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Managing (or avoiding) multiple S&S ISA accounts

Investment discussion for beginners. Why you should invest your money, get help getting started
TheMotorcycleBoy
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Re: Managing (or avoiding) multiple S&S ISA accounts

#175530

Postby TheMotorcycleBoy » October 22nd, 2018, 2:43 pm

iambic wrote: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?

Hello again!

We are investing in individual shares and individual bonds, but we also have a Fidelity World Equity Index tracker fund my wife Mel started a thread off here to discuss it a few months back.

The only instruments (which *might* interest us) which I've not investigated iWeb's level of support of, is "Investment trusts".

We quite like iWeb currently, although have no other experience. Certainly the online share buying and selling parts of the interface are nice and clear, and so are the screens for tracking one's dividend/cash/previous trades etc.

But if you do some research yourself, do keep us informed as to what you uncover.

In my newbie opinion, I think they offer the best value, possibly at the "cost" of less choice of the more esoteric trading options..........but perhaps one of the Lemon Fool gurus out there can confirm or deny that!!

Matt

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

#175548

Postby Alaric » October 22nd, 2018, 4:05 pm

iambic wrote: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?


It's basic stuff that once money is inside the ISA shelter, you can buy and sell regardless. Don't withdraw dividends unless you have to, as this maximises the value sheltered.

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

#175601

Postby Urbandreamer » October 22nd, 2018, 6:40 pm

iambic wrote: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?


Provided that you don't take the money out, then it doesn't affect the £20k contribution limit. In fact in theory even if you do take the money out you should be able to put it back in again without affecting the limit, provided that the ISA is set up to allow that. Most are not set up that way however.

While I try not sell without a good reason I have sold over £10k of shares and used the funds to purchase other shares this financial year, despite having made no contributions to my ISA. My surplus is going into my SIPP rather than my ISA at the moment.

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

#175625

Postby Howard » October 22nd, 2018, 8:06 pm

iambic wrote:
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 :)


Forgive me if this sounds daft advice, but I wouldn’t worry too much about costs at the beginning of your investment journey. And reading books about investment can cause confusion as there are so many “experts” giving different advice - perhaps including me!

However, from my experience, if you are investing for the long term, you have to accept that there are no low-risk strategies apart from keeping your cash in a bank savings account. Assuming you are going to end up investing, say £50,000 in your two ISAs as you see fit over the next few years. I wouldn’t bother with individual investments of less than £2,000 at a time. The reason for this is that if you invest say £500 in a share in a £50,000 portfolio and it is a brilliant investment and trebles in value, you have only gained £1,000 and it will have very little effect on your overall portfolio. So you have to take a few risks. After about 5 years of investing gradually, building a diversified portfolio, and reading opinions on this forum, you are going to know a lot more about your own investing preferences and you will have learnt from some good and bad personal experiences. This will be far more valuable than reading lots of books about theoretical investment processes.

Individual experiences are not statistically valid, but 25 years ago I started by investing in some companies which I thought were good quality and collective investments to give me diversification. I found it very interesting and picked up ideas for additional investments from the business media. Looking back, I wouldn’t have done it any other way. I “lost” a fortune in the crash of 2000 but learnt a lot so my portfolio suffered much less in 2008 and overall the portfolio has gained around 8% a year, so it’s worth 7 times the original investment and is generating significant retirement income.

After you have been investing for some years, it is worth concentrating on the costs as they tend to be more in absolute terms as your portfolio grows. However, my largest investment is in Fundsmith. They charge quite a lot, but to us early investors they have given a return of close to 19% growth per year over the last five years, so we can forgive them a small percentage charge each year.

Very best wishes for success in your investing. If you are sensible and gradually develop a diversified range of investments you will almost certainly not regret starting now. And the Lemon Fool has some brilliant posters who can teach us more than most “experts”.

regards

Howard

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

#175982

Postby iambic » October 24th, 2018, 1:35 pm

Howard wrote:Forgive me if this sounds daft advice, but I wouldn’t worry too much about costs at the beginning of your investment journey. And reading books about investment can cause confusion as there are so many “experts” giving different advice - perhaps including me!

However, from my experience, if you are investing for the long term, you have to accept that there are no low-risk strategies apart from keeping your cash in a bank savings account. Assuming you are going to end up investing, say £50,000 in your two ISAs as you see fit over the next few years. I wouldn’t bother with individual investments of less than £2,000 at a time. The reason for this is that if you invest say £500 in a share in a £50,000 portfolio and it is a brilliant investment and trebles in value, you have only gained £1,000 and it will have very little effect on your overall portfolio. So you have to take a few risks. After about 5 years of investing gradually, building a diversified portfolio, and reading opinions on this forum, you are going to know a lot more about your own investing preferences and you will have learnt from some good and bad personal experiences. This will be far more valuable than reading lots of books about theoretical investment processes.


Thanks very much for the input, Howard. It's really valuable getting advice from experienced folk & I completely agree about reading too much actually leading to more confusion. Every time I think I've got a decent handle on things & come up with an "ideal" list of components for our porfolio, I read someone else's opinion that throws the whole thing into question. We're in the very early days at the moment & I do feel occasionally frozen by indecision about where to put our money because I'm trying to focus on (& understand) minimising fees, reducing risk, diversifying, platforms, picking a rebalancing strategy etc. etc. This does makes me think I'm overcomplicating things a bit (possibly a lot)...

Thank you for the suggestions about the sort of sums that seem sensible to invest in individual shares. So far we've been drip-feeding money in when we get paid each month; which for passive funds seems alright but I realise this would be an expensive way of buying shares so will look at saving up some lump sums before getting into those.

The other thing I've tried to do is diversify right from the beginning - with the wide selection of passive tracker funds available this has seemed quite straightforward, but with individual shares it appears to be harder without a big lump sum to spread amongst several companies. You make a good point about accepting there is no low-risk strategy & learning as we go though; I guess if I can diversify our share-holdings over a few years that may be riskier but will achieve the diversification in the long run & I expect I'll learn better & be less confused if I can have consider just 1 or 2 companies at a time as opposed to 20-odd of them!

I also have some money in Fundsmith, in fact it was the first fund I put any money into. Great to know you've had such good results from it. I've been pleased with the returns so far & think I'll hang onto it, despite the charges.

Congratulations on the success of your portfolio & thanks again for sharing your insights.

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

#175991

Postby TheMotorcycleBoy » October 24th, 2018, 2:21 pm

iambic wrote:We're in the very early days at the moment & I do feel occasionally frozen by indecision about where to put our money because I'm trying to focus on (& understand) minimising fees, reducing risk, diversifying, platforms, picking a rebalancing strategy etc. etc....

In my very newbie opinion, being indecisive is actually an advantage for you! We arguably "jumped" in too soon with one or two of our equity purchases. I don't think we have bought any outright howlers, but I wish we'd spent more time researching individual firms. And especially spent more time on "finding out the right price" to buy.

PS If you ever want to get more into choosing equities by researching their financial details (via their annual reports) I am trying to build some valuation ideas in this board on the forum

But anyway, my very limited advice from one newbie to another is "be patient", we have a whole year to figure out what to spend our ISA entitlement on!!

Matt

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

#177884

Postby jaizan » November 2nd, 2018, 8:12 pm

1 The point about NOT buying about 6 different stocks & paying £60 a month is quite important. If you were saving £2000 a month, it would be more sensible to make 1 trade a month, or even one every 2 months. Over the long term the portfolio will be diversified & you lose a lot less in fees.

2 Also, beware of the recurring fees. 0.5% for holding funds or whatever might not be much now, but when you have £300,000, it will be significant.

3 There are plenty of providers. ii, AJ Bell etc. Check the comparison table at Monevator, or somewhere like that.

4 I have multiple accounts. I had a Halifax ISA and after about 10 years, just locked it so no new contributions are made -it just rolls up. I currently contribute to an ii ISA, plus an AJ Bell Sipp, plus 3 other UK trading accounts. A google sheet keeps track of all this. No problems, although 1 taxed trading account would be enough.

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

#179257

Postby nicster » November 9th, 2018, 5:44 pm

Just to add, Fidelity having been making a lot of changes recently, and you can now buy shares from them (just UK listed).

https://www.fidelity.co.uk/investing/investment-finder

The platform fee % can be bypassed by avoiding funds, and sticking with ITs, ETFs, and now shares. Then the fee is capped at £45 a year. And as others have pointed out its then £10 dealing, so best to invest > £1000.

regards

nicster

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

#179262

Postby doug2500 » November 9th, 2018, 6:02 pm

It's interesting that Fidelity have started because I had an account with them only a few years ago and they closed down their share dealing and transferred me away!

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

#179355

Postby LongWayToGo » November 10th, 2018, 12:16 pm

Just to add another viewpoint, I have multiple accounts with Interactive Investor (SIPP, S&S ISA and 2 x kids ISAs). There is a quarterly platform charge of £22.50 but this covers all your accounts and is credited as trading credits against purchases.

For cheap portfolio building consider the cheap monthly investing option if your provider does it. I make use of the monthly regular investing option for the kids ISAs which I set up for each of them when they were born. It charges only £1 per trade on a fixed day each month, which you don't get to choose (ideal for me as a passive long term investor, I have zero interest in market timing!) I have a regular debit from my bank account each month which pays their child benefit (£80 each) into their ISAs and the regular investment in each is set up to buy £200 of a Vanguard index fund each month. When there is less than £200 cash in their accounts nothing happens (the trade just fails), when it's above £200 (every third month or so) the purchase goes through and so it continues.

Took 10 minutes to set up and has been chugging along merrily with absolutely zero intervention from me for the last few years and is steadily growing into a tidy sum for each of them. Hopefully when they hit 18 and get control of the account it will provide a useful start for university fees/house deposit etc.

LWTG

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

#179464

Postby Bouleversee » November 11th, 2018, 12:16 pm

iambic wrote:
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?


You could always alternate the annual ISA allowance (or change it as necessary for rebalancing purposes) between providers.

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

#179486

Postby 77ss » November 11th, 2018, 3:05 pm

iambic wrote:
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.


Think of charges as a %age of your investment.

I am reluctant to pay over 1%. You can't in general, on shares and ITs, avoid the 0.5% stamp duty, so I keep my dealing charge to no more than 0.5% of my investment.

With iWeb's £5 fee, I will happily buy amounts as low as £1,000, whereas with a £10 dealing charge I wait until I have £2000 to invest.

Clearly, if you have a large sum to tuck away, initial dealing charges are, as another poster has pointed out, small change.

In the long term, I wouldn't worry too much about having your ISAs with more than one broker. There is an element of added security which, in view, warants the slight extra effort involved in having your holdings with more than one broker. You may also find that different brokers have different stengths.

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

#179524

Postby Urbandreamer » November 11th, 2018, 6:22 pm

77ss wrote:Think of charges as a %age of your investment.

I am reluctant to pay over 1%. You can't in general, on shares and ITs, avoid the 0.5% stamp duty, so I keep my dealing charge to no more than 0.5% of my investment.

With iWeb's £5 fee, I will happily buy amounts as low as £1,000, whereas with a £10 dealing charge I wait until I have £2000 to invest.


A J Bell (and probably others) have a "regular" investor cheap deal. Provided that you are happy that your deal will take place on the day that they choose (allowing them to combine your purchase with other peoples), they charge £1.50 commission. That reduces your minimum to £300.

Although it's described as a "regular" investment you can cancel or change your choice at any time upto a couple of days before the trade.

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

#179625

Postby iambic » November 12th, 2018, 9:18 am

Urbandreamer wrote:
77ss wrote:Think of charges as a %age of your investment.

I am reluctant to pay over 1%. You can't in general, on shares and ITs, avoid the 0.5% stamp duty, so I keep my dealing charge to no more than 0.5% of my investment.

With iWeb's £5 fee, I will happily buy amounts as low as £1,000, whereas with a £10 dealing charge I wait until I have £2000 to invest.


A J Bell (and probably others) have a "regular" investor cheap deal. Provided that you are happy that your deal will take place on the day that they choose (allowing them to combine your purchase with other peoples), they charge £1.50 commission. That reduces your minimum to £300.

Although it's described as a "regular" investment you can cancel or change your choice at any time upto a couple of days before the trade.


I've seen the regular investor discount on a couple of platforms that I've looked at & I'm trying to understand exactly what it means. To count as a "regular" investor, do you need to make a certain number of trades every month, or do you have to have a direct debit set up to transfer money in & a buy order set up with the platform?

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

#179656

Postby Urbandreamer » November 12th, 2018, 10:37 am

iambic wrote:I've seen the regular investor discount on a couple of platforms that I've looked at & I'm trying to understand exactly what it means. To count as a "regular" investor, do you need to make a certain number of trades every month, or do you have to have a direct debit set up to transfer money in & a buy order set up with the platform?


I think that it very much depends upon the platform.

Here is my experience of A J Bell.

It may be intended for people who invest "regularly", but doesn't have to be used that way.
If you wished to regularly invest £500pcm into a tracker then you would set up a regular deposit and a regular investment (two seperate operations).

Alternatively you can elect to set up a "regular" investment to invest £3241 into a given share, wait until the shares are purchased then cancel the "regular" investment, change the amount or what you intend purchasing. It's a calm cheap way of buying as long as you think that you can't time the market. I often use the "regular" investment method but given that what I invest in changes every month I would not really describe it as regular. The investment amount goes up after I have recieved dividends and falls after that months investment. My daughter has used it once, hardly regular!

What you can invest in this way is restricted to popular investments. It's simply a way of reducing costs by agregating buy requests from a number of investors.

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

#179661

Postby iambic » November 12th, 2018, 10:49 am

Urbandreamer wrote:
iambic wrote:I've seen the regular investor discount on a couple of platforms that I've looked at & I'm trying to understand exactly what it means. To count as a "regular" investor, do you need to make a certain number of trades every month, or do you have to have a direct debit set up to transfer money in & a buy order set up with the platform?


I think that it very much depends upon the platform.

Here is my experience of A J Bell.

It may be intended for people who invest "regularly", but doesn't have to be used that way.
If you wished to regularly invest £500pcm into a tracker then you would set up a regular deposit and a regular investment (two seperate operations).

Alternatively you can elect to set up a "regular" investment to invest £3241 into a given share, wait until the shares are purchased then cancel the "regular" investment, change the amount or what you intend purchasing. It's a calm cheap way of buying as long as you think that you can't time the market. I often use the "regular" investment method but given that what I invest in changes every month I would not really describe it as regular. The investment amount goes up after I have recieved dividends and falls after that months investment. My daughter has used it once, hardly regular!

What you can invest in this way is restricted to popular investments. It's simply a way of reducing costs by agregating buy requests from a number of investors.


Thanks UrbanDreamer, that's helpful. I find even when a platform boasts about how transparent its fee structure is, it's still complex to work out exactly what that translates to in £££ as I don't always know what they mean by terminology like "regular" investments etc. At the moment the amount I invest & what I buy changes every month & I tend to drip feed in small amounts, so Fidelity (via Cavendish so the platform fee is reduced to 0.25%) suits me as I'm only buying funds which don't incur a transaction fee, but I think if I start expanding into buying ETF's & shares they will be pretty expensive (£10 per trade), so it's useful to understand how other people use different platforms. Also I think saving up so that any transaction fee that is incurred is a smaller % of the total invested (as suggested by several posters) sounds sensible.


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