Cheapest way to invest?

[whatafool]

Hi, a couple of questions that I'm hoping you guys might help answer:

1) I have invested in VCTs for the last few years via Hargreaves Lansdowne. They have a good range, are easy to use and offer various discounts, although I'm aware I am paying them some fees to do this. Are other brokers (eg Wealthclub) any better? I did have a guy from a St James' Place affiliate try to persuade me that it was cheaper to go through them, but I think he was trying to mislead me. What do other people use? What are the benefits of setting up my own CREST account, and is it worth it?

2) I basically invest each year after my annual bonus; once my ISA allowance is filled up, then I make additional pension contributions using carry over from previous years (this will be the final year I can do that), and then the remainder goes into a diversified range of VCTs. This does mean a high proportion of my net wealth is in VCTs (around 25%). Of my financial assets (ie not including my house), VCTs represent well over 50%. Is this crazy? It seems to me the tax efficiency (the 30% rebate and the tax-free dividends) simply make them a better investment than anything else out there. Are there other things I should be doing? I don't believe buy-to-let has decent yields anymore, particularly after the change in mortgage interest tax-relief, at least not in London where I live and work. What might I be missing / should I be considering?

[marcop]

Hi,
With your combination plenty of cash but relatively moderate knowledge of investing, my first tip is pay for some professional financial advice.

That said, some quick answers to your questions:
1) Cavendish Online would be your cheapest route.
2) Please just Google "benefits of CREST account"
3) Yes 50% in VCTs is too much but you can start selling them after 5 years to balance inflows and outflows to your VCT pot
4) Without financial advice or doing more of your own research I'd stick to VCTs as your most exotic option, but see Wealth Club for good descriptions of other options.

[Gostevie]

Hi,

I have previously held personal CREST accounts and am a big fan of them, but as far as I am aware none of the usual online brokers offer them anymore, at least not to new clients, as they say it causes them too much administration. (Personally I think that's a load of cobblers but heigh ho.) At least a couple of telephone brokers offer them but they aren't cheap:

https://www.redmayne.co.uk/crest

https://www.blankstonesington.co.uk/our ... embership/

If anybody knows of a reasonably cheap online broker which still offers CREST accounts I'd be delighted to hear about it.

Gostevie

[BusyBumbleBee]

Hi, ... I have invested in VCTs for the last few years ... What are the benefits of setting up my own CREST account, and is it worth it? ... This does mean a high proportion of my net wealth is in VCTs (around 25%) ... What might I be missing / should I be considering?

First welcome to the Lemon Fool - there are a lot of experienced investors here who are very willing to share their knowledge - so make use of them and try to get a feel for their areas of expertise.

It is worth while therefore exploring the whole site and seeing what has been said before on topics that interest you.

I suspect that I am known here as being very bearish on VCTs so it won't surprise you to hear that my advice is not to let the tax tail wag the dog. But if you must, then have a look at EIS schemes - they are also tax effective - but dangerous. I always find my own and have done quite well over the years sometimes using (riding along with) a 'boutique' investment house in the West End.

You don't say whether you are married, have children or a mortgage on the house or want to retire early and live the life of Riley. Being married doubles most allowances. Having children gives a really good incentive to save money for their future - having a mortgage means it would be better to pay it off and so on.

The cheapest way to invest in VCTs is to use the DRIS by the way - no fees and you get a discount in many cases.

Regards - BBB