UKH

Not looking for investment advice as such, rather if someone could recommend, or just name, some companies / websites that let you invest a small monthly sum into a stocks and shares isa - to some straight-forward fund. I've been wanting to start doing this since forever but always been intimidated by a) the number of websites that do it (e.g. from as simple as Natwest to specific investment brokers); and b) the huge number of funds etc. out there.

I completely understand the risks and the concepts but just want to know the simple logistics of which companies to go with and which funds could be considered a 'straight-forward' or popular option. I know past performance doesn't indicate future etc. etc. etc.

I use hargreaves lansdowne.  Made a couple of block purchases of specific shares (I bought some RBS and Lloyds when they tanked and have had a nice bit of growth over the years...then bought some absolute turkeys which lost some value...but they;re long term investments, so I don;t care).

I've then bought a couple of they type of fund you;re talking about...I drip feed in £50 a month to a couple of unit trusts from the ones the manage / mention.

Happy to bounce more info your way, but don;t expect any real knowledge.  I'm very much a "throw a dart at a newspaper" type of investor...

I've heard of them - good start!

So looking at it I guess the important figures are:

-0.45% annual fee - seems good, or at least clear - Natwest have three separate charges for theirs but not really clear if these add up to more or less than HL.

-no fee for regularly monthly deposits to funds, which is exactly what I want to do.

I suppose my only other question would be - how did you go about picking your fund? Do HL have like a catalogue of most popular / successful funds or something? 

That's probably all I would think to look at I guess.... I'm 31 so think I would go for something higher risk as I'd be looking to build a pot over the next 20 years or so

Edit: just seen that there is a most popular funds list - and that they have both entry fee %'s and annual fee %s for each fund, I guess this is something to consider. 4.5% entry fee!? seems steep if you might only make 7% a year or actually lose money in a bad year!

Vanguard LifeStrategy funds are worth looking at and are generally very well reviewed. They are simple passive funds with a good portfolio spread and low fees (the OCF is 0.22%). There are various options depending on how much exposure to shares you want, if you want more risk and possibly more return go for the 100% option. 

H.L probably your best bet for a small monthly I would think. 

Some quite useful guidance on Martin Lewis's website on investment ISAs - he describes the pros and cons of most of the majors, including HL, Nutmeg and so on.  A useful feature is it also differentiates the sites by ease of use for trading and fees, so will say 'such and such is best for regular monthly trading' or whatever

It's a bit random but you could look at shareholder benefits as well.  For example some pub/restaurant chains give you 20% off your meals which is nice.   

I have accounts with iweb, HnL and nest. Nest is by far the most simple but the fees are crazy high for what you get (2%, this is alot). HnL have the best platform by far but again their fees are high if you look into it. Iweb is really good for lump sum investments so I tend to hold all my vanguard funds there. It's a fiver a deal and then what ever the ongoing fund fee is. I think vanguard now offer theirs direct and if you are gonna invest in their funds then I'd defo look at that as for drip feed I think it works out cheaper than iweb.

There's a range of companies offering similar stuff.  The choice is mainly price-driven.

Costs are in three groups:

- Account fees.  Either a flat amount per quarter or a percentage.

- Trading costs.  Either a flat fee or a capped percentage.

- Fund fees (if you buy funds).  Almost always a percentage.

If you have a small amount overall (say <£100k) then the percentage account fees look better.  When you have more, then the fixed fee wins.  A search will show you the top 20 and where the tipping point is.

Trading.  Don't.  Day traders don't win.  It might be better to save your monthly investment and purchase once a quarter.  Think of the cost of trade (and stamp duty) as a percentage.  If it's more than 1% you might think about waiting and pooling.

Fund fees are the hidden differentiator.  A FTSE tracker can cost 1% a year or 0.06%.  This is the single biggest difference between funds.  Obviously this is irrelevant if you're picking stocks (but see the odds on "Trading", above).

FWIW I use interactive Investor (switched from iWeb).  I only buy indices and with geographic spread.  I don't stock pick or trade and I choose funds with minimal charges.  That is still a fairly "adventurous" approach.  I wrote a script to download the entire funds database and sorted by charges and then picked broad trackers with good mechanics and dividend reinvestment.  The only thing I would like is to be able to rebalance a little (for example the FTSE is skewed overly to the top 20 companies), but that's easily addressed by buying some 250 or other indices.

Having said that 100% of trackers underperform the market - but only by a little bit.  75% of managed funds underperform, on average by much more and the charges are 10x.

They do have a list of their favourite funds:

https://www.hl.co.uk/funds/help-choosing-funds/wealth-50

Though you could also consider a simple tracker. 

Are you sure?  I didn't think they did that these days. You should be able to get funds without any entry fee (though there is the yearly management fee that the fund charges, and there is the "platform fee" payable to HL or whoever you deal with.  These together will usually add up to between 0.6% and 1.5%, with the trackers being the cheapest. 

Ball park how much a month are you looking at. 

For example £50 a month is small beer. 

Depending on your existing pension plans you are probably better shovelling it into a pension fund and getting the tax relief. 

Regarding fees, 0.5%,or whatever, sounds trivial. If you think of it as a percentage of your income, however, it suddenly becomes huge.

E.g. if you have £1000, a 0.5% fee is £5 which sounds small. 

By contrast, if you assume a return of 5% (=£50) which is really what you are "buying", the fee becomes 10% of this, which is huge. 

I agree.  The 3500 funds on II range from 0.05% to over 3% (yes 3%!)

This is the mistake I made when I first got into it years ago. Thinking charges like 2% weren't massive, but when you take into account you may only be getting 5% back, it's nearly half your return! This is why I ended up switching to low fee passive funds then eventually to Vanguards platform as they had a decent portfolio spread, lower fees and generally took the faff out of it for me.

Good point. Foor example Legal & General offer decent discounts on all sorts of insurance for holding a single share.

I use Vanguard; the fees are very low. Fidelity have some zero fee stuff available so look into that (off the top of my head their S&p500 tracker is zero fee). A friend uses Wealthify, think they have been active in the states for some time but are new this side of the pond.

Another +1 for Vanguard, just find it pretty straight forward and relatively cheap fees

I found the M&G website easier to navigate than some others when I was looking for a Stocks and Shares ISA fund:

https://www.mandg.co.uk/investor/fund-prices-performance/funds-by-asset-cla...

Another vote for Vanguard

I've been using Scottish Widows for a stocks and shares ISA for years.  I'm not knowledgeable in this area but it seems to work quite well and I've not had any reason to be unhappy.  However, I've not compared it to others mentioned in this thread so I could be getting the worst deal ever - or the best one!

I'm looking into S&S ISAs right now too (been researching for quite some time actually), and Vanguard are at the top of my list. Will probably sink a lot into the LifeStrategy funds, with a bit elsewhere for diversification (although the LS fund is quite well diversified already, i'm investing in other funds mainly to suit my personal preference for diversification amounts in specific areas - there's nothing wrong with the LS diversification per se).

Well, all, thanks for all the tips! I actually just dove straight in and got an ISA with HL before I saw 90% of these comments though! I ended up going for a global equities fund which has had very good returns for the last 5 years, the 4.5% entry fee thing I misread because I didn't notice that HL then have some favourable thing below it (so the overall entry fee was 0) I think the on going fee might have been 0.6% or something?

Certainly at my level the % fees are better, I'll only be putting a £100 or so in when I can - but obviously if you have £100k then 0.45% annual fee is £450 so much worse than a one off £25 charge!

From what I understand having spoken to someone from HL on the phone, it's trivial and free to switch from one fund to another so I think I'll just stick with the fund I've picked for a year or two, or more if it's going well, perhaps get into some others at a later date.

I like the idea of low fee geographically diverse funds!

Another vote for HL, which is where I hold all of my (individual share) portfolio now (still have various other funds scattered around, but I've even moved some of them on to the HL platform for ease). You didn't ask for investment advice, so I won't give any, but I will just point out that (a) there is a weight of research suggesting that actively managed funds on average don't outperform passive ones in the longer term; and (b) as a "sophisticated investor" (that's a technical term, not me blowing my own trumpet) and ex-City person I *don't* have any active funds other than where I know the fund manager personally (Terry Smith being a good example). Luckily I don't know Neil Woodford (though I have met him)!

Looks like there's lots of good advice already here. When I looked at this a couple of years ago I ended up with Moneyfarm which I'm pretty happy with. Worth a look.