3 essential considerations to take when choosing a GIA provider
General investment accounts (GIAs) are a great way to hold investments like shares and funds without having to manage your contribution limits in the same way as an Individual Savings Account (ISA). But what are the most essential considerations to keep in mind when it comes to opening a GIA?
Although GIAs do not offer the same tax-free wrapper as ISAs, you’re free to invest as much as you like, making them ideal if you’ve already used your £20,000 tax-free allowance elsewhere.
While this means that you may be liable to pay tax on the profits you make throughout your general investment account, you can benefit from a higher level of flexibility.
GIAs also allow you to hold a wide range of assets, including both UK and international shares, exchange-traded funds (ETFs), and corporate or government bonds.
You can also benefit from instant access to your money, which can allow you to withdraw your funds whenever you need them. This can make GIAs more flexible than alternative investment options, especially if you would prefer to open an account that can also work as a form of emergency fund.
But what makes some GIA providers better than others? Let’s delve into the world of General Investment Accounts to understand three key considerations to keep in mind when choosing the right provider for your needs:
1. Keep fees in mind
When opening a GIA, the most important consideration is the fee structure. This is because restrictive costs associated with your account could eat into your profits over time, creating an unnecessary financial burden on your investments.
You should always compare the structures of each General Investment Account you consider. Fees can come in many different forms. Some providers charge a percentage of assets; others prefer to use a flat fee or a combination of the two.
For Wealthify’s GIA account, the platform offers a transparent fee structure where there are no costs for deposits or withdrawals, but an annual fee of 0.6% on your total investment value will be payable.
Many providers will have different fees depending on the size of your portfolio, so keep in mind how much you expect to contribute over time.
In some cases, there may be hidden costs that may not be immediately clear. Look out for dealing fees, foreign exchange charges for international stocks, and custody fees, which are charges for holding funds, which can make a low-cost GIA more expensive if you plan to make trades.
2. Investment options
You’ll also need a GIA that matches your financial goals. This means finding an account that aligns with your portfolio strategy and can provide you with the investment options you need.
Not all providers can guarantee access to a wide range of UK or international shares, funds that include OEICs and unit trusts, ETFs, and investment trusts. So if you have a specific series of assets in mind, it’s always best to ensure that you have access to them.
If you’re planning to invest in certain sectors or thematic funds, such as ESG or technology, or are after fractional shares for investing smaller amounts, it’s always best to check before opening an account.
Similarly, some providers offer ready-made portfolios or robo-advisor options to assist more passive investors with a professionally created portfolio that’s ready for action.
3. User friendliness
Factors like usability, functionality, and reliability should all rank high as considerations when looking for the right GIA provider.
There can be a number of factors that may help or hinder your experience managing your GIA. For instance, you may prefer a mobile or desktop-first experience. You might also prefer to have a GIA provider that offers a rolling newsfeed and resources to help support your decisions.
If you’re an advanced investor, you might want to prioritise a provider that features stop-loss or limit order functions, which aren’t available everywhere.
Possessing a good level of customer service can be key, and easy-to-access support channels via phone and secure messaging can make a big difference when managing large portfolios. It’s also worth checking that your provider is authorised and regulated by the Financial Conduct Authority (FCA) and that your assets are protected by the FSCS up to £85,000 for peace of mind.
Choosing the GIA for your needs
When it comes to investing, our goals can be wildly different. So it’s always worth taking the time to conduct a little research and due diligence to make sure that your GIA provider is the best fit for your needs.
Take the time to think about what you want from your general investment account and seek it out with your provider as a priority. Always make sure you’ve also checked for fees and any hidden charges that could harm your profitability later down the line.
With the right GIA, you can take your wealth management to new heights, and taking a little time to find the right provider for your needs can be the most rewarding approach for long-term success.