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Managing (or avoiding) multiple S&S ISA accounts

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iambic
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Managing (or avoiding) multiple S&S ISA accounts

#172996

Postby iambic » October 11th, 2018, 1:26 pm

Apologies for the total newbie question, but trawling through this forum has given me so much useful insight already that I thought I'd pose the question I've been trying to figure out an answer to, in the hope that you can provide me with some guidance.

My husband & I started on our journey towards financial independence at the start of 2018 & after tons of reading, we settled on a portfolio that looks reasonably diversified & that we're happy with. Now to put it into action!

My husband opened an ISA with Vanguard & we've started putting some money into various index trackers within that account. Now I'd like to start getting some cash into some different parts of the portfolio (bonds, a property REIT, an emerging markets tracker etc.) I have an ISA with Fidelity (via Cavendish Online) already, with some money in Fundsmith Equity (have had it from before I realised how expensive active funds were...), so I was planning to buy the additional portfolio elements within my Fidelity ISA for some platform diversification & because some of the funds we want are not available on Vanguard (or cost more on Vanguard).

I know it's very early in our investing journey & I'm trying not to get carried away, but reading about HYP's & Investment Trusts has made me think about some of the other areas (apart from equity index trackers) that I'd like to learn more about & hopefully incorporate into our portfolio one day.

My question (got to it at last) is about how best to manage all this, whilst keeping our money within ISA wrappers? Given that we can each only pay into one S&S ISA per year, it would be great if there was one platform that had all the funds/shares/IT's etc. that we wanted to buy. Although this would bad for platform diversification, it would make topping up, rebalancing & adding different elements to the accounts straightforward. This doesn't appear to be possible though. Fidelity do now offer shares on their site, however at £10 per deal this doesn't seem like a sensible place to start building a HYP alongside our funds.

Is there a better platform that would offer a wide range of funds, shares & IT's, which might be suitable? I'm loathe to go down the route of having multiple S&S ISAs, of which I'd only be able to amend one per year. I've tried comparing platform costs but to be honest it's such a minefield of information I end up more confused. TIA for your help :)

Alaric
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Re: Managing (or avoiding) multiple S&S ISA accounts

#173005

Postby Alaric » October 11th, 2018, 1:52 pm

iambic wrote:Is there a better platform that would offer a wide range of funds, shares & IT's, which might be suitable?


Fidelity's platform by its background is orientated towards OEICs. Platforms that offer stock market investments mostly offer OIECs as well, but you may find some OIECs funds unavailable.

£ 10 or some similar amount per deal is the usual price. It is possible to go cheaper by using bulk dealing days. It can be necessary to think in terms of a minimum purchase size of £ 1000 or thereabouts for shares etc, to keep the dealing costs down when expressed as a percentage of the investment.

You get a trade off. All sites will charge for dealing in shares, but charging a regular fee as a percent of share investment value is uncommon. Some sites will charge nothing for buying OIECs but impose a platform fee as % of value. Others apply the same costs as for buying shares.

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Re: Managing (or avoiding) multiple S&S ISA accounts

#173011

Postby JohnB » October 11th, 2018, 2:03 pm

I'd not get obsessed about trickling money into all parts of a diversified portfolio each year. With 6 things, you and your husband could each buy one tranche a year on a 3 year cycle, so only 2*£10 dealing costs. Don't mirror your portfolios, each have a different provider both for diversity of offering, but also reducing risk of provider failure. This ties your finances together, so make sure your marriage is healthy! You also need a rebalancing strategy, again, I'd do it rarely. Decide whether to have providers that charge fixed or %age custody fees, the economics will change as your portfolio grows.

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Re: Managing (or avoiding) multiple S&S ISA accounts

#173020

Postby iambic » October 11th, 2018, 2:23 pm

JohnB wrote:I'd not get obsessed about trickling money into all parts of a diversified portfolio each year. With 6 things, you and your husband could each buy one tranche a year on a 3 year cycle, so only 2*£10 dealing costs. Don't mirror your portfolios, each have a different provider both for diversity of offering, but also reducing risk of provider failure. This ties your finances together, so make sure your marriage is healthy! You also need a rebalancing strategy, again, I'd do it rarely. Decide whether to have providers that charge fixed or %age custody fees, the economics will change as your portfolio grows.


Thanks John, I think my original post was a little unclear - Fidelity charge £10 per deal (no charge for funds although there is a 0.25% platform fee for using Cavendish Online), so if I want to buy shares in say, 10 different companies this month, that would be 10 x £10 in fees, then if I want to buy more shares in the same 10 companies in 6 months' time, that would be another 10 x £10 fees. Unless I've misunderstood their fees completely!

To be honest, at the moment I'm mainly trying to work out how to build a good fund-based portfolio, given that I'd like to keep everything wrapped in an ISA, but can't find a platform which offers access to all the funds we would want to hold. It would be great to have access to shares down the line through the same platform, but ideally not one which comes with extortionate fees! :)

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Re: Managing (or avoiding) multiple S&S ISA accounts

#173031

Postby Alaric » October 11th, 2018, 2:55 pm

iambic wrote: It would be great to have access to shares down the line through the same platform, but ideally not one which comes with extortionate fees! :)


£ 10 a deal is a normal price. Unless you are investing say £ 20,000 to £ 50,000, I don't think you should be thinking in terms of 10 companies at once.

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Re: Managing (or avoiding) multiple S&S ISA accounts

#173035

Postby iambic » October 11th, 2018, 3:03 pm

Alaric wrote:
iambic wrote: It would be great to have access to shares down the line through the same platform, but ideally not one which comes with extortionate fees! :)


£ 10 a deal is a normal price. Unless you are investing say £ 20,000 to £ 50,000, I don't think you should be thinking in terms of 10 companies at once.


Maybe I'm missing something, but it looks like some other platforms charge less than £10 (iWeb appears to charge £5 per deal for instance)?

The 10 x companies was just an example to illustrate how the fee charges would add up. As I mentioned in my original post, I'm not looking to buy shares at the moment (I clearly still have loads to learn!) but I am trying to plan ahead so would like to choose where to open my S&S ISA on the best all-round platform for funds, shares, ITs etc.

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Re: Managing (or avoiding) multiple S&S ISA accounts

#173054

Postby Alaric » October 11th, 2018, 3:45 pm

iambic wrote:Maybe I'm missing something, but it looks like some other platforms charge less than £10 (iWeb appears to charge £5 per deal for instance)?


If you think in terms of investing always at least a four figure sum, a charge in the range £ 5 to £ 20 is just small change. What you don't want is the platform helping itself to a percentage of the total worth once there's a reasonable amount there.

At a possible risk of administrative inefficiency when the industry processes the switch, it's always possible to start off with one platform that didn't charge deal by deal if investing small but frequent amounts into OIECs and then move elsewhere if the fees as a % of worth became significant.

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Re: Managing (or avoiding) multiple S&S ISA accounts

#173060

Postby iambic » October 11th, 2018, 3:58 pm

Alaric wrote:
iambic wrote:Maybe I'm missing something, but it looks like some other platforms charge less than £10 (iWeb appears to charge £5 per deal for instance)?


If you think in terms of investing always at least a four figure sum, a charge in the range £ 5 to £ 20 is just small change. What you don't want is the platform helping itself to a percentage of the total worth once there's a reasonable amount there.

At a possible risk of administrative inefficiency when the industry processes the switch, it's always possible to start off with one platform that didn't charge deal by deal if investing small but frequent amounts into OIECs and then move elsewhere if the fees as a % of worth became significant.


Thanks Alaric, that makes sense. I've got little enough in Fidelity that it's probably worth sticking with them for now (being charged 0.25% platform fee as access them through Cavendish Online) & wait until I've built up some more significant funds (OEIC's). Hopefully by then I'll feel more confident about buying shares to start some sort of HYP, then I can look at shifting to a different provider.

The more I learn about investing, the more I realise how little I know! :?

JohnB
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Re: Managing (or avoiding) multiple S&S ISA accounts

#173080

Postby JohnB » October 11th, 2018, 5:12 pm

Have you read Lars Kroijer's "Investing Demystified"? Its worth reading that and decide if you have an "edge" before moving away from index funds into developing a HYP

Tim Hale's "Smarter Investor" book is good too

iambic
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Re: Managing (or avoiding) multiple S&S ISA accounts

#173200

Postby iambic » October 12th, 2018, 8:24 am

JohnB wrote:Have you read Lars Kroijer's "Investing Demystified"? Its worth reading that and decide if you have an "edge" before moving away from index funds into developing a HYP

Tim Hale's "Smarter Investor" book is good too


Thanks John, always nice having books recommended & I've got both those books on my Amazon wish list so will hopefully get to reading them soon.

tramrider
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Re: Managing (or avoiding) multiple S&S ISA accounts

#173469

Postby tramrider » October 13th, 2018, 12:33 pm

iambic wrote:My question (got to it at last) is about how best to manage all this, whilst keeping our money within ISA wrappers? Given that we can each only pay into one S&S ISA per year, it would be great if there was one platform that had all the funds/shares/IT's etc. that we wanted to buy.


The best site for comparing online brokers is from Monevator, but it is not simple. You need to estimate how large your total investment will be (for charges as a % of holdings/fund holdings only) and how many purchases you will make each year. Also, some charge a flat fee each year, particularly for ISAs.

http://monevator.com/compare-uk-cheapes ... e-brokers/

For example, I use
iWeb for one ISA which costs £25 to open, no holding charge and £5 per transaction
Selftrade for one ISA which costs £0 to open, about £18 per quarter holding charge for me (using it for trading charges can reduce this to zero) plus 0.3% for the funds, offset against transactions and £10.99 per transaction except £1.50 purchases on the monthly trading day
X-O holds my SIPP and costs £5.99 per transaction

I would suggest that you have one ISA for you and one for your husband. It is best to change any providers only at the start of a new tax year, and I have found it painful to transfer share holdings from one to another. Focus each ISA on a different area of investments, such as ETFs or ITs, so you can compare them over perhaps the first 5 years. Top up just a few ETFs, funds, or ITs per year, but you could add one or two new ones to each ISA per year to broaden your spread.

I find the monthly £1.50 purchase fee at Selftrade very helpful to use up a few hundred pounds of dividends each month or so as they arrive, and it can be altered to top up something different each month. I think that Halifax and others offer a similar procedure, but not iWeb and X-O.

I hope this helps.

Tramrider

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Re: Managing (or avoiding) multiple S&S ISA accounts

#174636

Postby iambic » October 18th, 2018, 9:45 am

tramrider wrote:I hope this helps.
Tramrider


Hi Tramrider, that's really helpful thank you - exactly the kind of advice I was after. I find it quite tricky to understand which fees apply when looking at platforms as I've so far only invested in funds whose charges seem a bit more straightforward to me! I'll look into the platforms you mentioned though :)

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Re: Managing (or avoiding) multiple S&S ISA accounts

#174637

Postby RececaDron » October 18th, 2018, 10:01 am

iambic wrote:an ISA with Vanguard
an ISA with Fidelity (via Cavendish Online)
my Fidelity ISA
each only pay into one S&S ISA per year,
multiple S&S ISAs


Lots of ISAs.

What about pensions? Do you have the pension bases already covered?

Urbandreamer
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Re: Managing (or avoiding) multiple S&S ISA accounts

#174687

Postby Urbandreamer » October 18th, 2018, 1:45 pm

I don't see an "issue" with having multiplt S&S ISA's. I have 3 myself.
My wife has a couple and loads of cash ones.

Mine are:
A J Bell
Selftrade
Pilling & co


Each is "good"* and allows a wide range of investments. I have everything from Shell through to an AIM quoted medical scanner company and a few Investment trusts in them.

One thing to be aware of is that each will charge a fee. As others have said, you need to look at those fees and decide if you are happy paying them and paying multiple fees. If you are then there really isn't an issue is there? Keep an eye on the fees though, they can become a real drain.

I'm not going to get into a debate about active V passive investing. Read up and make you own mind up about what's appropriate for you, and by you I don't mean the plural. There are two of you and one may be desperatly unhappy adopting one or other stratergy. Split the task and each can adopt the stragergy that they are most comfortable with.

Be carefull with the passive route though, it's more difficult than you think. For example your attempt to "diversify" may just produce something like an index tracker or diversified investment trust with multiple fees!

There are many great finance books. Everything from The Intelligent investor to the Zurich Axiums. The latter is definatly NOT for fans of a passive approach (indeed it's about speculation rather than investment).

* Selftrade got a poor reputation for custumer service before it was taken over and some here are unhappy with A J Bell, but I find no issue with either. Pilling's is a traditional stockbroker hence quite expensive, but their service is excelent.

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Re: Managing (or avoiding) multiple S&S ISA accounts

#175346

Postby xeny » October 21st, 2018, 2:57 pm

iambic wrote:
Thanks Alaric, that makes sense. I've got little enough in Fidelity that it's probably worth sticking with them for now (being charged 0.25% platform fee as access them through Cavendish Online) & wait until I've built up some more significant funds (OEIC's). Hopefully by then I'll feel more confident about buying shares to start some sort of HYP, then I can look at shifting to a different provider.

The more I learn about investing, the more I realise how little I know! :?


You've presumably looked at http://monevator.com/compare-uk-cheapes ... e-brokers/ ?

In general if you're in the accumulation stage of chasing FI/RE you probably want capital growth more than yield, so a HYP may not be a good fit for your current goals?

TheMotorcycleBoy
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Re: Managing (or avoiding) multiple S&S ISA accounts

#175471

Postby TheMotorcycleBoy » October 22nd, 2018, 10:48 am

iambic wrote:Apologies for the total newbie question, but trawling through this forum has given me so much useful insight already that I thought I'd pose the question I've been trying to figure out an answer to, in the hope that you can provide me with some guidance.

My husband & I started on our journey towards financial independence at the start of 2018 & after tons of reading, we settled on a portfolio that looks reasonably diversified & that we're happy with. Now to put it into action!
....
I've tried comparing platform costs but to be honest it's such a minefield of information I end up more confused. TIA for your help :)

Hi iambic,

Myself and my wife, only started private investing this March. We have just one S&S ISA in Mel's name with iWeb. This seemed (we think!) to be the cheapest option for us.

Mel set it up and she's usually pretty strict about getting the cheapest deal :lol: . As far as I can recollect we paid £25 as an initial opening fee, for the ISA, and each year the ISA can be renewed without paying this £25 again. It costs £5 per trade (sell, buy) of any instrument. To buy standalone bonds you have to phone them up, but it's still £5 for the call+transaction - this is a lot cheaper than the others. The only thing on top of this is the 0.5% stamp duty on most equities and any fund OCFs. There is no additional platform fee - or if there was they must have very sneaky to get it past my wife!!

The only bad points, in our minds, is that standalone bonds are badly supported. You can buy a limited subset of those which trade in the UK, but you have to do research on other parts of the WWW (iWeb offers no "search eligible bonds" option) , then you have to ring them (free) and check whether they will let you buy that instrument.

Automatic dividend reinvestment is also pretty cheap, I *think* they just charge 0.5% of the total reinvested, though don't quote me on that one!

HTH
Matt

iambic
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Re: Managing (or avoiding) multiple S&S ISA accounts

#175504

Postby iambic » October 22nd, 2018, 1:07 pm

RececaDron wrote:
iambic wrote:an ISA with Vanguard
an ISA with Fidelity (via Cavendish Online)
my Fidelity ISA
each only pay into one S&S ISA per year,
multiple S&S ISAs


Lots of ISAs.

What about pensions? Do you have the pension bases already covered?


We've only got 2 ISA's between us at the moment & not looking to add any more unless there's a good reason to. We've both got company pensions & I have a SIPP so think we're all good on that front for now :)

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Re: Managing (or avoiding) multiple S&S ISA accounts

#175507

Postby iambic » October 22nd, 2018, 1:12 pm

Urbandreamer wrote:I don't see an "issue" with having multiplt S&S ISA's. I have 3 myself.
My wife has a couple and loads of cash ones.

Mine are:
A J Bell
Selftrade
Pilling & co


Each is "good"* and allows a wide range of investments. I have everything from Shell through to an AIM quoted medical scanner company and a few Investment trusts in them.

One thing to be aware of is that each will charge a fee. As others have said, you need to look at those fees and decide if you are happy paying them and paying multiple fees. If you are then there really isn't an issue is there? Keep an eye on the fees though, they can become a real drain.

...

Be carefull with the passive route though, it's more difficult than you think. For example your attempt to "diversify" may just produce something like an index tracker or diversified investment trust with multiple fees!

...


Thanks for the information :) The only reason I'm keen to avoid having more than one S&S ISA each is that we'll each only be able to add money to one ISA per year, so I wonder if rebalancing if things get out of kilter might be tricky. I guess if I can avoid tinkering & leave one of them well alone for a year that shouldn't be an issue though!

Do you happen to know whether selling & repurchasing shares within an ISA will not affect the yearly limit & that it's just adding additional money that is restricted to the £20k per person?

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Re: Managing (or avoiding) multiple S&S ISA accounts

#175509

Postby iambic » October 22nd, 2018, 1:15 pm

xeny wrote:
You've presumably looked at http://monevator.com/compare-uk-cheapes ... e-brokers/ ?

In general if you're in the accumulation stage of chasing FI/RE you probably want capital growth more than yield, so a HYP may not be a good fit for your current goals?


Yep we're in (the very early!) stages of accumulation & I'm not sure if a HYP is right for us yet, but I'm interested in learning more & like the idea of generating some income from dividends. I'm taking it slowly though as preserving capital & understanding what we're investing in is our main aim right now, so have only gone as far as passive funds so far :)

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Re: Managing (or avoiding) multiple S&S ISA accounts

#175511

Postby iambic » October 22nd, 2018, 1:20 pm

TheMotorcycleBoy wrote:
iambic wrote:Apologies for the total newbie question, but trawling through this forum has given me so much useful insight already that I thought I'd pose the question I've been trying to figure out an answer to, in the hope that you can provide me with some guidance.

My husband & I started on our journey towards financial independence at the start of 2018 & after tons of reading, we settled on a portfolio that looks reasonably diversified & that we're happy with. Now to put it into action!
....
I've tried comparing platform costs but to be honest it's such a minefield of information I end up more confused. TIA for your help :)

Hi iambic,

Myself and my wife, only started private investing this March. We have just one S&S ISA in Mel's name with iWeb. This seemed (we think!) to be the cheapest option for us.

Mel set it up and she's usually pretty strict about getting the cheapest deal :lol: . As far as I can recollect we paid £25 as an initial opening fee, for the ISA, and each year the ISA can be renewed without paying this £25 again. It costs £5 per trade (sell, buy) of any instrument. To buy standalone bonds you have to phone them up, but it's still £5 for the call+transaction - this is a lot cheaper than the others. The only thing on top of this is the 0.5% stamp duty on most equities and any fund OCFs. There is no additional platform fee - or if there was they must have very sneaky to get it past my wife!!

The only bad points, in our minds, is that standalone bonds are badly supported. You can buy a limited subset of those which trade in the UK, but you have to do research on other parts of the WWW (iWeb offers no "search eligible bonds" option) , then you have to ring them (free) and check whether they will let you buy that instrument.

Automatic dividend reinvestment is also pretty cheap, I *think* they just charge 0.5% of the total reinvested, though don't quote me on that one!

HTH
Matt


Thanks Matt, that's really helpful info. We're keen to save on fees as I've read how big an impact they can have over the long term, but understanding exactly what charges will apply can be pretty complex when you're starting out, so it's useful to have a clear explanation :) I've come across iWeb mentioned/recommended a few times so will definitely look into them.

Can I ask if you're buying individual shares, or are you investing in funds as well?


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