten purchases - and then go in and disable it again.
Does anybody happen to have done this, and can confirm to me that this will qualify as a 'regular' purchase even though it's clearly only a one-off in reality?
I'm naturally lazy, plus currently between passports so KYC could be a potential problem. But if anybody knows that the above does not work, please tell me! If I have to pay the full whack for each of the ten transactions I might be better off on another platform.
Not only will the IFA charge a percentage there are ten trades to cover as well - madness!
Rebalancing by just buying across a mix of 10 funds would be the way to go, why sell and incur fees when you don't need to, and this is trivial to work out using spreadsheet - takes about 5 minutes. Then just execute it yourself, but, surely this is what your IFA should be doing.
My tip is to ditch the IFA, sell all your funds, and then but VLS80/60/40 ACC fund, pick the %ge you feel comfortable with and then buy more with this years £20k - it really is that simple
Good luck0 -
Thanks again, appreciate the time people are taking!
The VLS was sold a year or so ago. I am rebalancing by buying using this year's money rather than selling existing funds, sorry if that wasn't clear.
In your view then, is the VLS well-balanced across assets and sectors and markets and what-have-you such that - subject to picking the correct risk profile for the individual investor - it's suitable for everybody no matter what? So there would be no reason for anybody to ever buy anything else?
Due to a long and involved story the IFA isn't actually charging me a fee for the ISA recommendations, which is partly why I'm managing it myself. I suppose I could sack him altogether and stick the whole of my pension in VLS too...0 -
Did the IFA tell you what was so special about this model portfolio that would cause it to be more appropriate for your situation or perform better than a single fund of funds?
I wonder if some IFAs create complexity in order to make their clients feel they have received some valuable advice and to then hopefully give themselves something to manage on behalf of the client.
Alex0
This discussion has been closed.
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