Index linked gilts and broker's valuation

[mc2fool]

Not sure I ever said that, although it is true that I'm not much of a sports fan or even watcher in general. But I do occasionally watch the-best-of-the-best events, like the Olympics and other "world class" type events.

OK, I think it was when you were asking about things to do in Manchester and you said something about nothing sports-related.

I may have assumed the rest.

Oh right, yes. I was just forestalling any suggestions that I visit the National Footy Museum or take the Man U stadium tour or the like!

[mc2fool]

Yes, the contract notes were 100% correct. I phoned customer services and gave them details of the trade. A piece of possibly electronic paper was passed to the dealers. They made the trade for the standard online commission. My last trade with them was in 2020.

Sound good. I think I'll drop them an email and ask if that's still the case.

I emailed AJ Bell and got a speedy-ish (3 hours) reply to my main questions, although I am little surprised that "we are unable to trade Gilts and Bonds online, we are only able to trade them via telephone."

That's any and all gilts and bonds it seems, not just index linkers. And no IWeb style ability to put in the order online and wait for the dealers to get round to it; it's telephone only. But they did go on to say, "However, we do them at the online rate of £9.95", so that confirms that's still the case, at least.

Was also a little surprised that the answer to asking if index linked gilt holdings could be transferred in from another broker in specie (thought I'd just check to be sure) was, "I have contacted the relevant team regarding your query about transferring in index linked gilts. Once I have a response, I will get back to you.". I await for that....

[mc2fool]

I emailed AJ Bell and got a speedy-ish (3 hours) reply to my main questions ... a little surprised that the answer to asking if index linked gilt holdings could be transferred in from another broker in specie (thought I'd just check to be sure) was, "I have contacted the relevant team regarding your query about transferring in index linked gilts. Once I have a response, I will get back to you.". I await for that....

And they've now got back to me with (unsurprisingly!) "Please be advised, our transfers team have confirmed there is no charge to transfer index linked gilt holdings to our platform."

In the meanwhile, I've grizzled to II about:

the contract note and online order info specify only the clean price, with the consideration amount calculated on that, and ascribe all of the indexation to "interest"!

So, whereas the actual amount of accrued interest (as told to me over the phone) was less than a quid the contract note says it's a couple of thousand!

and asked them to reissue the contract note with the proper figures broken out, and got the reply:

"Thank you for your secure message dated 17th August 2023.

We wouldn't be able to reissue the contract note, but I can request a breakdown that shows the clean & dirty price with the interest separated.

Are you happy for me to request this for you?"

[GeoffF100]

If anyone is looking for a crappy broker, it should not be a long search.

[monabri]

If anyone is looking for a crappy broker, it should not be a long search.

Remind me, who is ii's owner?

[1nvest]

If anyone is looking for a crappy broker, it should not be a long search.

Remind me, who is ii's owner?

Remind me, to which independent custodian do ii use to hold assets with in case the brokerage fails. Oh never mind ... found it, its Interactive Services Limited. Many others opt to use entirely independent custodians, not under the same umbrella.

[Aminatidi]

So just to be clear with IWEB you can buy online?

I was contemplating getting an account with them but putting in tickers like TN24 came up with nothing whilst on HL (who I use) it comes up so I assumed you couldn't buy "live" and online with IWEB.

[Lootman]

So is there any broker that allows you to buy index-linked gilts online?

Or is there a good reason why none allow that?

I think the last time I did a telephone trade was 30 years ago.

[monabri]

So just to be clear with IWEB you can buy online?

I was contemplating getting an account with them but putting in tickers like TN24 came up with nothing whilst on HL (who I use) it comes up so I assumed you couldn't buy "live" and online with IWEB.

With iWeb, you submit an order online and then wait until their team get round to actioning the trade on your behalf. The order will be shown as "pending". iWeb don't hit you with any charges other than the normal £5 trading charge.

[kempiejon]

So just to be clear with IWEB you can buy online?

I was contemplating getting an account with them but putting in tickers like TN24 came up with nothing whilst on HL (who I use) it comes up so I assumed you couldn't buy "live" and online with IWEB.

With iWeb, you submit an order online and then wait until their team get round to actioning the trade on your behalf. The order will be shown as "pending". iWeb don't hit you with any charges other than the normal £5 trading charge.

Not live but online, unsurprisingly the same at Halifax, charges were £9.50.
HL wanted me to telephone.

[mc2fool]

So just to be clear with IWEB you can buy online?

I was contemplating getting an account with them but putting in tickers like TN24 came up with nothing whilst on HL (who I use) it comes up so I assumed you couldn't buy "live" and online with IWEB.

TN24 is a conventional gilt. I don't know if you can buy conventional gilts live online with IWeb as I've only used them for index linkers, but if nobody else pipes up with a yeah or nay before Monday, and I remember to do so, I can initiate a buy for it and see what happens.

I know for sure that you can buy conventional gilts live online with Interactive Investor as I have a holding of TN24 there bought that way.

For index linked gilts, as monabri says, with IWeb you can put in the order online, sticking in either the number of gilts you want to buy or the £ amount you want to spend (including the £5 dealing fee) and they'll do the trade for you as soon as they get round to it. My experience with the 3 index linked gilt trades I've done with them to date is that's always been around 5 to 7 minutes later and, as with all trades with them, you get an email when the trade goes through.

I'm not sure where you're putting it when you say "putting in tickers like TN24 came up with nothing" if you don't have an account with them, but if I log in and put TN24 into the dealing form it says "TN24 - UKGOVT OF 0.125 BDS 31/01/24 GBP1000" and "Closing Price 97.96 (GBP) on 25/08/2023 on Market (LSE)", and it does similarly with index linkers. When the market is open rather than a single price it gives the spread (clean prices, of course).

[GeoffF100]

So is there any broker that allows you to buy index-linked gilts online?

Or is there a good reason why none allow that?

I think the last time I did a telephone trade was 30 years ago.

The online systems will not cope with clean and dirty pricing. There are still a few old style linkers, and they can be dealt online.

I was told by iWeb customer services that they can now trade "a range of gilts" online.

[daveh]

As mentioned on the gilts short term strategy thread I recently bought TN24 and TN25 at HSDL. The deal was online and was for a fixed cash amount. But it wasn't done immediately. I didn't get a price and a 15sec timer to accept the deal, I got an indicative price and a deal pending notification. In both cases the deal went through within a few minutes. The price was at a price around what I was expecting it to be and included a small amount for the interest owed (17p for TN24 and 44p for TN25 on £5k purchases)

[mc2fool]

As mentioned on the gilts short term strategy thread I recently bought TN24 and TN25 at HSDL. The deal was online and was for a fixed cash amount. But it wasn't done immediately. I didn't get a price and a 15sec timer to accept the deal, I got an indicative price and a deal pending notification. In both cases the deal went through within a few minutes. The price was at a price around what I was expecting it to be and included a small amount for the interest owed (17p for TN24 and 44p for TN25 on £5k purchases)

The order was put in online but the deal was done a few minutes later by their team, offline and in the background.

Ok, well as IWeb is HSDL in a different coat we can conclude that's the procedure for them too, I.e. that all gilts, conventional and index linked, are traded with them by putting in the order online and then waiting for them to action it.

[daveh]

As mentioned on the gilts short term strategy thread I recently bought TN24 and TN25 at HSDL. The deal was online and was for a fixed cash amount. But it wasn't done immediately. I didn't get a price and a 15sec timer to accept the deal, I got an indicative price and a deal pending notification. In both cases the deal went through within a few minutes. The price was at a price around what I was expecting it to be and included a small amount for the interest owed (17p for TN24 and 44p for TN25 on £5k purchases)

The order was put in online but the deal was done a few minutes later by their team, offline and in the background.

Ok, well as IWeb is HSDL in a different coat we can conclude that's the procedure for them too, I.e. that all gilts, conventional and index linked, are traded with them by putting in the order online and then waiting for them to action it.

Indeed, which is why I described it that way. But it is online at the online dealing fee and more importantly you don't have to talk to a dealer or hang on a phone line for ages. And pso far in my experience the deal was done just a couple of minutes later, so little chance the price quoted would move against you.

[mc2fool]

The order was put in online but the deal was done a few minutes later by their team, offline and in the background.

Ok, well as IWeb is HSDL in a different coat we can conclude that's the procedure for them too, I.e. that all gilts, conventional and index linked, are traded with them by putting in the order online and then waiting for them to action it.

Indeed, which is why I described it that way. But it is online at the online dealing fee and more importantly you don't have to talk to a dealer or hang on a phone line for ages.

IWeb only have one fee, and it's a fiver whether you deal online or if you have to do a telephone deal for some reason. Interactive Investor also only charge their online fee for index linked gilts, which have to be traded over the phone, presumably 'cos you don't have any option to trade them online.

But, yeah, not having to hang on a phone line for yonks is a positive!

[Lootman]

Indeed, which is why I described it that way. But it is online at the online dealing fee and more importantly you don't have to talk to a dealer or hang on a phone line for ages.

IWeb only have one fee, and it's a fiver whether you deal online or if you have to do a telephone deal for some reason. Interactive Investor also only charge their online fee for index linked gilts, which have to be traded over the phone, presumably 'cos you don't have any option to trade them online.

But, yeah, not having to hang on a phone line for yonks is a positive!

How long is yonks? I would have thought that once you are speaking to a dealer the trade should be done quickly in securities as liquid as gilts. Although I guess he/she needs to get someone else on the phone.

[mc2fool]

IWeb only have one fee, and it's a fiver whether you deal online or if you have to do a telephone deal for some reason. Interactive Investor also only charge their online fee for index linked gilts, which have to be traded over the phone, presumably 'cos you don't have any option to trade them online.

But, yeah, not having to hang on a phone line for yonks is a positive!

How long is yonks? I would have thought that once you are speaking to a dealer the trade should be done quickly in securities as liquid as gilts. Although I guess he/she needs to get someone else on the phone.

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Sigh ... I bought my first index linker through Interactive Investor yesterday (my others have been through IWeb).

A rather tedious 17 minute phone call, mostly waiting for the agent to get though to the dealer...

With II at least, you don't get to talk to the dealer themselves, the call centre agent plays piggy in the middle.

But in that trade the delay wasn't 'cos there was any back-and-forth; I told the agent what I wanted to buy and he gave me an indicative price and I told him to buy £nK's worth at best, and he then put me on hold to contact the dealer to make it happen, only returning to me every few minutes to say "sorry, I'm still waiting to get hold of the dealer" before finally returning to confirm it had happened and to give me the details.

As it was my first and so far only over the phone deal with II I don't know how typical that is of them.

[1nvest]

Yes book cost is shown as un-indexed price plus the trade commission. There's no point in me modifying that to the dirty price paid if they can't provide a current valuation in a similar fashion. Ho Hum.

N.

Well that at least allows you to see the change in un-indexed valuation, and is better than IWeb which shows the book cost as the actual amount paid for the deal (indexed + interest + dealing fee) but the current valuation just on the un-indexed clean price, so making it look like I'm instantly 35% down!

After purchase, revise the book-value down (by 35% in your case) and the ongoing gain/loss value will indicate the current real gain/loss.

Would be nice if that could be applied generally, including taxes (only pay taxes on the real gains, not the nominal gains).

[Aminatidi]

Does IWEB deal with normal gilts correctly i.e. no "weird" values shown?

Debating whether to shift some or all of my investments to them as Vanguard is now at a point where the fees are close to the cap but I like the simplicity.