What's the best way to buy a portfolio of Investment Trusts with a lump sum?

[fisher]

I'm considering buying a basket of Investment Trusts for my mother who's finances need re-organising. Each purchase will be a one off lump sum rather than a regular monthly purchase.

I'm thinking I just open two or three stock & shares trading accounts in her name and purchase the shares directly. I already have accounts with TD Direct, X-O, IGG & youinvest for myself, so I'm thinking I just open some for her (some will be ISA transfers to stocks & shares ISAs) and buy the IT shares directly. Is this the best way or is there a better alternative when buying Investment Trusts?

Any advice would be appreciated.

[swill453]

I'm thinking I just open two or three stock & shares trading accounts in her name

What's your reasoning behind using multiple accounts? If it was me I'd just use one broker (ISA and dealing account at same broker).

Scott.

[fisher]

I'm thinking I just open two or three stock & shares trading accounts in her name

What's your reasoning behind using multiple accounts? If it was me I'd just use one broker (ISA and dealing account at same broker).

Scott.

She'll be relying on the income from these trusts for a good part of her overall income. With only one account there is too much risk for me. If something untoward happens (e.g. the broker goes bust) the assets themselves should be relatively safe being in nominee, but they could be inaccessible for a good number of months and that would not be acceptable for the whole portfolio so it is better split into smaller chunks across multiple brokers. I have 3 different accounts that I use for my own investments for the same reason.

[Nocton]

I think you are being over cautious and will just give yourself extra admin hassle (and costs). All reputable brokers have separate accounts for a client's money and as far as I know no one has ever lost any investments/money.

If there is a reasonable amount of money involved then I would suggest making the investments over several months - at least 6 if not 12 - to avoid buying at a high price. I think at the moment it is particularly uncertain how the markets will move in the next year.

[gordowalo2]

Decide what Investment Trusts you want to buy. Then check the website of each Investment Trust to see if it or its host company has its own no cost or low cost in-house savings scheme or a similar arrangement with a third party; examples include Baillie Gifford, Foreign & Colonial and Manchester & London. If you want to buy Investment Trusts that have no such in-house or similar arrangements, look at Hargreaves Lansdown.

[mc2fool]

I think you are being over cautious and will just give yourself extra admin hassle (and costs). All reputable brokers have separate accounts for a client's money and as far as I know no one has ever lost any investments/money.

Actually some have (viewtopic.php?t=2092#p19189), and it's not simply a case of separate accounts but a matter of being able to align them with the investors' holdings.

But, as fisher says, while the chance of loss is small, another risk with the all eggs in one basket approach is that of extended inaccessibility -- you know, like RBS/NatWest/Ulster Bank customers suffered for several weeks when they had an IT meltdown not so long ago. I'll bet a lot of those now have two (or more) current accounts....

[fisher]

Decide what Investment Trusts you want to buy. Then check the website of each Investment Trust to see if it or its host company has its own no cost or low cost in-house savings scheme or a similar arrangement with a third party; examples include Baillie Gifford, Foreign & Colonial and Manchester & London. If you want to buy Investment Trusts that have no such in-house or similar arrangements, look at Hargreaves Lansdown.

Thanks for taking time to reply.

What advantage is there to using an in-house savings scheme given each Investment Trust purchase will be a one off lump sum? Is there any? The disadvantage would be having to deal with yet another administrator.
Why do you recommend Hargreaves Lansdown specifically over any other Broker?

[scotia]

Why do you recommend Hargreaves Lansdown specifically over any other Broker?

I think that you will find that many investors think highly of Hargreaves Lansdown. Their web site is excellent with powerful tools to compare shares, funds and ITs. They are an extremely large organisation - which provides some confidence in their probable longevity. Some may feel that their charges are on the high side, particularly for Unit Trusts and OEICs, however in my experience their service is excellent.
I retain (historical) accounts with two other major brokers, but all new investments are made with Hargreaves Lansdown.

[tjh290633]

Thanks for taking time to reply.

What advantage is there to using an in-house savings scheme given each Investment Trust purchase will be a one off lump sum? Is there any? The disadvantage would be having to deal with yet another administrator.
Why do you recommend Hargreaves Lansdown specifically over any other Broker?

The downside is that you may be very limited in the investments you make in any one account, except for the Alliance Trust Savings schemes.

TJH

[gordowalo2]

Decide what Investment Trusts you want to buy. Then check the website of each Investment Trust to see if it or its host company has its own no cost or low cost in-house savings scheme or a similar arrangement with a third party; examples include Baillie Gifford, Foreign & Colonial and Manchester & London. If you want to buy Investment Trusts that have no such in-house or similar arrangements, look at Hargreaves Lansdown.

Thanks for taking time to reply.

What advantage is there to using an in-house savings scheme given each Investment Trust purchase will be a one off lump sum? Is there any? The disadvantage would be having to deal with yet another administrator.
Why do you recommend Hargreaves Lansdown specifically over any other Broker?

Greetings fisher.
The main advantage of using in-house schemes is that the risk of default or other difficulty is spread, usually at low cost. A secondary advantage is that the investment house has you in its records, so you get information direct and, if appropriate to you, easy and cheap switching between their ITs and typically free use of their documentation, e.g. F&C's trusts. A savings scheme often will accommodate a one-off payment in, although it will equally accept a lump sum that is drip-fed in over, say, twelve months, if it happens that you don't want to commit all capital in one go.
As for why Hargreaves Lansdown (HL): (a) there is no annual fee to hold ITs in HL's fund and share account, (b) HL's fee for holding ITs in an ISA is capped at £45pa, (c) HL's dealing commission is reasonable, (d) HL's website usually works well - it's intended for retail investors. Of course, charges and all these things can change, but so they can with any broker. I comment on the current situation as it is now in my experience of using a number of platforms, including HL.
I hope that this helps.

[tjh290633]

As for why Hargreaves Lansdown (HL): (a) there is no annual fee to hold ITs in HL's fund and share account, (b) HL's fee for holding ITs in an ISA is capped at £45pa, (c) HL's dealing commission is reasonable, (d) HL's website usually works well - it's intended for retail investors. Of course, charges and all these things can change, but so they can with any broker. I comment on the current situation as it is now in my experience of using a number of platforms, including HL.
I hope that this helps.

Don't (a) and (b) contradict each other? I believe that (b) is correct, but only from hearsay evidence.

TJH

[Raptor]

As for why Hargreaves Lansdown (HL): (a) there is no annual fee to hold ITs in HL's fund and share account, (b) HL's fee for holding ITs in an ISA is capped at £45pa, (c) HL's dealing commission is reasonable, (d) HL's website usually works well - it's intended for retail investors. Of course, charges and all these things can change, but so they can with any broker. I comment on the current situation as it is now in my experience of using a number of platforms, including HL.
I hope that this helps.

Don't (a) and (b) contradict each other? I believe that (b) is correct, but only from hearsay evidence.

TJH

FAQ ISA management charges. Cost for holding IT's in ISA is .45% capped at £45
FAQ Fund & Shares Account No charges.

TJH I think there confusion is that these are 2 seperate types of accounts and the charges differ.

Raptor.

[fisher]

Greetings fisher.
The main advantage of using in-house schemes is that the risk of default or other difficulty is spread, usually at low cost. A secondary advantage is that the investment house has you in its records, so you get information direct and, if appropriate to you, easy and cheap switching between their ITs and typically free use of their documentation, e.g. F&C's trusts. A savings scheme often will accommodate a one-off payment in, although it will equally accept a lump sum that is drip-fed in over, say, twelve months, if it happens that you don't want to commit all capital in one go.
As for why Hargreaves Lansdown (HL): (a) there is no annual fee to hold ITs in HL's fund and share account, (b) HL's fee for holding ITs in an ISA is capped at £45pa, (c) HL's dealing commission is reasonable, (d) HL's website usually works well - it's intended for retail investors. Of course, charges and all these things can change, but so they can with any broker. I comment on the current situation as it is now in my experience of using a number of platforms, including HL.
I hope that this helps.

Thanks for the information. I baulk a bit with a £45 annual charge when I can use www.X-O.co.uk with no annual charge and I don't think I would get a any real benefit from using HL - I don't need anything other than a simple share buying service, but I can see why others may like some of the research tools they offer.

[tjh290633]

FAQ ISA management charges. Cost for holding IT's in ISA is .45% capped at £45
FAQ Fund & Shares Account No charges.

TJH I think there confusion is that these are 2 seperate types of accounts and the charges differ.

Raptor.

Ah, this is different from mine where there is no charge for an account outside an ISA if you also hold an ISA.

TJH

[djbw]

No suggestion of iWeb? There will be no platform fee for holding ITs i.e. no ongoing costs after the £25 opening fee and £5 commissions for purchases.

[toofast2live]

HL, £45 ISA charge and no charge outside ISA is a bargain for IT holdings given level of service and quality of website. Were you into funds I would avoid them like thte plague as 0.45% per annum is an outrage!

And If you reckon HL is going to go out of business or freeze your accounts necessitating alternative brokers, you might as well head for the hills with a rifle and tins of baked beans

If you must use 3 or 4 brokers do so and then after a few years decide on whether its right or wrong to amalgamate. I took the decision to go with HL, simplifying everything for me and my wife as we age. HL pay suficient in transfer remuneration to offset transfer charges by the existing broker.

But, hey, each to their own and good luck.

[fisher]

If you must use 3 or 4 brokers do so and then after a few years decide on whether its right or wrong to amalgamate. I took the decision to go with HL, simplifying everything for me and my wife as we age. HL pay suficient in transfer remuneration to offset transfer charges by the existing broker.

Not quite sure where this is coming from. I currently use 3 brokers as I mentioned in my original post. I've had a least two brokers for more than 20 years and I am quite happy keeping things spread over more than one broker. It is not difficult to manage assets across multiple brokers and I feel happier doing it that way.

[Kantwebefriends]

Decide what Investment Trusts you want to buy. Then check the website of each Investment Trust to see if it or its host company has its own no cost or low cost in-house savings scheme or a similar arrangement with a third party; examples include Baillie Gifford, Foreign & Colonial and Manchester & London. If you want to buy Investment Trusts that have no such in-house or similar arrangements, look at Hargreaves Lansdown.

There's a useful list here. Scroll down to p42.

http://www.theaic.co.uk/sites/default/f ... 8Feb17.pdf

[Bouleversee]

"Decide what Investment Trusts you want to buy". At, there's the rub. Where to start? My daughter, who has no investment experience, has just put a substantial sum into a SIPP for the first time and knowing she will not have time or knowledge to select and manage individual share holdings, I have suggested Investment Trusts but deciding which is almost as difficult as choosing shares. The ones bought so far are Scottish Mortgage and Witan. City of London, Monks, Foreign & Colonial and RIT Capital Partners are on her list to buy. How many holdings should she have and are these good choices or are there better suggestions? I'm thinking of switching some of my own shares into ITs as I haven't the time to keep track of them and would like to reduce the number of holdings so will be equally interested in any replies.

[Minesadouble]

I did the very same thing for my elderly MIL two years ago.
I opened a regular Share Account and an ISA, both with Hargreaves Lansdown.
I bought a portfolio of ITs focussed on Income.
I've used Bed and ISA each April 6th to move monies from the Share Account into the ISA shelter.
All has worked smoothly, at least so far

MAD