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  • FIRST POST
    • MissG80
    • By MissG80 11th Feb 18, 1:44 AM
    • 30Posts
    • 5Thanks
    MissG80
    s&s isa newbie
    • #1
    • 11th Feb 18, 1:44 AM
    s&s isa newbie 11th Feb 18 at 1:44 AM
    Some obvious questions coming up...


    I just opened up a LISA with AJBell. I'm 37 and figured best get my skates on if I want another one next year too. I only put the 25 minimum in it as a placeholder for now.


    I am a tad confused and should wait to read all the documentation, but basically if I buy 25 of passive funds, does that count as a holding? It says it's a 25 fee to transfer out each holding (cash transfer is free). I don't know why I would want to transfer (LISA to LISA?) - is that likely? I can switch between funds within AJBell right? e.g cautious to adventurous, without charge?


    My plan was to pay in 150 p/m - I've maxed out my work pension up to its 6% matched contribution - and 150 is what I've got left after maxing out putting money into a 5% regular savings account. What's the best thing to do? Do I buy 150 of passive funds a month? Or put in a lump annual sum of around 1,800?


    Yours, confused!
    Last edited by MissG80; 11-02-2018 at 1:47 AM.
Page 1
    • MissG80
    • By MissG80 11th Feb 18, 1:50 AM
    • 30 Posts
    • 5 Thanks
    MissG80
    • #2
    • 11th Feb 18, 1:50 AM
    • #2
    • 11th Feb 18, 1:50 AM
    I think I may have answered my own question on their website, it looks like I can put more money into the same fund, doh!
    • Alexland
    • By Alexland 11th Feb 18, 7:07 AM
    • 2,571 Posts
    • 1,953 Thanks
    Alexland
    • #3
    • 11th Feb 18, 7:07 AM
    • #3
    • 11th Feb 18, 7:07 AM
    Welcome to the world of investing - we are currently running a 10% off previous stock market prices promotion!

    Yes owning units in a fund count as holdings.

    The transfer out charge would only apply if you wanted to leave AJ Bell and move holdings to another platform such as the Hargreaves Lansdown LISA if the same funds are available on the new platform.

    HL are a good LISA provider who don't charge for fund trades but have a higher ongoing platform charge of 0.45% and better suited to regular investments. To help offset the higher platform fee they get discounts on some fund OCFs.

    AJ Bell are also a good LISA provider with a lower platform charge of 0.25% but best suited to lump sum investments as they charge 1.50 per fund trade (buy or sell). Although the are no charges if buying their own funds for a limited time until Jan 19.

    However their own funds have higher ongoing fees than similar low cost mixed asset funds available on the same platform. For example the AJ Bell Balanced fund has an OCF of 0.50% compared to the HSBC Global Strategy Balanced fund at 0.19%.

    Remember the LISA bonuses will probably be added as cash so you have to invest those too.

    For example if you invested 150 per month once the offer has ended that would be 1.50 in trade cost (1%) plus the later 37.50 bonus would incur a further 1.50 trade cost (4%). Some planning is required to avoid paying 24x 1.50 trade fees per year. Eg grouping up a previous bonus and current month contributions into one trade.

    So for the remainder of this year it probably makes sense to stick with the AJ Bell funds as the higher OCF is less than you would spend in 1.50 fees. At a total of 0.75% it is still a bit more than the HL total charge to own HSBC Balanced (0.64%) or an adventurous discounted Blackrock Consensus 85 (0.54%) or 100 (0.55%) fund.

    Then reassess your options in December when you have had time to form your own thoughts.

    Ps I believe AJ Bell would still charge 1.50 to sell their own funds during the promotion period so you don't want to be switching frequently. After the promotion has finished the switch cost would be 2x 1.50 to sell and buy.

    Alex
    Last edited by Alexland; 11-02-2018 at 9:30 AM.
    • badger09
    • By badger09 11th Feb 18, 11:25 AM
    • 6,002 Posts
    • 5,355 Thanks
    badger09
    • #4
    • 11th Feb 18, 11:25 AM
    • #4
    • 11th Feb 18, 11:25 AM
    Welcome to the world of investing - we are currently running a 10% off previous stock market prices promotion!

    ..........

    Alex
    Originally posted by Alexland
    But I'm unable to tell you whether next week we'll be having our BlueX 25% off sale, or whether we'll put our prices back up to their pre promotion level

    Not that that matters
    • ValiantSon
    • By ValiantSon 11th Feb 18, 11:29 AM
    • 2,013 Posts
    • 1,863 Thanks
    ValiantSon
    • #5
    • 11th Feb 18, 11:29 AM
    • #5
    • 11th Feb 18, 11:29 AM
    But I'm unable to tell you whether next week we'll be having our BlueX 25% off sale, or whether we'll put our prices back up to their pre promotion level

    Not that that matters
    Originally posted by badger09
    We are all hoping, however, that the Closing Down Sale won't be coming.
    • MissG80
    • By MissG80 11th Feb 18, 11:32 AM
    • 30 Posts
    • 5 Thanks
    MissG80
    • #6
    • 11th Feb 18, 11:32 AM
    • #6
    • 11th Feb 18, 11:32 AM
    Hi Alexland thanks for your reply, very helpful. I had read a few of your posts and glad you commented as you clearly know a lot!
    • Alexland
    • By Alexland 11th Feb 18, 12:50 PM
    • 2,571 Posts
    • 1,953 Thanks
    Alexland
    • #7
    • 11th Feb 18, 12:50 PM
    • #7
    • 11th Feb 18, 12:50 PM
    Hi Alexland thanks for your reply, very helpful. I had read a few of your posts and glad you commented as you clearly know a lot!
    Originally posted by MissG80
    Thanks but probably not as much as some others who lurk around here.

    Oh and don't forget to leave some cash in your AJ Bell LISA to pay platform fees as contributions are limited and it would be a shame to have to incur a 1.50 cost to sell some units to pay the fees.
    Last edited by Alexland; 11-02-2018 at 12:58 PM.
    • Alexland
    • By Alexland 11th Feb 18, 12:53 PM
    • 2,571 Posts
    • 1,953 Thanks
    Alexland
    • #8
    • 11th Feb 18, 12:53 PM
    • #8
    • 11th Feb 18, 12:53 PM
    We are all hoping, however, that the Closing Down Sale won't be coming.
    Originally posted by ValiantSon
    All stocks must go....

    It's when they start including share certificates alongside the toys in Happy Meals that I will start worrying.
    Last edited by Alexland; 11-02-2018 at 1:05 PM.
    • TheShape
    • By TheShape 11th Feb 18, 1:16 PM
    • 1,293 Posts
    • 1,103 Thanks
    TheShape
    • #9
    • 11th Feb 18, 1:16 PM
    • #9
    • 11th Feb 18, 1:16 PM
    Oh and don't forget to leave some cash in your AJ Bell LISA to pay platform fees as contributions are limited and it would be a shame to have to incur a 1.50 cost to sell some units to pay the fees.
    Originally posted by Alexland
    A 1.50 charge would be a shame. Unfortunately the disinvestment charge to pay fees appears to be 29.95.

    https://www.youinvest.co.uk/lifetime-isa/charges-and-rates

    AJ Bell's fees and fee payment options put me off their LISA. I went with HL as I preferred their fee structure and fee payment options.
    • Alexland
    • By Alexland 11th Feb 18, 1:40 PM
    • 2,571 Posts
    • 1,953 Thanks
    Alexland
    Yes sorry should have mentioned that too. It's only 1.50 if you sell units to pay fees before they do it for you at a punative cost. I generally assume people are in control of their money, not always true.

    I generally like AJ Bell as a quirky Manchester version of HL and use their Quickranker tools several times a day but it was cheaper for them to administer my Halifax SD SIPP at a fixed cost than continue with my old YouInvest SIPP at a percentage cost. So I am still kinda with them.

    I don't like too much money in one place so that rules out AJ Bell for our LISAs which we will move from Nutmeg to HL eventually for the marginally lower cost.

    I just struggle to motivate myself to move small accounts to save a tiny decimal place in fees. Especially when you can lose years worth of savings being out the market due to volatility during transfer. I guess the risk is less when the valuation is lower.

    Still need to do it before Nutmeg run out of cash. Unless HL buy the customer base which might save some paperwork. The sharks must be smelling blood. I bet they would love to put former Nutmeg customers into their expensive portfolio funds....

    Alex
    Last edited by Alexland; 11-02-2018 at 1:59 PM. Reason: More detail
    • lolamancity
    • By lolamancity 11th Feb 18, 3:21 PM
    • 179 Posts
    • 99 Thanks
    lolamancity

    Still need to do it before Nutmeg run out of cash. Unless HL buy the customer base which might save some paperwork. The sharks must be smelling blood. I bet they would love to put former Nutmeg customers into their expensive portfolio funds....

    Alex
    Originally posted by Alexland
    Alex- what do you meeeeean!? i've just opened my LISA with Nutmeg and stuck 200 in it for starters, for the long run!
    • Alexland
    • By Alexland 11th Feb 18, 4:05 PM
    • 2,571 Posts
    • 1,953 Thanks
    Alexland
    Well according to their Companies House submissions Nutmeg are an unprofitable company reliant on their backers for regular capital injections to fund their operations. There is a question on if they will be able to grow sufficient assets under management to cover their run costs.

    A downturn in the stock market won't help them as inexperienced investors might crystallise losses by withdrawing and new investors might find it less attractive.

    Don't worry I am sure your money is perfectly safe in their hands as they should be keeping it separate to their business accounts. Even if they are not then you are covered up to 50k by FSCS. Also I rate Shaun Port's selection of fixed allocation ETFs.

    If I was very worried I would bother doing the HL transfer paperwork a bit quicker. I am sure the Nutmeg customer base would be attractive to another market participant if they hit serious trouble.

    Alex
    Last edited by Alexland; 11-02-2018 at 4:14 PM.
    • lolamancity
    • By lolamancity 11th Feb 18, 6:53 PM
    • 179 Posts
    • 99 Thanks
    lolamancity
    Eeeek i hope you're right, if it were just a S&S ISA i wouldn't be alarmed, but a lifetime ISA on their product with the highest risk level makes me a bit more nervous!
    • Eco Miser
    • By Eco Miser 11th Feb 18, 7:15 PM
    • 3,444 Posts
    • 3,234 Thanks
    Eco Miser
    Eeeek i hope you're right, if it were just a S&S ISA i wouldn't be alarmed, but a lifetime ISA on their product with the highest risk level makes me a bit more nervous!
    Originally posted by lolamancity
    What difference does lifetime rather than S&S make? If they do close down your ISA, whether L or S&S, will be transferred to another provider and carry on.
    Their highest risk level product? Unless they are investing some of it in themselves, their own financial health should have no bearing on the performance of their product.
    Eco Miser
    Saving money for well over half a century
    • Alexland
    • By Alexland 11th Feb 18, 8:10 PM
    • 2,571 Posts
    • 1,953 Thanks
    Alexland
    The investment risk level is about the ETF mix of stocks and bonds not about the stability of Nutmeg as a provider.
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