Hargreaves Landsdowne ISA Review

Hargreaves Landsdowne are one of the top UK based SIPP pension, savings and investment providers.

Thanks to their size and influence they are one of the best known stocks and shares ISA providers in the UK.

I've had a stocks and shares ISA with Hargreaves Landsdowne since 2003.

I've used it for both regular monthly investments as well as topping it up with additional cash contributions.

There are two main types of Individual Savings Accounts (ISAs) - stocks & shares ISAs and cash ISAs. Here's more information about which ISA might be best for you. For longer term savings it is considered better to invest money in the stock market. Although this exposes the capital to greater risk, there is a better chance of long term capital growth compared to holding cash within a cash ISA.

Income from an ISA is tax free, so it is an ideal tax shelter in which to hold corporate bond and equity income unit trusts.

The Hargreaves Landsdowne website allows most of the day to day managing of the ISA to be carried out online. They have made most operations available online, so the only major reason to telephone them is to request for money to be withdrawn from the account, or to trade a few of the less popular stocks and shares that can only be dealt over the telephone.

It is possible to set up a standing order so that funds are added to the ISA on a monthly basis. It is possible to choose which funds this money is invested into. Drip-feeding money into unit trusts is a good way of avoiding market volatility. Lump funds may also be added to the ISA via a Debit Card.

I haven't need to contact them at all yet, but you'll be reassured to know that Hargreaves Landsdown's telephone support staff are based in a UK call centre. Email support is also available and response times are generally good.

Hargreaves Landsdowne have an unparallelled range of investments available for a stocks and shares ISA. Investments that may be held in a ISA include:

• Unit trusts. Hargreaves Landsdowne have a vast range of unit trusts from leading fund managers. Unlike many ISA providers, Hargreaves Landsdowne refund all or most of the initial charge for most unit trust investments. There are a huge variety of unit trusts available - here are some of my favourite income generating unit trusts. It is also possible to build a diverse ISA portfolio by investing in commercial property, government bonds (gilts), inflation linked gilts, agriculture, commodities and hedge funds.
• ETFs. Hargreaves Landsdowne make it possible to trade a wide variety of unit trusts online, including those from iShares and ETFS Securities. The ETFS Securities ETFs are useful in that they allow commodities such as crude oil, gold, silver and platinum to be held within an ISA. ETFs have low annual charges and are usually free from stamp duty. iShares offer a wide range of equity and fixed income ETFs, including corporate bond ETFs.
  
• Stocks and Shares. Hargreaves Landsdowne offer online share dealing in a wide range of securities. Most stocks and shares can be traded online.

The Hargreaves Landsdowne website was very basic when I first started using their service. The website has now been through a dramatic technological revolution and has some nice features. The website shows a summary of the ISA's holdings and value.

One very nice feature is the portfolio X-Ray feature. This allows holdings within the ISA to be analysed and charts constructed to show asset allocation. This is particularly useful in ensuring that the funds in an ISA don't have too much exposure to a particular region of the world or investment theme.

In general the Hargreaves Landsdowne's ISA costs are low. There is no annual charge for the ISA, although there is an annual charge of 0.5% for holding stocks and shares and certain unit trusts.

If I had a major critisism of the Hargreaves Landsdowne ISA it would be that the dealing costs for shares and ETFs are quite high. Unlike many other online brokers like the Fool share dealing service there is no standard dealing charge, so the bigger the purchase the more the dealing charge will be. I prefer the flat-fee dealing charge of £9.95 per transaction that other ISA providers charge. For this reason I would be wary of Hargreaves Landsdowne if I wanted to base my portfolio on holdings of shares and ETFs. However, I mostly hold unit trusts within my ISA, and use a different provider for share trading.

I've also found the Hargreaves Landsdowne website to be slow at times. There can be problems trading shares at particularly busy trading days. To be fair a lot of other share dealing websites have also had capacity problems, and Hargreaves Landsdowne faired better than most during the market turbulance in 2008's financial crisis.

So in general the Hargreaves Landsdowne ISA is a good place for knowledgeable investors to store their assets free from tax. Happy investing!

The author of this article is not authorised by the UK authorities to give financial advice. This article does not consitute financial advice. Before making investment decisions consult an independent financial advisor.