Broker comparison: cheap investment platforms UK

https://www.barclays.co.uk/smart-investor/investments/investment-costs/

Barclays Smart Investor has removed minimum £4 per month fee. Its just 0.1% pa for stocks and 0.2% pa for funds.

You are correct @Onedrew
It will be the existing customer vs new customer differences. @Fiz must be an existing customer, as for them it is:
“No minimum monthly fee – We’re removing the £4 minimum monthly fee.
We are freezing Customer fees for existing customers: 0.2% pa for funds. 0.1% pa for all other investments. The maximum monthly fee remains capped at £125.
New trading fees: Existing customers will be charged the same as new customers for any investments they buy or sell.”

This platform comparison page is brilliant, I make regular use of it.
But I have a question: shouldn’t you add another column, namely the “bid-ask spread” policy/practice? I have accounts with Lloyds Investment (where I normally buy OEIC funds) and HL (GIA, ETFs) … but recently I have discovered the amazing, seemingly-too-good-to-be-true “free” platforms InvestEngine and Trading212. In addition to the “no annual fee” and “no transaction charge”, it appears that, on ETFs at least, they also have a zero bid-ask spread. At least that’s what my experience this morning (of initiating first a SELL and then a BUY at Trading212) seems to show.
Love to know what you might have to say about this.

I don’t fully follow why Trading 212 is separated out and almost warned against? It seems to have a similar model to investengine. I understand it may encourage other products but if it’s fund range is good then it’s a good option on top of 5.2% interest on uninvested cash and 1% cashback for new customers?

@Algernond isn’t this because HL are routing orders via market makers? These venues are providing liquidity so would explain why your orders execute quicker.

Investengine entry here states 0.15% £133.33k. Max £200 . But in their website there is no mention of 0% for amount greater than 133k. Am I missing something or IE has changed the pricing structure?

I’m a passive investor mainly buying LifeStrategy and other index funds, and I use regular investing with the occasional lump sum deposit. I imagine I’m fairly typical of Monevator readers. Once over ~£27k the best option seems to be Lloyds. Have most readers come to this conclusion, or have I missed something.

@Andrew. You’re the second person in the matter of a few days that has mentioned the HSBC FTSE All World C fund as having an OCF of 12 bps. You made me look it up to check. And indeed it is 12 bps. This is a 1bp decrease, which must have happened very recently. So at least heading in the right direction. Perhaps along with the launch of the other All World products recently from Amundi and Invesco – albeit they’re too small really currently – it’ll encourage Vanguard to take a look at its pricing of its All World / All Cap products.

Is it possible to get MoneyFarm (classic) on this list?

According to the iWeb and Lloyds websites, you can’t hold LifeStrategy funds through their ISAs:
https://www.markets.iweb-sharedealing.co.uk/funds-centre/fund-supermarket/detail/GB00B4R2F348
https://www.investments.lloydsbank.com/funds-centre/full-fund-range/details/GB00B4R2F348
Under eligibility, there’s a big red cross next to ISA. In fact, it looks like all Vanguard funds are not eligible with an ISA. Seems strange.

The x-o ISA is NOT a flexible ISA (confirmed by email from x-o today). Their Sharedealactive ISA is flexible. I think it perhaps was in the past or there was some confusion. A search for x-o flexible ISA has a hit for the application form saying Flexible ISA, but when you follow the result to their site there’s no mention of flexible.

@murky – I suspect you will need to contact each broker directly to ask if they accept SAYE share transfers to an ISA or SIPP and whether it can be “in specie” or cash only. If it’s cash only, and you still wanted to hold the shares, then you will likely be pay stamp duty, trading fees and bid/offer spread to do the transfer. I’m assuming the shares are listed on the London Stock Exchange.

@ Fletch and ChrisO – thank you for the Moneyfarm tip! I’ll take a look.

@ Stuart B – Thank you for the X-O info. Much obliged. Will update the table.

Many thanks @TA
For ISA I had missed InvestEngine. But how is Vanguard better than AJBell? For SIPPs, Freetrade seems more expensive than Fidelity and its £90 cap. Maybe I’m not reading the tables correctly.
thank you

Before I forget, you can bring down Fideltiy cost to £72/year by contributing it to the SIPP (tax relief will bring it up to £90) and have the fees collected from there. It works well.

V helpful comparison and comments, as usual. Thanks a lot.
Q: is Interactive Brokers evaluated as providers in the SIPP session, albeit with the need for an external manager?
The logic being that they offer competitive terms on generic accounts and potentially for ISAs.
Cheers

Couple of data points which may be helpful
1) If your accounts hold on ETFs and cash Fidelity fees are capped at £7.5/month and this is pooled across ISA and SIPP accounts. Even with their higher dealing charges they would beat most other platforms as long as you are doing <50 deals a year
2) Interactive Brokers accounts can be linked to Wise debit cards which allows you to make free / cheap withdrawals in multiple currencies (one free withdrawal per month and £1 fee for any subsequent withdrawals). This is by far the cheapest way to buy currency for spending or sending abroad (essentially market rate + $2 IBKR commission vs 1.5% fx conversion charged by the cheapest cards)

I can’t see any mention of Prosper.co.uk. Looks too good to be true? SIPP and ISA with zero platform and transaction fees. They don’t have all the funds but there are plenty over Fidelity/HSBC/L&G/BlackRock/Vanguard. AND for some reason they refund the OCF and transaction costs on 30 funds!

I can’t see a suggestion of how long they intend to discount those funds but even without that they save II’s Pension Builder £155/yr and IWeb’s £5/trade.

They use ‘Seccl Custody Limited’ who are owned by Octopus Group.

What’s the catch?

My research into Prosper so far indicates that they’re offering to refund OCFs until they’ve £20,000,000 under management. [Source: https://www.linkedin.com/feed/update/urn:li:activity:7176172822803681280/%5D After that point, “we will charge members a fair platform fee and low, fair and transparent fees for any other investment products we think represent great value.”

Other points of note:

– They’ve raised from several respectable sources (including execs from Monzo and CapitalOne).
– The founding team has plenty of experience (including in finance).
– They’re FCA approved, which means they’ve passed the regulatory sniff test.
– Funds aren’t held by Prosper, but rather safeguarded with Seccl Custody Ltd…
– … which is also FCA regulated and FSCS protected. This is the same ‘wrapper’ that Revolut (and other e-money institutions) uses for customer funds while awaiting their UK license.
– Seccl Custody is well-established and provides the back-end muscle for lots of fintechs.

I would imagine this initial fee-free environment is being paid for by investor cash, but once they’ve £20m under management, switching on low fees will cover that gap.

While remaining cautious, I think it’s a legitimate and potentially useful platform. There’s so much legacy tech in finance – and, thus, inefficiency – that the challengers emerging with built-from-scratch platforms can genuinely afford to cut customer costs this way.

As Monevator said Prosper.co.uk may be yet another “fee free” broker which is hoping to make money “somehow”. In the meantime it has painted itself into a corner. It has a zero fee SIPP, which is what T212 were promising, but never got. It offers OEICs denominated in GBP so it is hard to hide spread and forex fees. As a headliner it offers a rebate on a few low and moderately priced developed world equity and bond fund fees.

To retort to Monevator at present Prosper.co.uk are offering all things to all people. Their offering is “optimal” for any serious long term investor (but not traders). However its savings rates can be beaten and it doesn’t have JISAs or LISAs. I’d say it would be a tough one to put in the table so I don’t envy Monevator.

Hi, If i have 100k GBP and i want to actively trade around a maximum of 8 trades (sell / buys) per month due to re-balancing my portfolio, what would be the cheapest option in the UK?. I want to trade stocks listed in the S&P500. I want to keep the fees to a minimum taking into account spread and trade costs.

Thanks,

@The Accumulator Lot of scare mongering going on about InvestEngine on this thread. Can someone more experienced comment on it to allay the fears? I have got a significant investment in IE and would like to get an expert opinion to decide on whether to leave or stay.

re MoneyFarm. This seems like a new addition. I’m just looking for a new platform for a GIA, having become a bit annoyed by T212 and InvestEngine.
You’ve put MoneyFarm in the “fixed fee” category, and £0 as the fixed fee for a GIA. This doesn’t seem to match what I see here: https://goodmoneyguide.com/review/moneyfarm/ … it seems to say that a % fee of 0.25% to 0.75% is charged (plus transaction fee).
Is this wrong? If not could you justify its inclusion in this (prestigious) list of yours? There are an awful lot of platforms these days. One has to be very good indeed to get added here.

Morning,

In regards to the table format, when I search for “shares ISA” to compare just the ISA costs, it hides the brokers name, like this https://i.postimg.cc/J7y5Qwvx/Screenshot.png.

Could you add the broker name into an extra column, for each entry. This means when I search for “shares isa” it will show just the ISA costs but it will be easy to see which broker it is for?

@Trevor – thanks for the screenshot. That is poor. I’ll have a play with that and see if I can restructure to fix. I may be limited by what the table allows me to do but I’ll take a look.

@Robin – are you not seeing what I see? Annual fee column: 0.15% £250k. Max £375

Are there any brokers that can automate SIPP drawdown? I’m with interactive investor and I’d like to take a monthly or quarterly income whilst leaving the balance fully invested. The platform allows me to automate monthly cash withdrawals, but these will fail if don’t log on each month to sell enough shares to make the cash available. They can all automate share purchases – why not sales?

“not entirely convinced it’s your money any more”

I’ve always had that feeling about pensions – governments, pension companies – everyone has their beady eyes on your money! The budget was the latest manifestation of this, and it was the trigger for my decision to put my SIPP into rapid drawdown. The kids will get it sooner rather than later. Money from regular income can be passed on free of IHT.

When asked, Interactive Investor just say they don’t have that facility. However, I have discovered that Vanguard can do it, and I’m leaning towards switching to them if I don’t find a decent alternative.

I still find it astonishing that II cannot do this – what do all of their other draw-down customers do?

@Matthew. I’ve not tried this for an ISA account, so cannot give you a specific recommendation.

When I had PoA for my mum, I managed her other affairs (banks, savings, pensions etc), but only a cash ISA. In that case, the building society was happy for me to complete the forms and I supplied a certified copy of the PoA.

It’s often technically possible to open and manage an account without even referencing the Power of Attorney (some platforms use other means to identify applicants such as a debit card). This could, however, put you in breach of the broker/platform’s terms so it’s worth treading carefully.

I know that interactive investor allow you to register a LPoA (scroll down on this page for the form: https://www.ii.co.uk/useful-forms/account-admin)

If doing this, I strongly recommend getting a certified copy of the LPoA rather than sending the original (forgive the unsolicited advice). The LPoA may literally be irreplaceable.

Good luck and best wishes – been there.

@Accumulator have you looked at grouping the tables based on account type, rather than fee strategy. It would make it easier to compare like for like. This is a quick knock up of what it might look/work like (some info/formatting might be a little bit off) https://i.imgur.com/fXB0IO6.png

I can’t find the thread I wanted to comment on – I know it was @Trevor! – but I just wantd to say that it isn’t easy to see, from the table as it stands, that the cheapest option for someone like me (exchange-tradeable holdings only – ie bonds, shares, etfs and investment trusts) is HL for a non-wrapped fund (free) and for an ISA (£45 pa, capped). Their SIPP rates may be slightly more expensive than some, but for me, it’s not worth the headache and hassle of trying to run accounts for three of us across two platforms without running into all sorts of practical difficulties (sell a European large-cap fund on one platform and want to put the money into a small-cap, which is in an ISA on a different platform, for example). I’ve learned, over the years, to put distinct sectors into distinct accounts, so that the investment moves inn or out of the same category.

@snowcat thanks for the heads up on the Fidelity SIPP offer.

Does anyone have practical experience of whether Fidelity SIPP account fees (£7.50 a month for ETFs) can be paid from cash within the SIPP (ie and can therefore get tax relief on the fees)?

It seems so from what’s written on the Fidelity website but would just like to confirm.

Many thanks in advance.

Just a quick question about fees, etc. I’m not a particular advocate for Trading212, although I now have a lot of money there now. I note that it now has the kudos of being included in the prestigious list on this page.

I’m just wondering why people would bang on about AJ Bell, etc., singing its praises re charges compared to the other more traditional brokers, … but fail to talk about T212 or InvestEngine. There’s no £42 p.a. charge at either, and T212 has a vast range of ETFs (no funds).

There are some aspects of it that displease me (e.g. you don’t get a proper PDF contract note, which really bugs me) but is there something I should know about it, which makes it sufficiently dodgy for people to exclude it from discussions here?

@Mike You are right that this form seems a little archaic since a few “one size fits all” platforms make the rest look pretty rubbish. The go-to options (without risk profiling) are: ISA/GIA – prosper.co.uk/IE/T212, SIPP – prosper.co.uk/IE/T212, LISA – “it depends”, Cash ISA/savings “it depends and is constantly changing”. While it is discussed, but isn’t in the table, are the risks associated with each platform. I can’t imagine @The Accumulator has any great desire to try and give platforms a risk rating since it would rely on a few arbitrary combinations of “profitability”, “age”, “assets under management”, “FCA / Companies House warnings”, etc.

@Accumulator “I’d rather my broker is based somewhere I vote.”

Me too… but in what sense is T212 not based somewhere you (or I vote), i.e. the UK? I am asking sincerely and want to know the answer, since you personally raise the question. I’m agnostic on T212 and fully prepared to take my money out if I can see some reason to worry.

The firm is registered with the FCA, https://register.fca.org.uk/s/firm?id=001b000000NMi1QAAT, where I see a UK company Trading 212 UK Limited, with a Companies House register number and entry (https://find-and-update.company-information.service.gov.uk/company/08590005) and a UK registered office address, 10-15 Queen Street, Aldermary House, London, England, EC4N 1TX. It apparently started in Bulgaria (of all places!) in 2004, and is big in the US (apparently “212” is the phone area code for Wall Street). It also appears to have been registered at one point in Cyprus (probably the most off-putting detail I’ve learnt about them). But they’ve been around for a very long time now.

Risks presumably relate to 2 types of assets: 1) cash 2) investments.

At any one time I don’t have much cash there, but have essentially no fears that up to £85k of CASH would be covered.

For investment money to be at risk, shares would have to not have been bought when it said they were. I don’t consider that a serious risk. It has been pointed out that it could take a VERY long time indeed if any investment company went belly-up before auditors came in and found out who owned what shares and paid out… and the auditors themselves would undoubtedly deduct eye-watering fees in this case, which the investors would end up paying. That would be my main area of concern. Arguably it could apply to any platform.

You say “all brokers need to make money”. People **say** (may not be true) that T212 is primarily focused on making money out of those foolish enough to go in for CFDs, “puts”, “stops”, “futures” and other exotic ways of tearing up £50 notes as a hobby.

Might you see fit to clarify your concerns?

@Mike – Here’s how I think of it. Businesses love recurring revenue. They’re prepared to offer a good deal to get it. Flat rates of £7.50 a month etc, that kind of thing.

A zero-fee model is relying on other sources of revenue. Some companies are doubtless transparent about where that’s coming from, some less so. It’s a balance of risks.

Here’s T212’s answer to the question:
https://helpcentre.trading212.com/hc/en-us/articles/360008682638-How-does-Trading-212-make-money

re: location. It’s just the standard pages:
https://www.trading212.com/about-us
https://www.trading212.com/money-protection

I haven’t taken the time to research where the bulk of any broker’s operations are based, except the ones I’ve personally committed cash to.

You rightly point out that all the standard protections apply. When it comes to your money, the only thing that counts is that you’re comfortable. I don’t have any special insight, I’m purely outlining some of the things I look for because they make me more comfortable. Comfortable, not right.