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  • FIRST POST
    • dqnet
    • By dqnet 2nd Mar 18, 2:40 PM
    • 213Posts
    • 68Thanks
    dqnet
    Platforms vs Platforms
    • #1
    • 2nd Mar 18, 2:40 PM
    Platforms vs Platforms 2nd Mar 18 at 2:40 PM
    I'll be opening my investment platform account in the coming days and was wondering which platform had better customer support and hand holding. I was thinking of going either AJ Bell or HL. I'm not too worried about the platform fees to initially as I'm just starting out and will make the necessary changes later (I understand this may be a costly) but my concern was more about getting the educated help if I need it. I've called both numbers for various fund questions and both have been pretty good but I was wondering if anyone had a specific experience that would steer someone away from either platform. Thanks

    p.s. HL said that in some cases the ongoing fund fee will vary between Platforms. Is this true or are they all the same (providing the platform offers the fund)?
Page 2
    • bowlhead99
    • By bowlhead99 3rd Mar 18, 4:44 PM
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    bowlhead99
    Technically true but if one was new the the investment portal and wanted to experiment with a few hundred pounds with a fund and also test a diversification strategy then they're out of a luck if the minimum is 1000. It's more of an inconvenience rather then a disadvantage of the platform for new investors.
    Originally posted by dqnet
    There are really very few funds with minimum 1k contributions so unlikely to be such a big deal that it makes you want to move to a platform that charges 0.45% a year instead of 0.25%.

    I appreciate that on 4000 the difference is only 8 a year and you can say small numbers are not important. Still, you are considering putting 500 of a small portfolio into one fund. If that 500 delivers an extra 1.5% more per year than the average of your other funds over the long term... that incremental gain is only 7.50 a year on 500. So either small numbers are important to you or they aren't.

    Likely in that example it was not worth using the platform costing 8 extra per year just to experiment with a token 500 in some obscure fund and eke out an extra 7.50 a year in profits. (Am assuming it's an obscure specialist fund as most mainstream ones have sub-1k buy-ins).

    Good luck with it all. AJ Bell are fine, as are HL, though the latter is certainly more expensive as the portfolio gets bigger. As for their relative abilities in terms of 'hand holding' - if you only have a relatively small amount of money (4k) which could be dealt with by a single fund, but you are buying four or more funds in sub-1k quantities, then it could be assumed you are an advanced investor looking to make things more complex than they need to be, as you want to bring your experience to bear. If you have such experience, you don't really need 24-7 phone support and hand holding to press the 'buy' button on a few funds. While if you don't have experience, you don't need more than one fund

    Good luck with whatever you decide.
    • coyrls
    • By coyrls 3rd Mar 18, 5:33 PM
    • 977 Posts
    • 1,036 Thanks
    coyrls
    Technically true but if one was new the the investment portal and wanted to experiment with a few hundred pounds with a fund and also test a diversification strategy then they're out of a luck if the minimum is 1000. It's more of an inconvenience rather then a disadvantage of the platform for new investors.
    Originally posted by dqnet
    I often see this argument that you need to put money into something to "test" it. It makes no sense to me. You can monitor a fund's performance with or without putting money into it and also look at historical performance, regardless of whether you've had money invested in the fund in the past or not.
    • dqnet
    • By dqnet 5th Mar 18, 1:39 PM
    • 213 Posts
    • 68 Thanks
    dqnet
    I think we are all getting a little ahead of ourselves here...
    Completely agree on the cost-saving benefit being more valuable and I know I mentioned that it wasn't important. The real priority was getting good support and I'm glad AJ Bell is good at providing that (everything dealt with on the single call when I called them few times). I was just a little disappointed that HL managed to negotiate such low investment amounts [100 compared to 1000]. I know that only a few funds have this requirement but it was still a shame. It wasn't about testing the fund's performance as all information is available in the KID as you say.

    Anyway, I think AJ Bell might be the way forward as the support issue is resolved and now it's about costing. As an earlier post recommends, I should now start to add individual costs of each fund and see what works out cheaper in the long run.

    Thanks all
    • dqnet
    • By dqnet 5th Mar 18, 1:40 PM
    • 213 Posts
    • 68 Thanks
    dqnet
    Newbie investor here...

    Why would OP be better off with 4k in one fund rather than being diversified in several?
    Originally posted by Wassa123
    This question remains un-answered however
    • Credit-Crunched
    • By Credit-Crunched 5th Mar 18, 2:01 PM
    • 2,097 Posts
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    Credit-Crunched
    I am in a very similar position to you regards to my ISA and SIPP.

    Contributions will be circa 8k p.a into each with a transfer of 40k from my olds work pension with L&G.

    My investment time frame is 25 years +

    I like the idea of building my own portfolio through research, experience and education. So a multi asset fund will underpin my portfolio to start, but I will be looking at region / asset class specific funds to invest in myself.

    I think HL seems preferable, due to my investment amounts, unless someone can correct me.

    I will also be holding some AIM shares in my portfolio if that makes any difference.

    Sorry to hijack the thread!
    • bowlhead99
    • By bowlhead99 5th Mar 18, 2:22 PM
    • 7,833 Posts
    • 14,309 Thanks
    bowlhead99
    Newbie investor here...

    Why would OP be better off with 4k in one fund rather than being diversified in several?
    Originally posted by Wassa123
    This question remains un-answered however
    Originally posted by dqnet
    Sorry I thought I had addressed that in my middle two paragraphs of post #21.

    When you are only dealing with small numbers, any gains from making it more complicated are, inherently, going to be quite small.

    So when you look at your 3500 portfolio and think, OK, I'm going to take it up to be a 4000 portfolio and I am going to select a different fund for that last 500... if that 500 outperforms the average of the rest of your portfolio by a not inconsiderable 1% over the long term (e.g. you get 7% from the first part of the portfolio but 8% from this new part), you are gaining by 1% of 500, which is a fiver.

    You probably have a day job which pays you five to ten thousand fivers a year. It is far from critical to your success that you incur the research time and cost (and potential extra dealing cost, dependent on platform) just to try to make another one. It will take you at least an hour or two to do any reasonable review work on that fund you propose to add. And then if it turns out to be a successful one over the first couple of years of your ownership, you risk saying to yourself "aha, see, it *was* worth putting that token 500 into this other fund, it's made me more than a fiver" and repeating that again with another bunch of small low value investments without recognising that over the long long term the results could be very different as what goes up often comes down.

    So, for a newbie investor as Wassa123 is, 4000 is too small an amount of money to really need a bespoke four-fund solution. You can cover the major sectors across asset classes, depending on your investing style, with maybe 8-15 specialist funds or one generalist mixed-asset fund. At the 4000 level, it's the single generalist fund that strikes me as the obvious approach to take.

    If OP had been talking about fund minimums getting in the way on a 40k or 400k portfolio it would be an issue to look into and he would be right to bring it up if there was a provider where it was a genuine problem, but nobody would have batted an eyelid at the idea of someone using several separate funds to deploy the whole 40k or 400k. Whereas on a 4k portfolio it is more of a curiosity as to what is the point of even trying to do two 500 investments within a portfolio that only really needs one fund; haven't you got better things to do with your time.

    The fact that the OP was also concerned about the theoretical issues that the minimum investments would cause if he put 1000 into a fund instead of his preferred 500, and then the whole 1000 became worthless and he lost all that capital... also flagged him up as a newbie investor who was not very familiar with the investing concepts and might benefit from the suggestion to 'keep it simple'.

    HTH
    • bowlhead99
    • By bowlhead99 5th Mar 18, 2:36 PM
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    bowlhead99
    I think HL seems preferable, due to my investment amounts, unless someone can correct me.
    Originally posted by Credit-Crunched
    Not really on the 48k you'll have this year, if it's mostly going to be in Funds, at least compared to other choices on this thread, from a cost perspective.

    HL would be charging 200+ as annual admin fee on the 48k portfolio (0.45% a year, with the fee cap on the AIM part of the portfolio only kicking in when you have north of 40k of shares and exchange-traded stuff within the total) whereas AJ Bell would be closer to 100.

    0.45% vs [0.25% and a few dealing fees at 1.50 each] makes the 0.45% look quite expensive when it's being levied on 40k to start and increasing by 8k (plus investment growth on the whole lot) each and every year. After five years or so you'd be looking at potentially a 100k portfolio being charged at 450 with HL versus 250+ with AJB.

    On bigger portfolio amounts a 'fixed fee' rather than percentage based provider can get a much better result (e.g. IWeb), though I use AJ Bell for my own SIPP (which is heavy on shares and ITs so hits the cap for non-fund holdings).
    • Credit-Crunched
    • By Credit-Crunched 5th Mar 18, 6:00 PM
    • 2,097 Posts
    • 4,126 Thanks
    Credit-Crunched
    Not really on the 48k you'll have this year, if it's mostly going to be in Funds, at least compared to other choices on this thread, from a cost perspective.

    HL would be charging 200+ as annual admin fee on the 48k portfolio (0.45% a year, with the fee cap on the AIM part of the portfolio only kicking in when you have north of 40k of shares and exchange-traded stuff within the total) whereas AJ Bell would be closer to 100.

    0.45% vs [0.25% and a few dealing fees at 1.50 each] makes the 0.45% look quite expensive when it's being levied on 40k to start and increasing by 8k (plus investment growth on the whole lot) each and every year. After five years or so you'd be looking at potentially a 100k portfolio being charged at 450 with HL versus 250+ with AJB.

    On bigger portfolio amounts a 'fixed fee' rather than percentage based provider can get a much better result (e.g. IWeb), though I use AJ Bell for my own SIPP (which is heavy on shares and ITs so hits the cap for non-fund holdings).
    Originally posted by bowlhead99
    Many thanks for taking your time and effort to reply in detail, it is very much appreciated.

    For user experience would you say iweb or AJ Bell is a better bet? Or even II
    • dqnet
    • By dqnet 5th Mar 18, 8:46 PM
    • 213 Posts
    • 68 Thanks
    dqnet
    bowlhead99 - Another thank you from me.

    credit-crunched - bare in mind that if you do decide to go with AJ Bell and setup regular monthly investment amounts you will be charged 1.50 per fund. So if you have 3 funds each drip fed with 200 a month it will cost you 4.50 with AJ Bell and nothing with HL. You need to factor those costs in to when deciding. It's not just about the custody charge being cheaper with AJ, there are other things to factor.

    In any case both are great companies. I've called them both a few times now and feel comfortable dealing with any of them. It's about balancing your costs now. Choose your funds, check the ongoing fees and minimum amounts, decide if you will be doing more of a drip feed or lump sum and factor any currency conversions (if necessary).
    • bowlhead99
    • By bowlhead99 5th Mar 18, 9:26 PM
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    • 14,309 Thanks
    bowlhead99
    - bare in mind that if you do decide to go with AJ Bell and setup regular monthly investment amounts you will be charged 1.50 per fund. So if you have 3 funds each drip fed with 200 a month it will cost you 4.50 with AJ Bell
    Originally posted by dqnet
    In that situation (running a 600pm direct debit) you could of course just rotate what you invest in so you buy 600 of Investment A in month one of the quarter, 600 of B in month two, 600 of C in month three, then repeat. Of course, that requires you to log on once a month to make the change, to save the unnecessary 3 of charges by buying three things each and every month - you could easily keep it to one 1.50 transaction per month if a couple of minutes of your time is worth 3.

    Alternatively if you can't be bothered logging in - simply have your direct debit set up for 600pm but set up your combination of three-regular-investments to be 400 or 600 each for a total investment cost of 1200 or 1800. Then you fund the account as normal, 600 a month, but one or two months out of every three you just get a message saying you had insufficient funds to process the "regular investments" you had selected, and they will try again next month.

    For example, I only pay 2-300 a month into my Youinvest SIPP because only in the last few months of the year do I really decide how much I want to commit to pension this year versus ISA or VCT or cash or spending. My direct debit is set to a pretty nominal level relative to my salary. However, I don't usually want to pay 1.50 to deploy only 200 of funds (250 with tax relief) as it's over half a percent of what I'm buying.

    So iI would typically set my "regular investments" page to have at least 500 of purchase and if there isn't enough cash in the account to execute the purchase this month, so be it. Or maybe it's set up for 1000 across two investments, depending on mood. If insufficient cash, the order just rolls to next month.

    If I have recently sold something or got dividends from something there's often a bit of spare money lying around which can be spent as part of the regular investment process so maybe the regular investment will execute on the 10th of the month after all. I have a pretty extensive set of holdings and part of my money is quite "actively" invested. But for someone keeping it simple with just one or two or three main funds holding all their pension money, there is really no need to buy all of them every month. If each fund gets a bit of cash every other month, or every quarter, or every half year, it's still receiving a reasonably consistent drip drip drip of money over the decades.
    • Credit-Crunched
    • By Credit-Crunched 5th Mar 18, 9:34 PM
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    Credit-Crunched
    Thanks, I think I will buy 400 in a fund each month, so 2 a month until I have my portfolio complete with the funds I want, then I will start at fund 1 and repeat.

    Looking at diversifaction of funds and asset classes, how does this look to you?

    Asia Pacific
    Emerging Market
    Global Smaller Comp
    European Equities
    Japan
    North American
    UK Large and Mid Cap
    Uk Smaller Companies
    Commodities
    Commercial Property Fund

    SO in essence having 10 funds in my portfolio that have 400 a month added to them and the 40k i transfer in from my old pension split equally across them.
    • bowlhead99
    • By bowlhead99 6th Mar 18, 3:19 AM
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    • 14,309 Thanks
    bowlhead99
    SO in essence having 10 funds in my portfolio that have 400 a month added to them and the 40k i transfer in from my old pension split equally across them.
    Originally posted by Credit-Crunched
    That's "one way to do it" but not a particularly traditional way. For example, the US stock market is several times bigger than the European one and maybe ten times as big as AsiaPacific-ex-Japan-ex-EmergingMarkets. Would you really want the same amount of money in each? And you'd have as much in commodities (a diversifier which in small doses may provide a hedge against inflation) as you'd have in the entire US stockmarket (a major growth engine for your portfolio representing $30 trillion or more of global market value).

    If you look at the 40k that's currently invested in your pension, do the fund managers at L&G just allocate equally between all the asset classes and world markets they can think of? No. They research their allocations in terms of performance or volatility targets and how correlated the different sectors are to each other, and have reasoning behind what they do.

    You mention you want to be diversified across asset classes and regions. But I only see three asset classes: property, commodities and equities (assuming the named regions means equities in those regions). What about government bonds (index-linked and conventional), investment grade corporate bonds, high yield corporate bonds, emerging market bonds? Or a couple of bond funds that together cover those areas.

    Yesterday at 2pm you said a multi asset fund would underpin your portfolio. Presumably what you have with the old employer's L&G pension is - like most people's default pension fund with their employer - multi asset and internationally diversified rather than purely equities or purely bonds or purely cash or purely properties or purely UK or purely overseas. So it makes sense that when you move it out of that old pension into your nice shiny new pension you buy another multi-asset fund with it, and perhaps half of your new money goes into that fund too, leaving the other half of the new money for tinkering - as the outcome of your "research, experience and education" as you put it.

    However by 9.30pm you seemed to have abandoned the idea of "a multi asset fund will underpin my portfolio to start" and gone straight to "having 10 funds in my portfolio that have 400 a month added to them and the 40k i transfer in from my old pension split equally across them."

    Abandoning the investment approach of what underpins your portfolio (a core multi-asset fund) within 7.5 hours of suggesting it, despite nobody giving you any negative feedback, and then just proposing to invest equally into all the main sectors you have heard of... doesn't sound to me like someone who is full of "research, experience and education". It sounds like someone full of "impatience, exhuberance and enthusiasm".

    A certain amount of enthusiasm is a pre-requisite for running your own portfolio. The other qualities of impatience and exhuberance are negatives if you are hoping to run a calm, balanced, hassle-free portfolio that avoids excessive risk taking. Ignoring the AIM portfolio for a moment, which is perhaps supplemental to these plans.
    • Credit-Crunched
    • By Credit-Crunched 6th Mar 18, 10:09 AM
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    Credit-Crunched
    Thanks for you further responses, it appears to be crossed communications or poor on my behalf!

    I am making a single contribution this tax year of 25,000 which will be in a multi asset fund, yet to be decided. Most Likely VG80

    Points on bonds noted, I may have a slight exposure to them, but given my investment time frame I was looking for an equity heavy portfolio. In addition, the split across the sectors will not be equal, with a leaning towards UK and US equities.

    My AIM shares, are very niche oil exploration shares (my profession) and as such has significant upside, but also strong possibility of a nil value, these have been built up over the years and average PPS is cira 1.5p.
    Last edited by Credit-Crunched; 06-03-2018 at 12:58 PM.
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