Can I invest in individual businesses with my ISA?

Hi,

I already have a Stocks & Shares ISA, Lifetime ISA, Premium Bonds and emergency fund account. I also have two private pensions which are doing well.

I would like to invest into individual businesses. My ISAs offer a few individual businesses/companies but not many. Am I right in saying I would need an individual stockbroker to do this on my behalf? Or is there an app you can suggest where I can do this myself?

For example, if I wanted to invest £1,000 into my favourite football club, my ISA accounts do not offer this so I would need a broker?

I hope this makes sense? Any advice would be greatly appreciated.

Hi Ben,

Thanks for your message. It sounds like you were very well-organised and are in a very good place with your personal finances.

Your question is related to what I think are unlisted shares. These are shares which are not available to be easily bought and sold on a stock exchange. It is not typically possible to buy or hold unlisted shares in an ISA and there are quite strict rules about what you can and cannot buy in an ISA.

You don't say which team you support. Let's look at Arsenal as an example (and please don't shout at me if this offends you!). Arsenal Football Club has shares but not many people hold these, and they're not often traded. Any trades are usually arranged privately and so Arsenal is effectively a privately-owned entity. You wouldn't be able to easily buy or hold Arsenal shares in an ISA.

Manchester United is a different kettle of fish. The club is publicly-listed on the New York Stock Exchange with the the ticker 'MANU'. If your ISA provider allows you to buy US shares (and you complete a form which enables you to do so called a W-8BEN form) then you would be able to hold Manchester United shares in your ISA.

As a general rule, I would look at whether you can buy the shares you want through mainstream ISA platforms such as Hargreaves Lansdown, AJ Bell or Trading 212. If you cannot then it might be prudent to invest in something a bit more mainstream instead.

The other consideration when buying more esoteric investments is to consider the trading costs. You mention investing a relatively small sum such as £1,000 into a business if you did find a broker that was able to purchase something more unusual for you. There's a good chance that the transaction costs would be relatively high, making this a financially questionable activity.

A final consideration is risk. Diversification is generally a pretty good rule and investing lump sums in less liquid assets - and tying your fortunes to the fate of only one company - can be pretty risky.

Maybe you keep your support for the football club for match day and invest in something more boring instead! I hope this is helpful.

Thanks for your interest in Boring Money. And I’m sorry if you hate Arsenal and Man U and my answer has mortally offended you!