Transforming personal finance since 2011

#91 — Key Resources


November 12th, 2023

By Andrew Craig

Reading time: ~ 16 minutes

0ver the years since founding Plain English Finance, we’ve had lots of people ask us about the “best” financial products and services. Often the “right” answer in terms of answering questions about such things will be highly subjective and depend on the person involved.

That said, below we have listed some of the key resources you might consider using to get your finances humming. Common to all of them is that we use these companies ourselves. I’ve been a subscriber to MoneyWeek magazine and read it nearly every week for about twenty years and I have accounts with all of Hargreaves Lansdown, Interactive Investor, IG Index and Bullion Vault for example.

It is important for us to stress that none of what follows should be seen as financial advice. Your capital is at risk when you invest. The value of investments and any income from them may fall as well as rise, the return may increase or decrease as a result of currency fluctuations, and you may not get back the amount of your original investment.

Plain English Finance Limited does not make any recommendations regarding the suitability of any product for you and the information provided here should not be considered as investment or other advice or a recommendation to buy, sell or hold a particular investment.

Please also note: Some of the links below are affiliate-links. This means that if you use them to subscribe to MoneyWeek or open an investing or trading account, for example, we will be paid a small commission by the relevant company.

To be clear – there will be no additional charge for you if you do this. I might add that we’ve been talking about many of these products and services for many years without any affiliate relationship. “Write for free until you get paid” as Mark Twain used to say!

...so here goes. Please find below a number of our preferred resources for your edification...


Books & Reading

"How To Own The World"

Now in its third edition, my first book has been No. 1 rated on Amazon in categories such as Pensions, Investments and Personal Finance for a good proportion of the last few years. The third edition was the best-selling new finance book in the UK in 2019. The book currently enjoys more than 3,000 reviews across Amazon, Audible and Goodreads, the significant majority of which at five-stars and many of which describe it as “life-changing”.

If you haven’t read it yet, please do consider joining something like 100,000 people who have, for a Plain English explanation of many of the key concepts you will want to understand when it comes to your finances.

Buy Now At Amazon

Our Favourite Finance Magazine - MoneyWeek

If you only take one “further reading” action over and above reading my books, you might consider subscribing to MoneyWeek magazine and doing your best to read it every week. It is my favourite UK finance magazine. I have been reading it for twenty years, usually over breakfast on a Saturday morning.

I'd even go so far as to say that I probably wouldn't have been able to write "How to Own the World" had I not subscribed to it so many years ago. If you are based in the UK, I believe that the price of a subscription is one of the most cost-effective investments you can make in your financial future.

By reading MoneyWeek, you will ensure that you have a basic grasp of what is going on in the world and you will enjoy a constant stream of investment ideas and invaluable information on things like funds and shares. Many people are also surprised at what an easy read it is. It even has sections on things like wine, cars and property to lighten the tone. I can’t recommend it highly enough.

Discover MoneyWeek


Conventional Financial Accounts

To make decent forward progress with your finances, you will obviously need to use various types of financial account (ISAs, Pensions and so on). If you’d like to learn about such things in more detail please do consider looking at the relevant sections of “How to Own the World”.

Below are four companies I’ve used for many years for my own financial affairs…

Hargreaves Lansdown (HL)

Hargreaves was one of the first companies in the UK to champion the private, “DIY” investor. Today they are a large stock market listed company and the UK’s number one platform for private investors, holding more than £120 billion for about 1.7 million customers. I have had an account with them for more than a decade. In that time I have found them to have exceptional customer service – one of their key selling points.

Some people think they are a little expensive. My view is that they could be worth a small premium, particularly if you’re just getting started and have relatively little money to invest. Your financial affairs are extremely important. Given this fact and how relatively complicated these things are for many people, I think that there is great value in using a company where someone intelligent, helpful and articulate answers the phone within a few rings and can help you!

Find Out More Now

Note: Capital at Risk

Interactive Investor (II)

I also have an investment account with Interactive Investor or “II” for a number of years. Since 2022, II has been part of abrdn plc - another large business listed on the London stock exchange. Interactive Investor have more than 400,000 customers and 1 in 4 UK share trades are executed on their platform.

II charges a monthly flat fee for their investment accounts rather than a small percentage of your invested funds which can make them a particularly good choice if you have larger amounts to invest. With their ISA account costing £4.99 a month, for example, this implies you could be better off at II vs HL if you have more than about £13,300 to invest - if you’re investing in funds where HL levy a charge of 0.45% (up to £250k).

Find out more now

Note: Capital at Risk


Spread Betting and Precious Metals

IG Group - Spread Betting and CFDs

I wrote a section about spread betting in my book “How to Own the World”. As I said in the book:

“Many people have not heard of spread betting but, for an individual who is prepared to put the time in, it can be a powerful way to make money from investing.”

If you have a spread betting account you are, quite simply, able to bet on the movement of a massive range of financial assets. Rather than betting on football, horses, dogs or the cricket score, you are able to bet on a vast range of shares, bonds, stock market indices, commodities and other investments.

It is very important to understand that spread-betting is an advanced activity and only appropriate if you are reasonably knowledgeable about financial markets and prepared to put in a decent amount of work. It is fairly complicated, and if you don’t know what you are doing it is possible to lose a large amount of money very quickly and even possible to lose more than what is in your account if you’re not careful.

The UK’s leading spread betting provider is IG Group. As they put it on their website:

“Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs (with IG). You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.”

It is very important to bear this risk warning in mind. However, for the advanced investor and trader, a spread betting account can be a useful addition to your roster of financial service providers. I have had an account with IG for many years.

It is also probably worth saying that you should almost certainly only contemplate having a spread-betting account once you have significant savings and have already got to grips with your Pension and ISA arrangements.

“CFD” stands for Contract For Difference. A CFD is a financial derivative that allows traders to speculate on the price movements of various assets, such as stocks, commodities, indices, or currencies, without actually owning the underlying asset. It is essential for anyone engaging in CFD trading to understand the risks and have a solid understanding of the financial markets.

Find Out More Now

Please note:

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Bullion Vault - for Gold and Silver

If you have read How to Own the World you will be aware of the key role played by gold and silver in the global financial system. At the time of writing (November 2023) – gold has averaged just over 10% a year valued in British Pounds for the last 15 years.

There are a number of different ways to invest in gold. I have covered these in some detail in the past, most particularly in the three articles linked to below – the first of which also covers some of the arguments for holding gold and potentially silver too:

(NB – Although these articles are a few years old, I would argue that they’re as relevant today as they were at the time they were written. Gold has been an important financial asset for thousands of years and likely will for a long time to come).

If you manage to find the time to read these articles, you’ll see that many gold “purists” believe that it is really important to own “physical gold” – that is to say the actual underlying stuff rather than a fund or derivative product which gives you financial exposure to it.

There are various ways of doing this but one of the best in my experience is by using a company called Bullion Vault.

Bullion Vault is a web-based service that enables you to own physical gold without taking delivery. They are the world’s largest online gold investment service taking care of £3.3 billion for more than 100,000 customers. The bullion is held legally in your name and you can elect to keep it stored in places like London, Switzerland or Singapore.

I have had an account with them myself for some time and have found them to be first class. Setting up an account with them is very easy and you can then just transfer money from your current account as you would with paying any bill.

Find Out More Now

Note: Capital at Risk

A Note on Freetrade, Trading212 and eToro

Over the years many people have asked me about some of the new “challenger” stockbroking companies which have entered the UK market. Such companies include the likes of Trading212, Freetrade, InvestEngine and eToro.

It is important to understand that these companies offer a fundamentally different range of products to firms like Interactive Investor and Hargreaves Lansdown.

To explain: In the main, such companies can only offer stock market listed products. That is to say single company shares, Exchange Traded Funds (ETFs) and Investment Trusts (ITs). They do not offer traditional investment funds such as Unit Trusts and Open Ended Investment Companies.

This is because it is much cheaper from an IT- and human-resource perspective only to offer the products they offer. There are only a few thousand main stock market listed investments but many more thousands of funds. It isn’t practicable or economic for these companies to put the infrastructure in place to offer the full range of fund products.

To be clear, I have nothing against any of them if that is the way someone wants to go (i.e., to use ETFs or single stocks). It just means that their customers can’t access a rather wider opportunity set of potential investments – which is one of the reasons I have never opened an account with any of them personally.

Many people have found them an attractive option in recent years given their low costs and attractive and intuitive investment apps which have appealed to younger and more tech-savvy investors in particular. They are certainly one way to go if you want to keep things very simple and invest primarily in entire stock markets such as the S&P 500 for example.

One thing to remember about such companies, by the way, is that all brokers make a “spread” - between the price you can buy and the price you can sell. So - even though you’re getting commission-free trading with such companies, you’re actually not getting entirely free trading - else they wouldn’t be able to make any money of course.

...and Vanguard

Another company I get asked about a fair bit since they launched in the UK market is Vanguard. A key thing to understand about Vanguard is that they only offer their own products. As we’ve already seen, firms like Interactive Investor and Hargreaves Lansdown offer a very wide range of financial products. They’re described as “investment platforms” or “fund supermarkets”. Such companies enable you to buy and sell thousands of different things - including shares, individual companies and a very wide range of funds.

Vanguard, on the other hand, only offer a range of their own in-house products. To be clear, I think Vanguard is an excellent company and their products are great value (we use some of their ETFs in our Fund for example). They can be a good option for someone who wants to keep things simple – which is not necessarily a bad thing to do as I’ve written about at some length in the past.

I’ve not had an account with them personally because I want to be able to secure exposure to financial assets which they don’t offer – such as certain single stocks and actively managed funds.

As a general comment – if you want to understand more about the types of investment accounts and financial products available to you and how you might think about using them, please do have a look at the relevant sections of “How to Own the World”.

We hope you found this page useful and wish you the very best on your investment journey.


Disclaimer

Plain English Finance Limited has used all reasonable efforts to ensure the accuracy of the information contained in this communication at the date of publication.  Andrew Craig is a director of Plain English Finance Limited and this web page is being issued by Plain English Finance Limited.

Whilst Plain English Finance Limited has used all reasonable efforts to ensure the accuracy of the information contained on this web page at the time of publication (November 2023), no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. 

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Please note:  Past performance is not a reliable indicator of future performance. The value of investments and any income from them may fall as well as rise, the return may increase or decrease as a result of currency fluctuations, and you may not get back the amount of your original investment. 

Plain English Finance Limited does not make any recommendations regarding the suitability of any product for you and the information provided here should not be considered as investment or other advice or a recommendation to buy, sell or hold a particular investment. To reiterate, investments mentioned herein may not be suitable for you and you must make your own independent assessment and rely on your own judgement (or that of your financial adviser) in order to determine whether any particular investment represents a suitable investment opportunity for you on the basis of your personal circumstances, tax position and available financial resources and the legal, regulatory, tax and investment consequences and risks of investing. If you are in any doubt about the information here or elsewhere on our website please consult your financial or other professional adviser. 

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Past performance is not a reliable indicator of future performance. The value of investments and any income from them may fall as well as rise, the return may increase or decrease as a result of currency fluctuations, and you may not get back the amount of your original investment.

Plain English Finance Ltd. does not make any recommendations regarding the suitability of this product for you and the information provided should not be considered as investment or other advice or a recommendation to buy, sell or hold a particular investment. If you are in any doubt about the information in this email or our website please consult your financial or other professional adviser.