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Understanding HSBC ISA / InvestDirect

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onthemove
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Understanding HSBC ISA / InvestDirect

#62981

Postby onthemove » June 26th, 2017, 2:40 pm

Does anyone have hands on experience of HSBC?

I'm looking at options for my Barclays ISA.

I was (and may still be) considering AJ Bell, but a detailled read through their T&Cs flagged up a few things that made me nervous of trusting a large amount of money to them. (Just my own personal reading of their T&Cs - IANAL, and I don't know the regulatory details to fully understand them in that context; but istm there is the suggestion that they could use other parties outside the UK, and that that may impact their ability to recover assets in the event of problems, and that in the event of problems all risk lies with me, which leaves me feeling less than reassured)

So I want to at least make sure I consider another 'big bank' option.

Which leads to HBSC.

But I'm baffled.

I've looked at their website, and phoned them up as well. I'm still baffled as to how they organise things - particularly regards their stocks and shares ISA around/inside/next to/above/whatever the 'invest direct' thing/platform/account/huh?.

The woman I spoke to said that (assuming I go through with opening up the ISA etc) I'd have to open an Invest Direct 'platform' ... or is that account? It wasn't clear. And that within that - or is it along side that? It wasn't clear.... sits the ISA.

So to try and get my head around it, I asked her how it will show the cash and investments...

She seemed to think that the investments and cash for both 'parts' would all show separately on the same screen.

She seemed to be saying that when I look at the overview I'd see ...

- a line for non-ISA investments,
- a line for non-ISA cash
- a line for ISA investments
- a line for ISA cash

Really?

Does anyone have an HSBC stocks and shares ISA who could confirm how it is presented / organised?

From what their website, and call center, both seem to describe, it all feels very fragmented and confused.

Is the ISA part - both cash and investments - not clearly grouped together into a single account the way that it is with other brokers?

For example I have two accounts with halifax. It is always clear which account you are looking at..

If you are looking at the ISA, you see the ISA investments listed together with the ISA cash balance on the same page. They are just details of one and the same account - and presented as such.

If you look at the trading account, you see the non-ISA investments and non-ISA cash together on the same page.

The cash and investments are always clearly coupled with each other.

But HSBC seems really confused as though there isn't such a clear aggregation of the cash and investments together as a single account.

It seems as though the ISA is somehow 'within' the InvestDirect account (the lady on the phone called it a platform), but it is actually a separate account. But you can't have the ISA without the InvestDirect platform (account?)

And the annual charges are for the InvestDirect platform (Account?), the ISA doesn't have any annual charges of its own (which is the opposite of what I'm used to where the dealing accounts are normally cheaper / free with the ISA having a charge to cover admin with HMRC.

Is this one of those things that makes perfect sense once you have it all opened in front of you and come to use it?

Thanks

dspp
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Re: Understanding HSBC ISA / InvestDirect

#62992

Postby dspp » June 26th, 2017, 3:16 pm

I can't give a straight answer, but this may help.

I bank with HSBC and checked their brokerage offering a year or so ago.

The fee structure for the brokerage is almost identical to that of Interactive Investor, and as far as I can see is unusual in that respect. I use II myself as a brokerage. Therefore I suspect that HSBC use the II platform but rebrand it, but I have not been able to confirm this. I haven't opened an HSBC brokerage account so I am not sure myself yet. I could be completely wrong of course.

If I am correct then it would behave much as the II one, i.e. a 'trading' portfolio and an 'ISA' portfolio. What I do know is that HSBC don't offer the option of a SIPP portfolio.

regards, dspp

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Re: Understanding HSBC ISA / InvestDirect

#63003

Postby flint » June 26th, 2017, 4:04 pm

onthemove

We have a Bank a/c with First Direct. Been with them since they started - never paid a penny in charges or fees.
I think you need a Bank a/c with them to open a Sharedealing a/c. There is a charge of £10 per qtr. for each Sharedealing a/c.
We have 3 such accounts. They are shown separately and the holdings in each are listed separately. Cash is shown separately for each Sharedealing account.
We can opt for dividends and sale proceeds to be paid in to a Bank a/c or be retained in the relevant Shareholding a/c.
Buying and selling fees are about £12 per transaction - OK for us as we tend to have a few large transactions.
All shares are held by HSBC nominees.
There have not been any problems with the admin. Dividends credited at midnight on the date of payment.
Shares can be bought within your credit limit, which in our case is much larger than any transaction we would contemplate.
In short we find it an excellent service, probably more suited to a LTBH investor than a frequent trader.

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Re: Understanding HSBC ISA / InvestDirect

#63010

Postby onthemove » June 26th, 2017, 4:26 pm

dspp wrote: Therefore I suspect that HSBC use the II platform but rebrand it,


Thanks

The thought hadn't even crossed my mind that a global bank the size of HSBC might farm out their brokerage.

So I've quickly googled it, and admittedly it's difficult to get up-to-date information.

One search result (in the comments section) suggested that III use halifax.
(Apparently I can't post links)

But then another suggests that Motley Fool use III.

This one suggests that HSBC provide their own (but I can't see what date that was)
(apparently I can't post links)

And my main concern is exactly who with and where my shares will actually be held. The AJ Bell T&Cs suggest (from my reading) that they may not actually be held by the company (AJ Bell) whom I would be entering into the agreement with. If HSBC aren't holding the shares themselves (in their own ring fenced area) then that would undermine the reason why I'm considering them.

I will have to dig deeper this evening. I was avoiding III because I don't consider them to have the financial weight of a bank like HSBC, and they seem to be too day trader oriented for my liking. But if III are where my holdings would actually be held, then that would negate my main reason (size) for choosing HSBC.

As an aside - further googling revealed this post from TMF...

(Sorry, apparently I can't post links).
"She then came out with something that really shocked me and that was that the price that you see on the dealing screen, (for 15 seconds), may not be the price that you actually get when the trade goes through at as they do not guarantee that what you see and what you click to agree to will be what you actually get. – (Once again; this is apparently something that “you have to sign up to” when you agree to take one of their accounts)."


That stood out to me, because I noticed exactly the same thing in the AJ Bell terms and conditions yesterday, and was another of the aspects that made me think twice. It's annoying that it seems HSBC might be like that too.

Or is it the case that this is industry standard practice and I haven't realised before? I always thought that the price I agree in the 15 seconds was the price I got. Otherwise why bother with a real time quote?

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Re: Understanding HSBC ISA / InvestDirect

#63013

Postby flint » June 26th, 2017, 4:38 pm

onthemove

If you use HSBC your shares will be "ringfenced" in the HSBC nominee account.

The price you see when placing an order is not guaranteed, however, in more cases than not the price we have got is better, in a few cases it is the same, it has never been worse.
I suspect that their buying power is a factor in shaving off a small % of the original quote.

Perhaps I should have mentioned that I have a SIPP with Hargreaves Lansdown. Again, excellent service, but more expensive than HSBC.
I use this account for foreign shares and funds. It holds less than 5% of our total shareholdings.

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Re: Understanding HSBC ISA / InvestDirect

#63019

Postby dspp » June 26th, 2017, 4:52 pm

The trading platform for III is definitely licenced to various other organisations. I recall TMF migrated their offering to III a few years ago. I don't know how many others use the III platform. I have never had an issue with the III platform so I certainly wouldn't put that down as a concern. I think there is someone posting occasionally on here who has quite intimate understanding of the relevant platform, but can't say so very openly (and its not me).

The 15-sec delay is not unusual, and again I wouldn't call that a concern for most folk. If you are a day trader it might be, or dealing with very large sums.

As the other poster has said, whoever HSBC are using, your shares would be ringfenced in the HSBC nominee holdings as far as I can tell.

When I discussed this stuff with my HSBC account mgr she put me in direct touch with the relevant HSBC department. If I recall correctly that phone call was when I was in the branch and she was able to put me through on their internal lines. I don't know if you can get through to the same people if dialling in from the outside for casual enquiries. You will need an HSBC bank account.

(if you stick £50k in I think you get an HSBC account with bells and whistles and gold stars and wotnot on it)

regards, dspp

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Re: Understanding HSBC ISA / InvestDirect

#63033

Postby mc2fool » June 26th, 2017, 5:16 pm

onthemove wrote:One search result (in the comments section) suggested that III use halifax.
(Apparently I can't post links)

But then another suggests that Motley Fool use III.

Both Interactive Investor and Motley Fool used to be re-badged Halifax Share Dealing services, but Interactive Investor stopped using them a few years back and implemented their own system, and Motley Fool is now a re-badged Interactive Investor service.

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Re: Understanding HSBC ISA / InvestDirect

#63035

Postby dspp » June 26th, 2017, 5:24 pm

By the way you can post links after a certain amount of time and/or posts. It is an antispam feature. regards, dspp

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Re: Understanding HSBC ISA / InvestDirect

#63053

Postby YeeWo » June 26th, 2017, 6:35 pm

flint wrote:In short we find it an excellent service, probably more suited to a LTBH investor than a frequent trader.
I've had an HSBC InvestDirect account for 10+ years. AFAIK it's their own system, a legacy of the JV with Merrill Lynch 15+ years ago. I agree with the comment above, if you're a LTBH investor they're great. For trading better options probably exist. HSBC charge £10.75 per quarter which becomes (%-wise) very reasonable indeed as your holding gets into six figures........

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Re: Understanding HSBC ISA / InvestDirect

#63070

Postby BobbyD » June 26th, 2017, 8:43 pm

Haven't used HSBC in a few years. Back then it was a perfectly servicable if not particularly pretty site somewhat in need of bringing in to the 21st century but not-overly distinguishable from any other broker. It was my least favourite site to use but they did handle SCRIP and at that point didn't charge a quarterly fee which is why I eant there, stayed there, and left there.

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Re: Understanding HSBC ISA / InvestDirect

#63100

Postby gt94sss2 » June 26th, 2017, 11:14 pm

I also used to use HSBC InvestDirect before they introduced an annual fee.

The HSBC platform is their own - its not a version of iii's - and the only other people to use it are FD (being part of HSBC). Its looks 'dated' and doesn't have some of the bells and whistles of other providers but I guess HSBC find it works for them and that there is no reason for them to change it - which I think is a bit of a shame as I would like to see it make more use of .pdf's etc rather than them posting some documents/statements to customers. But as long as you're happy with the charging structure its a good place for LTBH investments

When HSBC say:

The woman I spoke to said that (assuming I go through with opening up the ISA etc) I'd have to open an Invest Direct 'platform' ... or is that account? It wasn't clear. And that within that - or is it along side that? It wasn't clear.... sits the ISA.


Like most brokers, if you want an ISA, you also need to open a standard dealing (aka InvestDirect) account with them even if you never use it. SO you would have 2 accounts with the same platform/site/provider.

The platform displays your holdings as described in the OP@

- a line for non-ISA investments,
- a line for non-ISA cash
- a line for ISA investments
- a line for ISA cash


The first two being your non ISA/dealing account - though its possible to also just see the total value of your ISA or dealing account if you prefer elsewhere.

Hope this helps.

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Re: Understanding HSBC ISA / InvestDirect

#128168

Postby noodle » March 26th, 2018, 9:07 pm

Hi all,

resurrecting this thread from last year!

How are peoples experience of HSBC investdirect? From my research its got a terrible reputation with some reviews complaining about long time to place/ confirmation of a transactions, difficulty logging in at all, not live prices, account errors?

Also i'm not clear in their documentation regarding settling trades, obviously its T+2 or 3 as normal but from the wording I wasnt sure if you actually have to wait the 2 or 3 days before you can use that money for another buy? Obviously normaly you can buy within 5 mins with same cash with other brokers but the wording here was odd?

Im tempted towards investdirect plus as I believe they still don't charge a foreign exchange conversion fee ie for trading US stocks which is very rare, and in an isa that would be looking at 2 or 3% for roundtrip with most other providers!? So although their $30 trading fee is expensive its dwarfed by others fx fee... I would really like to keep my account within my ISA hence looking at HSBC rather than a US broker or keeping USD in a different account.

Any feedback or people experiences greatly appreciated.

Thanks

Phil


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