Interactive Investor v Hargreaves Lansdown, Vanguard

[maggiethecat]

I am going to invest in a s&s ISA before the deadline coming up and want to invest into a fund rather than self selecting shares.

I am thinking of II, which although not the cheapest of the three that have caught my eye, appears to offer quite a number of funds. Although it's likely that I won't actively manage at the outset, I'd like the option of being able to do so later.

Can anyone tell me of their experience of II?

Depends how much money you have to invest. Depends on the fund(s). Generally I would choose the fund first, then see which platforms have that fund, then compare the cost.

Interactive Investor I feel is good if you have over £100k... might be ok at a bit under that but if you only have £2k then I think their fees are going to be high. This is due to being a fixed fee provider, not a percentage based. Sorry, no experience of using them.

Vanguard Investor is low cost but has a limited selection of funds, they don't even offer all the Vanguard funds available. However they offer the funds that people tend to use... like FTSE Global All Cap, LifeStrategy range, Target Date range. Percentage based platform, so good for low amounts. Personally though I have stayed with them even though I know Interactive Investor would now be a little cheaper for me. I have communicated with Vanguard Investor support a few times and I like their customer service.

Hargreaves Lansdown - not all that cheap but they offer a lot of funds (OEICs and ETFs) and shares. They also have lots of wrappers... including Lifetime ISA. They have a great app, great website.

I had an account there for a couple of years before moving to Vanguard Investor. Great place to start out if you have not decided on an investment strategy as you can pick funds, switch to others really easily. The 0.45% platform fee though is higher than Vanguard Investor (who have a 0.15% platform fee) so if you decide to go the Vanguard funds route, then it's cheaper to go direct when your investment is quite small.

Sorry that did not answer your question specifically as I have not used II but I have used the other two, so if you are still on the fence about which platform to use I hope the above is of some help.

Nannynick that is very helpful!

I'm still trying to choose a platform with only a day or 2 to go. I see that Vanguard has a platform fee of 0.15% which would be £30 if I invest full £20k allowance while II would be £120. However I take your point about Vanguard's offering being limited.

I do like fact that Hargreaves also have wider offering although I'd pay £90 platform fee. Their information is well presented/fairly easy to follow.

All this said, the platform fee is only one element and from a table I looked at it appears that Hargreaves fund fees may be on the higher end.

For going forward for the next tax year I am considering whether to pay monthly and drip feed or pay lump sum? Do you have any view on this and the balancing effect of regular payments?

HL has some discounts on funds which other platforms do not... an example is some of the Legal & General funds.
HL has the same OCF of 0.22% on Vanguard Lifestrategy 80% as Vanguard Investor has and I would imagine that will be the case for all the Vanguard funds as they don't seem to give other platforms discounts.

Lump sum is mathematically best but very hard to actually do mentally, as putting in £20k and seeing it drop in value is disheartening. Drip Feeding / Dollar Cost Averaging is therefore something that your brain may feel is better... you realise that when the market is down, you buy more units in the fund, so it's like the fund is on sale. Another advantage is that you can automate it, so it becomes just like another regular monthly bill (though good practice to review it every now and then, maybe every 3 months, every 6 months, to increase it to push you up to the max) - not an issue for you right now but might be going forward.

Try to avoid tinkering. Set up something and leave it alone, let it do it's thing and review it occasionally.

I think you need to decide on your investment strategy... which fund(s) you will invest in. Once you have decided that, then that along with if you will do monthly or lump sum, will result in you knowing which platform to use.

Keep in mind that some funds are Funds Of Funds. Vanguard Lifestrategy, BlackRock MyMap, BlackRock Consensus. These can give good global exposure within just one fund, which can help keep dealing costs low.

There are various articles about Dollar Cost Averaging. You may want to read this from JL Collins: jlcollinsnh.com/2014/11/12/stocks-part-xxvii-why-i-dont-like-dollar-cost-averaging/ He does not like it as Time In The Market is what gets the results, not market timing even if timed by calendar date.

@nannynick
I'm leaning toward a low-moderate risk active fund and I quite like the idea of drip feeding - despite the article!

Thank you - you've cleared some of the brain fog. I'm going to have a grand time spending tomorrow!

There is a fund fee as well as platform fee on vanguard- mine is 0.22% on top of the 0.15%- but this is still far lower than all the other providers as far as I can tell, for the amount I'm investing.
Halifax have tripled the charges on their account this year, for some reason.

@LostInTime
Thanks - I realise I have to keep an eye on the various fund fees, in addition to platform fee. Depending on level of management these look to vary greatly.

Will be conservative to start so hope to avoid hefty charges!

What did you decide to go with in the end?