If you let someone else choose things for you, it makes the decision process easier and quicker, but you’re never going to get exactly what you want. If you opt for a box of chocolates, for example, there’s bound to be some unpopular flavour scudding around at the bottom.
So if you really want to get exactly what you’re after, you need to do the selecting yourself, whether that’s picking and mixing your own chocolates, or choosing your own individual savings accounts investments through a self-select ISA.
These can offer the full range of ISA-able investments, including single company shares, unit trusts, investment trusts, real estate investment trusts, gilts, cash, exchange-traded funds, structured products and cash funds. Peter Howard, product manager for TD Waterhouse, says, ‘The only commonly traded shares in the UK you can’t hold are those listed on AIM and PLUS (formerly Ofex), because they are banned under the ISA rules.’
Maximum flexibility
You can make up your ISA allowance with any combination of these, and buy and sell them within the self-select ISA wrapper whenever you want to. It is by far the most flexible kind of ISA, and gives you free reign to pick exactly what you want.
But before you start choosing your investments, you need to find the right ISA first. There are scores of different ones on the market, available from small, local stockbrokers, larger national chains, and internet brokers. So it is worth looking into the details of each offering to identify which one is right for you.
Your first consideration should be whether a provider offers all the investment options you are looking for. Some, for example, allow investment on up to 20 international exchanges. Others offer trading in most popular foreign shares, and others limit investors to the UK for direct shareholdings.
Also check the range of funds available. Some will offer all the funds in the investable universe, while others use a fund supermarket platform. These have a huge range, but some may not have everything, so it is worth checking that their range is suitable for you.
Ben Lundie, head of Vantage development at Hargreaves Lansdown, points out, ‘Providers may be restricted to certain “buy” lists or fund groups depending on the platform they use. Cofunds has 70 or 80 fund groups and if you want something outside that range you are restricted.’ Others, such as E∗trade, are designed for direct equity investments, and don’t offer access to funds at all.
Some self-select providers offer products that are specific to themselves. Barclays Stockbrokers has structured products that are listed on the stock exchange, so it offers those through its self-select ISA. It also has its own brand of exchange-traded funds, iShares, listed on the stock market, so it sells those through its ISA too.
Many ways to invest
The next consideration is how you want to buy and sell your shares.
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