|
|
Post by bracknellboy on Sept 13, 2015 18:44:13 GMT
This is where I come across as a financial numpty (again).
Outside of my pensions I am (very) lightweight in equities (kind of taken the probably erroneous view that my pensions represent a sufficient exposure). As a consequence my ISAs/PEPs are nearly all cash, bar a smattering. So I don't fall into the category of those who use a platform to manage their equity holdings and other investments.
I have an old S&S 'ISA' (what was then a PEP) which is a tracker. The fees are too high (1%), and I should have done something about that a long time ago.
Does anyone know what the best (fee rate) wise tracker ISA offers are ? L&G get mentioned for low fees generally, but I note that certainly within an ISA its FTSE All share is still 0.56%. On the other hand, I'm getting the impression that is about right, as by the time you add on platform ISA fees for example on top of the fund you are probably in same ball park.
does anyone know what the rules are about exposure to market changes during provider transfer requests. The L&G website has the following:
Your transfer will take a minimum of 14 days.
Whilst your ISA transfer is taking place you won't benefit from any rise in the markets and you could lose some income or growth.
Is this the norm ? A minimum 14 day window and potentially uncapped (no maximum stated !) of being dis-invested seems both extreme and unnecessary.
P.S. As I'm expecting the markets to react with unbridled joy at the news of JC being the new leader of Her Majesty's Opposition, I'd hate to run the risk of being disinvested for longer than is really necessary.
P.P.S. NOt that 'Her Majesty' is a position that JC recognises. I read that he may well turn down the normal appointment to the Privy Council which goes with his position. Which reminds me of the (semi famous) quote attributed to Winston Churchill when the Lord Privy Seal requested an audience while WC was in the WC (so to speak). WCs response was: "Tell the Lord Privy Seal I am sealed in the privy, and I can only deal with one s**t at a time!".
|
|
jonah
Member of DD Central
Posts: 2,031
Likes: 1,113
|
Post by jonah on Sept 13, 2015 22:28:28 GMT
I agree with vanguard as one worth considering. Whilst it ultimately comes done to cost, theirs have historically been as cheap as or cheaper than other people's and as good or better for tracking. in terms of platform, it really comes down to how many trades and size of holdings. monevator.com/compare-uk-cheapest-online-brokers/That url has a quarterly updated list of UK brokers and costs. Worth a read. that site in general has some good thoughts on index / passive investing. I'm not saying I agree with all of it, but it provides a perspective and a lot of good background. in terms of transfers, one thing to know is most platforms charge a fee to leave, usually per fund or stock held. Some platforms provide cash back for this. Not usually a deal breaker, but worth knowing. edit... Oops, I hadn't checked which site samford71 had linked to, apologies for the double posting... But that page is worth it  |
|
david42
Member of DD Central
Posts: 419 
Likes: 346
|
Post by david42 on Sept 13, 2015 23:40:43 GMT
Which Index? Do you want to track the FTSE all share index or the FTSE 100 index? The FTSE 100 index makes up 70% of the FTSE All Share index by market value, but it is biased to global companies in just a few market sectors. The FTSE 100 has underperformed the FTSE All Share Index over the last 15 or so years. Before that the two indices used to stay in line. Unit Trusts and Oeics Your L&G fund is probably their unit trust that tracks the FTSE All Share Index. Following the Retail Distribution Review, Unit trusts are all being required to separate out their platform fees from their fund management charges over the next year or two. The funds are called 'clean' once the platform charges have been removed. So clean funds are a lot cheaper. ThisIsMoney lists 7 unit trusts tracking FTSE 100 or FTSE All Share index all for less than 0.1% pa, and even the L&G clean fund is only 0.16% pa. Then you need to choose a platform. Last time I looked at the Monevator website, the cheapest ISA platform for Unit Trusts was Halifax Sharedealing, at £12.50 per year plus £12.50 per online trade. Transfers If L&G are leaving you out of the market for 14 days they must be doing the transfer as cash. You should be able to insist that L&G do and 'in-specie' transfer of your unit trust to a new platform that accepts unit trusts, then you can switch to a new fund of your choice after the transfer. You will need to decide whether it is worth paying the charge for the in-specie transfer plus the transaction charge for switching funds on the new platform to save losing 14 days in the market. Exchange Traded Funds Exchange traded funds do a very similar job to unit trusts, except that I have not yet found an exchange traded fund that tracks the FTSE ALL Share index. I use Exchange Traded Funds because they were cheaper before the Retail Distribution Review reduced Unit Trust charges. So I put 70% of my money in the Vanguard FTSE 100 exchange traded fund, supplemented with 30% in the more expensive Vanguard mid 250 exchange traded fund, which gives me a close approximation to a FTSE All Share tracker. Samford71 has listed the cheapest Exchange Traded Funds. |
|
|
|
Post by longjohn on Sept 14, 2015 12:44:15 GMT
I have just transferred my self select ISA and dealing accounts out of Selftrade (hate it now it's run by Equiniti) and into Interactive Investor. It wasn't simple and actually took five months to complete. I had 8 Investment trusts and 35 individual stocks on the LSE, 12 corporate bonds on ORB, and 5 stocks on AIM. However, during this time I could (and did) trade easily. The only time I was unable to trade was during the 5 day window when the accounts disappeared from Selftrade and reappeared in Interactive Investor. All dividends were paid on time too. I can recommend Trustnet.com for sorting the wheat from the chaff for collective funds. Wherever you go to get your financial information (financial adviser, comparison site, etc) you can be sure they will be using Trustnet as their data source. Read the 'about us' page - TrustnetFrom the home page go to ETF's and click ETF Home. That will give you 2991 funds worldwide to research. Set the benchmark to FTSE100 and that will filter it to 10 funds. You want full replication rather than synthetic so that narrows it to 5 funds. Read each one and go to the managers web site and read them too. You could do worse than just pick one and put some money into it. Do you own research. It's priceless! Even if you end up going to a financial advisor you will have the same knowledge as him and will soon know if you are being fed sales patter or genuine advice. John |
|
pikestaff
Member of DD Central
Posts: 2,140
Likes: 1,486
|
Post by pikestaff on Sept 14, 2015 13:58:02 GMT
Some platforms charge a platform fee for all investments but others (eg AJ Bell, TD) do not charge a platform fee for holding shares, including ETFs and ITs.
AJ Bell's ISA is fee free, as is TD's if you have at least £5,100 invested. If you are looking for a low cost solution I would go for an ETF with one of these brokers. I've been with TD for years and have no complaints. AJ Bell are slightly cheaper.
|
|
|
|
Post by bracknellboy on Sept 19, 2015 13:52:04 GMT
Thanks everyone for their comments.
Why ETFs over Index funds (or vice versa) ? I note that Vanguard have a FTSE 100 and 250 as ETF, but all share is an Index Fund.
|
|
jonah
Member of DD Central
Posts: 2,031
Likes: 1,113
|
Post by jonah on Sept 19, 2015 14:44:26 GMT
Work out what you want to invest in e.g. FTSE 100, FTSE 250, FTSE all share. Then work out the cheapest way to do it. Then find the cheapest platform to hold it. Iterate on points 2 and 3 if needed.* pikestaff comment about ABJ is a good one. I am trying to get more ETF / IT's in my account with them moving forward as they are lower cost. * Really there is a point 0 - work out your asset allocation and why you want it before you work on the what, but hey ho |
|
james
Posts: 2,205
Likes: 955
|
Post by james on Sept 19, 2015 15:15:32 GMT
Sometimes the ETF will have lower in-built charges. Sometimes a platform will have lower charges for ETFs. An ETF is tradable without notice whenever markets are open, though that isn't a guarantee that there will be a buyer. A fund will normally require at least several hours of notice until the next trading valuation point for a sale. In the US ETFs originally became popular in part because they have a significant tax advantage over unwrapped funds in the US. There's a higher capital gains tax charge for holdings of less than a year in the US, with investors having to pay this each year on the trades made by the fund that year. Very different from the UK you pay only when you sell, not when the fund sells, approach. The ETFs circumvent this by having a middle-man holding company that doesn't do actual buying and selling to as much of an extent as the real investor buys and sells, greatly reducing the tax cost. This tax issue is part of why some care with US studies of active vs passive funds is needed, because in the UK there is less of a tax disadvantage for actives than there is in the US. |
|
|
|
Post by bracknellboy on Sept 19, 2015 15:29:54 GMT
jonah: Yes I get that. My specific question / interest was perked though as to why e.g. Vanguard would use different vehicles for its 100/250 (ETF's) versus All share. Nothing more. FWIW: For ISAs I've previously (in fact currently) held FTSE All Share tracker and Self Select (UK). Depending on difficulty of transfer, I will almost certainly shut the second of these down and transfer into a UK tracker (TBD which) and may or may not bother with consolidating the former.
|
|
james
Posts: 2,205
Likes: 955
|
Post by james on Sept 19, 2015 19:06:30 GMT
Though there is at lest one error, the assertion that "The open-ended structure of an OEIC means its price reflects the underlying value of its assets, rather than any fluctuations in supply and demand for the fund itself". An OEIC will typically have a pricing tunnel within which the price will vary based on that day's balance of supply and demand. Alternatively it can be based on a longer-term trend rather than just the single-day balance. Or a dilution levy can be imposed that increase the cost of buying and/or selling. It's somewhat odd that this isn't mentioned when the probably smaller price variation in an ETF is mentioned. Though there's actually no guarantee that either variation will be small when they are holding illiquid or potentially illiquid assets like bonds or property.
These variations are similar to the bid or offer pricing basis used for unit trusts, where they would switch from the usual offer pricing to bid pricing if there were more sellers than buyers for more than a little while. Offer pricing is normal and used when buying is more in demand than selling. Bid basis is used to widen the bid-offer spread when it's necessary to actually sell shares to cancel units, forcing the sellers to pay the cost.
It's perhaps also worth explaining why funds use forward pricing. It's to prevent investors from knowing the future at the time they buy or sell, which was gamed until funds switched from past to forward pricing. The investors would know what actually happened on the stock markets so they would know whether the fund price was higher or lower than the real value and some would buy only if the stock market had gone up so that the fund was priced below the real value of the shares it held. Similarly some would sell if markets had dropped, getting the price before the drop.
|
|
|
|
Post by bracknellboy on Sept 20, 2015 16:40:52 GMT
Going slightly off topic. Anyone familiar with AJBell as mentioned above ? I have opened an account with them and transferred in this years ISA allowance. What I cannot seem to be able to do is find a way of funding the £4.95 dealing charge from anything other than my ISA account, and it won't let me add allowance plus dealing charge to the account (not surprisingly). While for first deal its hardly an issue to lose the £4.95, it does raise the question about how ongoing platform charge and any future dealing charge will be funded/handled i.e. how do I get it funded without having to liquidate part of the allowance.
Do I need to setup a dealing account as well, put cash in that ?
EDIT: Have setup a dealing account and moved cash into that, but no joy: it won't cross subsidise. Strange I'd expect some form of pan-account cash account which could be used to fund charges.
EDIT2: I note that it says in the bumf that 'All charges will be deducted from your ISA'. Which seems to answer the question, but means I will have to leave enough of my allowance sitting in there as cash to fund future charges stream. A minor wart.
|
|
jonah
Member of DD Central
Posts: 2,031
Likes: 1,113
|
Post by jonah on Sept 20, 2015 21:23:46 GMT
Going slightly off topic. Anyone familiar with AJBell as mentioned above ? I have opened an account with them and transferred in this years ISA allowance. What I cannot seem to be able to do is find a way of funding the £4.95 dealing charge from anything other than my ISA account, and it won't let me add allowance plus dealing charge to the account (not surprisingly). While for first deal its hardly an issue to lose the £4.95, it does raise the question about how ongoing platform charge and any future dealing charge will be funded/handled i.e. how do I get it funded without having to liquidate part of the allowance. Do I need to setup a dealing account as well, put cash in that ? EDIT: Have setup a dealing account and moved cash into that, but no joy: it won't cross subsidise. Strange I'd expect some form of pan-account cash account which could be used to fund charges. EDIT2: I note that it says in the bumf that 'All charges will be deducted from your ISA'. Which seems to answer the question, but means I will have to leave enough of my allowance sitting in there as cash to fund future charges stream. A minor wart. My account with them needs the dealing charges to be paid from within the account. Not ideal I agree.
|
|
|
|
Post by longjohn on Sept 21, 2015 17:46:18 GMT
I have just transferred my self select ISA and dealing accounts out of Selftrade (hate it now it's run by Equiniti) and into Interactive Investor. It wasn't simple and actually took five months to complete. I had 8 Investment trusts and 35 individual stocks on the LSE, 12 corporate bonds on ORB, and 5 stocks on AIM. However, during this time I could (and did) trade easily. The only time I was unable to trade was during the 5 day window when the accounts disappeared from Selftrade and reappeared in Interactive Investor. All dividends were paid on time too. John 21 Sept - A quick update on the transfer I had a couple of dividends due last Friday and they have appeared in my Selftrade ISA and not in my II ISA. Not sure who let the side down (am awaiting replies to emails). As the dividends went ex-div eight weeks ago the companies records would show Selftrade as the owner. I expected some sort of redirection to be in place for this but it appears not to be.
|
|
