Every so often we get emails from real people. Normally they are from a nice chap in Nigeria offering the chance of a life changing investment opportunity, but whenever we appear in the consumer press the queries normally arrive shortly after. One such email is below, shared in full with the kind permission of the author (thanks Mr H). This is posted without comment, mainly as it’s the first day back at work after 2 weeks off, but also as I wanted to share the email in full as an insight to how one person thinks about their investments.
Hope you find it interesting. Let us know what you think in the comments below.
Oh, and Happy New Year.
Have been doing my homework on investment platforms with a view to choosing one that can offer me a complete service:- share dealing, ISAs and SIPPs and note with interest the lang cats most recent platform review from July 2016.
I have looked at articles from several financial websites – Investors Chronicle, This is Money, Money Saving Expert etc but many of the articles seem to focus on the basic features, yearly costs of operation but omit to mention points such as :-
features – removing cash from an ISA and preserving the ISA status by having the ability to put the money back into the ISA at a future date – very little mention of this; dividend reinvesting, cost effective monthly drip feeding etc, parallel accounts for family members – all of these features I would value.
ease of use – making a website user friendly is a prerequisite to any service offering from a company with a web presence – be it ft.com or easyjet.com but it is surprising how many companies get it wrong.
funds offered – some seem to offer a few thousand some several thousand but no indication of the quality or type of funds offered. I don’t want to go with a platform only to find they don’t offer a fund which is recommended in an investment article or find the funds they offer are poor investment quality.
reliability – various comments from users experience highlight this as been a major issue with people struggling to transfer accounts, unable to trade on days when the market is high, administrative errors, websites overloaded etc, etc.
demonstration accounts – my biggest frustration has been the lack of access to the platforms to get a glimpse of how they operate – they all state that you need to setup an account – very few have demonstration accounts (as of yet I have never had to purchase a car to see how it drives as most garages have demonstration models).
financial status – there seems to have been consolidation within the platform market in the last few years with platforms being sold and I guess that this will continue as scale of users is the only way to make future profit and that many of the companies that operate platforms as a bolt on to their existing business may find it difficult to justify the ongoing investment in running a platform, therefore I have tried to evaluate who is in it for the long term, has a healthy balance sheet and have struggled on this point as some of the platforms don’t have that many clients when compared has you have done with Hargreaves Landsdown.
I have tried to narrow my choice down and have looked at Charles Stanley, Interactive Investor, Hargreaves Lansdown, Barclays and Shareview/Selftrade. Would I be correct in saying that many platform providers do not do everything “in-house” noting Barclays uses AJ Bell for its SIPP’s – is this common and should I consider only companies that do it themselves for fear of them passing the buck if there is a problem as you have mentioned in previous years reviews.
Is there such a thing as a VW Golf of the platform world – cost effective, reliable, useful features and good in the long term – after all choosing a partner for your investments is not something that should be taken in a hurry based on a whim as it may cost you an arm and leg in the future both financially and otherwise or am I asking too much.
I would rather spend time and effort now, finding a suitable platform company that can offer these services and not have to change in 18 months time as I see many investors who do – frustrated that they have to go through the hassle of finding a new platform and all of the time/costs in moving their investments, so your help would be appreciated.