6 years tracking...change platform? Mikedz

#1
I opened an FTSE 100 Uk Index tracking ISA at the beginning of 2011 and have been contributing monthly since then.



It's only now that I have given any thought to what the charges are since the value is now quite significant. I cannot recall what the charges were when I opened it but it is now 0.82% OCR.



This is quite high is it not for a UK 100 index tracker? Should I transfer to a cheaper platform and is there any benefit from staying with L&G or should I be looking purely at the charges?

#2



I opened an FTSE 100 Uk Index tracking ISA at the beginning of 2011 and have been contributing monthly since then.



It's only now that I have given any thought to what the charges are since the value is now quite significant. I cannot recall what the charges were when I opened it but it is now 0.82% OCR.



This is quite high is it not for a UK 100 index tracker? Should I transfer to a cheaper platform and is there any benefit from staying with L&G or should I be looking purely at the charges?
Originally posted by Mikedz


An ISA does not track an index. It's just a wrapper.

There's a platform charge and a fund charge.

It would only be valid to move to a different platform due to costs if the platform charge is too high. But your figure quoted is not clear as to which charge it is for.



Also FTSE 100 is a bad way to invest, others can reply more about that.



So:



1. Who's your platform?

2. What's the platform fee?

3. What fund are you invested in that's tracking the FTSE 100 index?

4. What is the fund fee?



If these questions are confusing, it suggests you are new to investing (especially since you seem to be mixing up terminology) and you may want to do further reading.





As an example, in my first year of investing in a S&S ISA, I was with Fidelity (so, they were my platform), which had an annual charge of 0.35% (at the time) and one of the funds I had with them was Fidelity Index UK Fund P-Acc which had an annual charge of 0.06%, so in total it was 0.41% annually.



If the platform fee for you is too high, you can think about moving to a different platform (and there's a spreadsheet that can help, once you report back), or if the fund's chage is too high, but platform isn't, you can perhaps find an equivalent fund with a lower charge.

#3



I opened an FTSE 100 Uk Index tracking ISA at the beginning of 2011 and have been contributing monthly since then.


Single sector investing is bad investing. What made you pick one of the consistently worse performing indexes in the world for over 20 years to track?






It's only now that I have given any thought to what the charges are since the value is now quite significant. I cannot recall what the charges were when I opened it but it is now 0.82% OCR.


You are focusing on charges. Yet the most important thing is the investments. You should look at those as that is where the real problem is.

#4
I echo the sentiments that having all your money tied up in a FTSE 100 tracker is a terrible choice, the UK only represents a single digit proportion of the global stock market.



To answer your original question, your fees are very high for a simple fund that tracks this index, you should be able to get this down to 0.30% or so *if* you stick with the FTSE 100 (don't do this!)

#5



I opened an FTSE 100 Uk Index tracking ISA at the beginning of 2011 and have been contributing monthly since then.



It's only now that I have given any thought to what the charges are since the value is now quite significant. I cannot recall what the charges were when I opened it but it is now 0.82% OCR.



This is quite high is it not for a UK 100 index tracker? Should I transfer to a cheaper platform and is there any benefit from staying with L&G or should I be looking purely at the charges?
Originally posted by Mikedz


So I'd guess you are up around 25%. And most of that in the last year solely due to Brexit. Whereas any average even medium performing general fund would be up anywhere from 50-100% over that time period. You'd have done better with regular savings in any number of current accounts, and with zero risk as well.



So it was a very poor choice of investment. Why did you choose it?



As Dunston says choose something better and focus on the charges as a secondary function.

#6



So it was a very poor choice of investment. Why did you choose it?

As Dunston says choose something better and focus on the charges as a secondary function.
Originally posted by AnotherJoe


I picked this statement to reply to but I think it applies to a few of them above.

I think it's a bit unfair to the OP to focus so much on the FTSE100 being a bad investment decision and their reasons. Many providers sell those investments on the basis being a good starting point and it's always the index mentioned on the news so new investors may not know any better or realise that they are so limited geographically - I know that would have applied to me 20+ years ago.





OP - the cheapest tracker funds are priced at around 0.06% AMC and you can get that on a platform like Fidelity that charges 0.25% platform fee so a total of 0.31%. But before you do that I'd suggest a bit of reading at www.monevator.com to learn some more about options.

#7



I picked this statement to reply to but I think it applies to a few of them above.

I think it's a bit unfair to the OP to focus so much on the FTSE100 being a bad investment decision and their reasons. Many providers sell those investments on the basis being a good starting point and it's always the index mentioned on the news so new investors may not know any better or realise that they are so limited geographically - I know that would have applied to me 20+ years ago.





OP - the cheapest tracker funds are priced at around 0.06% AMC and you can get that on a platform like Fidelity that charges 0.25% platform fee so a total of 0.31%. But before you do that I'd suggest a bit of reading at www.monevator.com to learn some more about options.
Originally posted by jimjames


Whether its unfair or not is beside the point, it would be a gross disservice to a naive investor not to point out what a rubbish choice it was and enable them to compound the mistake by carrying on with a marginally less costly platform but the same rubbish investment.

#8
My first investment was also Legal and General UK 100 Index, and done directly through L&G.

The FTSE 100 is always in the news and I thought it would be a better investment than individual shares, and as a tracker it should be relatively cheap.



A year or two later I changed to the L&G UK Index Trust and then I pretty much forgot about it.



A few years ago I checked on the costs, found out there were so called fund supermarkets, and moved everything across to Charles Stanley Direct and switched most of my money out of L&G UK Index into more global funds, e.g. Vanguard Lifestrategy is in the mix.



On the Legal and General website the L&G UK 100 Index Trust cost is 0.82%, it includes platform and fund costs.

On Charles Stanley Direct the platform fee is 0.25% and the L&G UK 100 Index fund is 0.1%, giving a total of 0.35%, and a saving of 0.47%. I wish I had transferred out of using Legal and General directly earlier :-(



I only mention CSD because I use them, there are many other platform providers.



I'm not going to criticise your choice of fund, I made the same selection, but there are many other funds available that may be more suitable to you.



Good luck.

#9



So I'd guess you are up around 25%.


Out of curiosity I had a look at its performance over the last 6 years, up over 50%, so better than savings accounts and regular savers after all.

#10



I opened an FTSE 100 Uk Index tracking ISA at the beginning of 2011 and have been contributing monthly since then.................
Originally posted by Mikedz


It seems you have piqued off some of our resident financial snobs, and I thank you for doing so. Equity investing is not my favoured way of saving, but each to their own.



Some here who mock your choice, fall in to a group that Warren Buffet castigates as those "who reap outsized profits, at the clients expense" He has no problem with a million dollar bet to prove his point with the Hedge Fund Industry either.

His chosen vehicle is an S&P500 Index Fund, not a million miles away from the FTSE 100 you are in. (Let's ignore that they are based on two sides of the same pond)

http://www.investopedia.com/articles/investing/030916/buffetts-bet-hedge-funds-year-eight-brka-brkb.asp

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