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Feb 2020

How to Choose a Stocks and Shares ISA

How to Choose a Stocks and Shares ISA

You want to open an Investment ISA, but are unsure of how to choose an account. Our step-by-step guide breaks down the questions you need to be asking yourself when looking to open a Stocks and Shares ISA. 

Anyone can invest in a Stocks and Shares ISA – but not everyone knows how to find the best account for them. There are various considerations that you should be thinking about if you are looking to open a stocks and shares ISA.

Here is our easy step-by-step guide for a first-time investor to open a Stocks and Shares ISA.

Step 1: Look at your finances and answer some key questions

Sit down with a pen and paper and look at your finances. Think about how much you have and what you want to achieve with your investments.

Consider the following questions:

  • How much you want to invest?
  • Have you invested before?
  • Have you used any of your tax allowance?
  • If so, how much do you have left?
  • Do you have any debt?
  • If so, is it under control/do you have a sustainable repayment plan?
  • Do you have other accessible savings?
  • What are your long-term finance goals?

Once you know where you stand, and you’re sure you want to press on with opening a Stocks and Shares ISA, you can move onto step two.

Step 2: Choose your preferred management style

Depending on who you are, you might suit a more passive or active management style.

Are you looking for a do-it-yourself style account where you can confidently, actively manage your investment yourself?

Or are you wanting a fund manager to manage your account for you?

We’ve done an in-depth look at each of these styles in our “How to Open a Stocks and Shares ISA” blog. We’ve covered DIY accounts, pre-packaged “fund of funds”, and using a “robo-adviser” investment manager.

Step 3: Think about your risk profile

Your attitude to risk is one of the biggest factors in deciding which account to choose. No Investment ISA is 100% safe, as the stock market fluctuates. So if you have a poorly performing investment, you could end up getting back less than you put in.

Some providers might have risk profile questionnaires you can fill out to get an idea of what suits you.

If you are a really risk-averse person, then a Stocks and Shares ISA might not be for you. In this case, consider opening a Cash ISA instead. While the returns are lower, these accounts offer less risk than Investment ISAs.

Step 4: Shop around

You can only open one Investment ISA per tax year, so making the right choice for you is important as if you’re unhappy with your selection, you can’t open a different account until the next tax year.

Many Investment ISAs will have charges, including:

  • Administration charges
  • Fund charges
  • Switch charges
  • Buying & selling charges
  • Bid/offer spread charges
  • Transfer fees

Step 5: Choose your account

You can read through our Investment ISA Comparisons to look at many different options available.

Make sure you look at the range of investments available with each provider. Does your chosen account/provider offer the range of investments you want? These might include:

  • Funds
  • Investment trusts
  • Index funds
  • ETFs
  • Direct shares
  • Bonds

Step 6: Approach your provider and open your account

In order to open an account, you will need:

  • Proof of address
  • Your nationality
  • Date of birth
  • Contact number
  • National insurance number
  • ID

Once the provider has verified your details, your account will be opened and go live.

You can then put your money into the ISA and start investing! 

Read more on Stocks and Shares ISAs and Cash ISAs

Selected ISAs

Stocks & Shares ISA

from Wealthify

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Choose your risk profile and have an investment Plan built and managed for you
  • Invest From: No minimum

Why we like it: Choose your level of risk from cautious to adventurous and have a plan expertly created and managed for you. Create multiple plans with different risk levels, Ethical plans also available. Invest as little or much as you like, add regular payments and top up whenever you like. Withdraw money or transfer out without notice or penalty fees. Wealthify app lets you check how your Plan is performing, manage your transactions and provide investment news and insights. Simple annual management charge of 0.6%

Stocks & Shares ISA

from Moneyfarm

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Choose your risk profile and have it matched to an investment portfolio expertly built and managed
  • Invest From: £1,500

Why we like it: Answer questions about your goals, financial situation and attitude to risk, and Moneyfarm will recommend the right ISA portfolio for you, built and managed by experts to help your money grow. You’ll always be invested in a portfolio that’s suitable for you, and you can manage this through the Advice Centre. See what you’re invested in, how you’re performing and how much you’re paying anywhere and any time with the Moneyfarm app. Add money to your ISA by setting up a direct debit, investing a lump-sum, or by transferring old ISAs for free

High Income ISAs

High income ISA ideas:

ISAs Products

Cash ISAs

Fixed Rate & Instant Access ISAs:

Cash ISAs: 

Stocks & Shares ISAs

Types of Stocks and Shares ISA include: 

Stocks and Shares ISAs

Latest News

5 Considerations for Your Next Investment ISA

15th March 2021

You've decided to invest your savings into a Stocks and Shares ISA. You'll be using your tax-free ISA allowance for this year before the deadline, while also investing your money for your future. But what do you need to consider before opening an account? We've put together a list of our top five considerations for you to think about before you click "apply". 

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