Broker comparison: cheap investment platforms UK

Good stuff

A couple of thoughts from a very quick look

1. Sippdeal

The platform fee applies per account. So if you are holding investments that attract the custody charge in both an ISA and trading account you pay the £12.50 per quarter twice. So the platform charge should be shown against the dealing account and ISA separately and not as an overall. I did query this with them (as I am transferring my ISA to them and it isn’t clear in their charges info) and they confirmed by email that the above is correct.

2. Hargreaves Lansdown
They charge per fund for transfer away by re-registration. Should the transfer column in general make a distinction between transferring away in specie or through transferring as cash?

3. I understand why you have put some brokers as post RDR but clearly things are going to change significantly post RDR. Best Invest have confirmed to me (and another MSE forumite) that they aren’t sure if they are going fixed platform fee or percentage platform fee post platform RDR; they are waiting for the FSA platform paper. HL also have a different charging structure planned post RDR but won’t reveal it until after the FSA platform paper. Should the title post RDR be changed to something else?

4. Fidelity Fundsnetwork are currently good for retail class HSBC trackers (so good for those with small portfolios) and because they don’t currently have fees to re-register away.

Worth noting that the Hargreaves Lansdown 1% Dividend Reinvestment Charge (min £10 max £50) applies to dividends from shares only. There is no charge for the reinvestment of dividends/interest distributions from funds (where income units are held).

@The accumulator

Thanks for the clarifications

HL charge £25 + VAT per holding to re-register away (nothing to transfer as cash).

http://www.hl.co.uk/investment-services/fund-and-share-account/faqs

(and scroll down to transferring investments).

Great information – thank you!

I was slightly surprised that iDealing wasn’t listed due to being too expensive – as they are my main broker, and I don’t think of them as expensive! (I left Selftrade when they introduced the inactivity fee, and unfortunately went to iii who did the same, so I left them and went to Fastrade, who are introducing a large inactivity fee later this year, though at least they are handling it well I think…)

iDealing website for share dealing costs are:
£5 per quarter “admin fee”, which at £20 a year works out a lot less than a lot of the others you’ve shown
£9.90 a trade, which is a lot less than a lot of the others you’ve shown
Transfer out £15 per item, which I think is pretty comparable, and cheaper than many
Closure £60 which is a nuisance, but again not excessive

So I was wondering why you felt iDealing was too expensive to list?
many thanks
Salilah
(no connection, just satisfied customer)

Re Selftrade: I would add to the ‘Good for’ column something like: ‘passive investing with regular contributions’.

I use them as my broker and since I adopt a ‘buy and hold’/passive approach, it is effectively free for me. To kill the inactivity fee I make about one trade per quarter, as my income allows further investment: sometimes that is a share, for which commission pretty much = the inactivity fee, and at other times it is an OEIC/unit trust for which there is no charge, even if I only add £50 to an existing holding. Even DRIP and planned regular investments also count as activity.

Hi, have you considered Guardian Shares? Its only £8 per trade, which is less than most mainstream brokers. I think the inactivity charges are low too
Thanks

This is a great resource, thanks. I have a feeling that you have quoted total prices (ie including VAT) in all cases. Is it worth explicitly mentioning this if you haven’t already? I queried this in my mind and had to go back to the Best Invest to check.

@ PI – yes, all prices in the table include VAT – it seemed easiest. There’s a little note about it under the tables .

@ Salilah – iDealing would go in the Share dealing brokers section but it is pricier than X-O or Simply Stockbroking – both for trading fees and platform fee. So I feel my original assessment was correct. They certainly beat many of the brokers in the rest of the table for share dealing but those brokers offer a broader service. Regardless, I’m certainly happy to drop iDealing in when I get a second wind. I had to draw the line somewhere to get the table finished first time around.

@ All – I’m away for the rest of the week but will attend to any updates early next week. Thanks again for pitching in, the feedback is much appreciated.

A great resource, will definitely be using this in the future!

In regards to the Hargreaves Lansdown ISA, surely the 0.5% charge will mean that platform fees with be greater than some of the other brokers, even if it is capped at £45? (I may be slightly confused here, I’m assuming the 0.5% refers to your entire portfolio holdings)

Also will my return be significantly impacted if I choose to go with the brokers that do not offer a 100% rebate on commission charges?

[follow-up].. I mean even though I would prefer automatic DRIP. It seems that since I can easily alter the regular investment orders, it is not really a big problem, just a little bit more work.

@ Gabor and Rob – have updated the table – thanks for your sleuthing.

Shouldn’t the fee for TD’s ISA read
“£0 if ISA worth £5100+ or has a regular investing facility”
rather than
“£0 if ISA worth £5100+ and has a regular investing facility”
?

Regarding TD’s ISA admin fee. I think it would be very useful if someone (The Accumulator?) could get TD Direct to be more explicit on their website about whether fees are waived if a regular investing facility is setup. When I signed up to TD Direct last year, most websites (including Monevator) and TD Direct’s website said it was. As recently as the 13th December 2012 I received an email from TD Direct about the new Rates and Charges from February 2013 stating:
No changes to our ISA and SIPP fees
Our ISA Administration Fee remains unchanged and continues to be waived if you:
* Have a balance in your ISA of £5,100 or more or
* Have a regular investing facility set up on the ISA.
Our TD SIPP Administration Fee remains unchanged at 0.25% of the value of the SIPP every 6 months (subject to a maximum of £100).
If they are introducing a £30+VAT charge by dropping ‘or’, I and other small investors are going to be very annoyed. If their intention is not to charge regular investors and admin fee, then they need to include ‘or’ in their wording on their website and in their PDF documents.

On the TD Direct fees I received the following response from their support team today (5 March 2013)…. any clearer? ha!

Thank you for your recent enquiry, it is sufficient to just have a balance of £5,100 or more within the ISA to be exempt from administration fees, it is not compulsory to have the regular investment facility set up, however having the regular investment facility on its own would not exempt you from the admin fees.

P.S. I’m definitely keeping that email as proof!

Perhaps they should just publish the computer program that decides what the fee will be. On second thoughts…

I’m amazed and frustrated that the retail platform industry is or appears to be so utterly shambolic. As regards TD Direct I emailed them about fees relating to their regular investment account at the end of January, which can be held in an ISA wrapper or outside an ISA wrapper, stating that their literature shows account balance limits for ISA and trading accounts but also says clearly there is no such charge or limits for regular investment accounts, so could they confirm that I was right in thinking a regular investment account (ISA or not) does not incur any platform fee regardless of balance (this was prior to the 0.35% charge coming in August being announced).

Their response.. “You are correct. The regular investment account does not have a account administration fee regardless of the value of the account.” 27th January 2013

Accumulator,

This broker comparison (along with the rest of your sterling body of work on Monevator!) is an invaluable resource – thank you for preparing and sharing it.

I was intrigued by note 18 relating to the ability to buy certain ETFs outside an ISA without incurring dealing costs through Cavendish Online: surely too good to be true? And alas, so it would appear: upon further investigation, it appears that there is an embedded 0.1% ETF dealing fee applied to every ETF transaction by FundsNetwork’s third party broker. According to P5 of “Doing Business with FundsNetwork”, the fee is built into the price and deducted by the broker at the time of the trade, meaning that you are purchasing your ETF shares at a slightly higher price than the market (or selling at a lower price).

This is not necessarily a bad thing: regular investments below £1,500 a time into an ETF via Cavendish/FundsNetwork are more economical than the same investments made via the best regular investment option (£1.50/purchase) at other brokers; however, for larger regular investments or any substantial lump sums, then Cavendish is more expensive. As a further sting in the tail, selling down a substantial stash built up with Cavendish would be pricey versus other brokers charging a fixed fee per trade.

Forgive my confusion, what TD custody fees?

I use TD Direct amongst others, I hold Vanguard there and they are only good at the moment, unbeatable in fact since it’s free. Come August 2013 there will be an additional 0.35% platform charge slapped on all non commission paying funds which is only five months away and will be my cue to look elsewhere shortly before then.

@ Ski – thanks for the nod on the HL paper. Also consider Sippdeal and iWeb for ETF portfolios.

@Steve – more evidence for the case against Fidelity!

The embedded dealing fees for ETFs were enough to put me off considering using Cavendish/Fidelity for ETFs, and the chunky service fees that you’ve highlighted make it even less appealing – luckily a number of other brokers offer low cost (and a far more transparent!) service for ETFs, so I intend to stick with them ;o)

Sippdeal does not allow regular investments at £1.50 on Vanguard funds for example. Go to this sippdeal fund selector and pick vanguard uk accumulation funds
http://lt.morningstar.com/1c6qh1t6k9/fundquickrank/default.aspx

However, Alliance Trust, for example, (there may also be others, I haven’t checked) DOES allow regular investments at £1.50 into vanguard funds.

Thanks for this.

Is it a good idea to spread investments over more than one broker? Should I be worrying about credit and counterparty risk? (with the broker or custodian)

Actually it looks like TD Direct is protected by the UK FSCS.

From the TD Direct Web Site:

“Brokerage services provided by TD Direct Investing (Europe) Limited are protected by the UK Financial Services Compensation Scheme (“FSCS”). Eligible claimants are protected up to a maximum of £50,000 per claimant. Further information is available on the FSCS website at http://www.fscs.org.uk“

Great stuff.
Looks like Charles Stanley (sounds like a turf accountant) rather than TD Direct is going to work out best for my 5 – 6 k initial and 100 a month ongoing across the slow and steady portfolio.

I thought it was per broker but it’s a very good point. What do Charles Stanley themselves say? Also, I enquired with Charles Stanley about their minimum investment level. The member of staff wasn’t sure but eventually came back with a figure of £500. I must say I was shocked given that most brokers minimum is £50 per fund. Can anyone else confirm this? I’ve spoken to so many broker staff members in the past who’ve given me duff information that I’m never prepared to accept one source’s word for it.

Just out of interest, what is it about the top three on this list that makes them qualify for inclusion in the post-RDR list?

They still rely heavily on commission payments hidden in the AMC and then providing small rebate incentives to customers. BestInvest haven’t yet stated what they intend to do with the charging structure post-RDR and only charge an explicit fee for funds that don’t reward them with hidden commission.

Hi Accumulator,
I thought it was per broker too, but after getting contradictory answers from Halifax and Charles Stanley I had the bright idea of phoning the FSCS helpline directly to ask them. The answer surprised me, because it isn’t per broker!
Here’s a couple of examples: if you invest through 1 broker, say Halifax Stockbrokers in funds with 2 fund management companies, say, Vanguard and HSBC, then you are cover twice, because they said cover applies at the fund management company level, not the broker level. Alternatively if you invest through 2 brokers, Halifax and Charles Stanley, for example, but buy funds of only one fund management company, say, Vanguard, then you are only covered once. As I say, not what I expected. The FSCS said they look-through to where the money is being held, which is with the fund management group. They said the only exception to this was when the transaction was ‘in flight’, i.e. money was being handled by the broker until the moment it is invested, but from then on the cover applies at the fund management company level.
I share your dilemma about opening a new ISA, but at least Charles Stanley do allow transfers out at only £10 per stock, so it is not a huge error to correct if wrong. I’ll have to make sure I am not invested in the same fund management companies as I am with other brokers though.

Hi EQi, thanks very much for the update. That is very useful to know. I was recently looking at the BlackRock index tracker D series through Charles Stanley. Cheaper than Vanguard by OCF in many asset classes although there is a bid-ask spread because they are Unit Trusts. Could be a good alternative.

Stop press! Platform paper is out. Unit rebates can continue! It’s going to be an interesting 12 months or so.

Indeed. In addition to unit rebates, don’t forget that cash rebates of under £1 are still permitted (why? why add needless complication to admin systems?! Hopefully platforms won’t even bother entertaining those) and fund manager payments can continue to cover the costs of “advertising”, pricing errors and corporate actions. The former sounds like a loophole waiting to be exploited to me.

It might be worth pointing out on your very helpful chart above that TD Direct’s charges of 0.35% on all funds from August are PER ANNUM!, which surprised me. What that means, i think, is that if i want to invest say £100k in unit trusts or oeics and plan to stay in them for 10 years, that’s £350 pa, £3,500 over the period. Even if i just sit on them and don’t buy or sell another thing. Seems a bit pricey to me.

@ JS and Helford – thank you for updates. Have amended the table.

I think that Interactive Investor is “good for” more than just family accounts.

In fact, it will be cheaper than Alliance Trust Savings for almost anyone. The only person who would pay less at ATS is someone who meets ALL of the following conditions:

1 They only want an ISA account or an unwrapped dealing account, but not both.
and
2 They have no relatives (spouse, parents, siblings, children) who also want or have an account.
and
3 They will carry out fewer than three transactions per year.

Anyone who wants their own ISA account and an unwrapped dealing account will be paying £96 per year at ATS, compared with £80 at Interactive Investor.

And even someone who only wants an ISA account and makes three transactions per year will pay £85.50 per year at ATS, compared with £80 per year at Interactive Investor.

(I don’t think ATS has many funds that have lower AMCs or bigger rebates.)

Is £17,000 the right threshold for ATS? Charles Stanley would be £42.50 per year on a £17,000 portfolio, whereas with ATS even assuming you have just a single ISA or trading account and you don’t carry out any transactions, you will be paying £48 per year. ATS cannot beat Charles Stanley for any portfolio smaller than £19,200, or £38,400 if the portfolio is spread across an ISA and a trading account. Add a further £5000 for each fund transaction that you carry out each year. With a single account and 10 fund transactions, Charles Stanley is cheaper for portfolios up to £69,000.

Charles Stanley beats Interactive Investor for any portfolio up to £32,000 and up to 2 transactions per quarter. For each fund transaction in excess of two per quarter, add £4000 to the portfolio threshold.

Great work.

As a small (new) investor, the platform fees on my single Vanguard Life Strategy fund are a real nuisance and go against the ethos of cutting fees to the minimum.

Charles Stanley direct looks like a much better home for my money at present, thanks 🙂

Who are best brokers if one has to factor in charges if it costs to rebalance by selling?

With regard to regular investments, its worth noting that with ATS you can only use the £1.50 trade once a month, and only for the amount you have deposited via your monthly direct debit – so its not actually all that flexible (though of course you can change what you purchase every month). You can’t add money to your monthly dealing account from the other cash accounts (of which there seem to be a bewildering number) – so if you have any dividends to reinvest (not automatically), you will pay full whack.
I haven’t actually used other regular investment services, but since SippDeal only have one cash account, I asssume you can use any or all of that for a regular investment?

Also, when buying overseas stocks watch out for the forex loading.
As an example, TDDirect charge 2%.

So to buy £5000 of stock in a foreign currency, that’s £100 when buying, another £100 when selling and the trading charges on top.
Clearly the forex spread is the biggest single cost here.

Some providers (e.g. SIPPDeal have custody charges for Vanguard funds). Others appear to include this in their platform or management charges. Would be useful to see this added as a column if possible.

@ Luke – That threshold footnote currently sits with Charles Stanley.

@ Ivan – TD Direct have 2 dates every month for regular investing so it’s not as flexible as a standard trade. But that shouldn’t really matter to long-term investors and the cost reduction is well worth it.

@ Vanguardfan – very interesting info on the AT regular scheme. Their multi-account system is labyrinthine. TD just put divis straight into the cash portion of your account which you can funnel into a regular investment, so it’s very flexible. I think that’s a bit naughty of AT, especially as they charge a tenner to withdraw cash, so it’s not like you can avoid the charge by taking the divis out and then feeding them back in on your monthly direct debit.

@ KISS – you’ve got the Retail funds and the OCF or TER will be more like 0.28%. Halifax will have to change their model, but they don’t have to until 2016. I wouldn’t move until you know what Halifax are going to do.

@ Mike – all the various types of fee (custody fee, annual management fee, platform charge, inactivity fee etc) are all captured in the platform fee column.

Put IWeb under share dealing brokers. £25 opening fee, £5 a trade and no annual.

Feel like doing an overview of london listed index ETF’s? Basically the only way to do that is cross compare the dozen or so different providers by hand and then finding out the best one isn’t listed in London or is but with non-existent volume.

@ babs – forgot to say, the only reason SVS isn’t included is because I hadn’t heard of them until you mentioned them. I’ll add them in when I get a mo.

@ John – yes, dealing costs = buying and selling.

@ mucgoo – this may come reasonably close to what you’re after: http://monevator.com/low-cost-index-trackers/

@ John. – I disagree about iWeb. There’s plenty of funds there to put together a nice passive portfolio. HSBC, L&G, BlackRock, even DFA.

sippdeal’s regular investment costs £1.50 for shares and ETFs (where available), but is free for funds (where available).

whether a fund has regular investment is orthogonal to whether it incurs the custody charge. see the last 2 columns in their fund list: http://lt.morningstar.com/1c6qh1t6k9/fundquickrank/default.aspx e.g. vanguard funds all incur the custody charge, but are almost all available for regular investment.

transfer out of a SIPP costs £90, i think in addition to the £20 per holding: http://www.sippdeal.co.uk/Sipp/ChargesandRates/

SVS’s ISA at least used to only allow you to invest in FTSE350 shares; it now “allows you to invest in a wide range of ISA eligible stocks and shares listed in Sterling” – https://www.svssecurities.com/Default.aspx?tabid=395 – perhaps worth checking what that means?

OK. I found the information:

http://www.tddirectinvesting.co.uk/investment-choices/funds-unit-trusts-and-oeics/rdr-important-info/

It seems there is no way out of this. Please disregard my previous email!

Might also be worth making clear for charles stanley that the 0.35% charge is on funds AND shares/etfs.

Ie if you have a mixed portfolio of funds and individual shares you pay two lots of 0.35% – one on the funds and one on the shares, so 0.7% in total, so they dont look so good then.

Charles Stanley charge is .25%, right?

@john p – yes, my bad – it is 0.25%.

Main point still correct though.

@ Vanguardfan – any of the flat-rate clean class brokers are a good alternative. Especially Sippdeal if they offer your Vanguard LifeStrategy fund on a regular investment basis.

@ tonyoz – ETFs through a share-only broker – it comes down to how much you’ll trade. Those costs could quickly outstrip what you pay through a flat-rate broker, especially as LifeStrategy is a great way of minimising your trades. It even rebalances for you!

@ Dragon – I agree with Ivan. If I’ve got 50K of funds with Charlie Stanley then I’m paying 0.25% on that. If I’ve got 25K of funds and 25K of ETFs then I’m still paying 0.25% of 50K.

The slight wrinkle is that you’ve got to pay a £20 minimum on the share / ETF element, so if you’ve got less than 8K in that part of your portfolio then you would pay a bit over the odds.

@vanguardfan

If you are planning to invest £100,000 in a single Vanguard fund, then you could buy direct from Vanguard. I believe there are no extra charges, although I have never looked into it in depth, not being close to this level of investment myself!

Footnote will need amending, I’m sure you’ll see why.

I just want to correct my silly mistake above regarding CS, the £20/150 charges are annual, so the comparison I should have used was with 12 trades for the whole year costing £120 – making the trade/no fee tipping point double to £48,000

I just opened up a TD investing ISA. It has been a little difficult to get the direct debit set up but on the flip side it is nice that the call centre is in the UK and they are very helpful. Only thing is I set it up to buy Vanguard funds and it seems that they have removed all Vanguard funds from the regular investing facility. I also note that there is a £1.50 fee for fund purchases through the regular investment facility, although it does say on their website that there is no fee. I am getting a little confused by all of this as they do not seem to be clear about what their fees are.

John, thanks. Unfortunately I spoke to the TD team and they told me that the £1.50 charge was across both Shares and Funds (despite what it says on their website) and if I try and enter a fund on the regular investment it automatically charges me £1.50. I do not know if this is a new thing or not but really disappoints me as the whole reason I went with them is to avoid these charges. I checked the MSE website and everyone now seems only to access one vanguard EFT when searching for vanguard on the regular savings bit. I also find the website pretty flaky with multiple errors.

In the end as they have taken so long to set up my DD I have just invested manually in a vanguard lifestyle fund as I can now pay the minimum £500 and then you can top up with smaller amounts after that. I am already thinking of moving to another platform as I am pretty disappointed with the service and conflicting information that they are offering.

John
I agree, just like to know where I stand, which I do not feel like I do with TD. I actually initially signed up with Charles Stanley but they did not offer regular investments for the meagre amounts that I am currently contributing monthly so decided to change to TD. May change back in the near future! Thanks for the help.

@ Rob – Sometimes individual members of the frontline staff are misinformed. This has happened a fair bit with TD’s charges which are pretty complicated. You may get a different answer from someone else or if you email a query. We had to go to TD’s PR department for the definitive answer to one query as so many readers were being misinformed by confused staff. They can’t charge you differently from their published charges.

I’ve had problems in the past with the online portal recognising certain funds, but normally a quick phone call sorts it out and TD add the fund for you.

One interesting point about Bestinvest is that they do not charge a custody fee on the HSBC retail class trackers. This means paying 10 basis points higher AMC than the C class version, but it would save you £120 of custody fee per year if you hold through a SIPP, for instance. So, if your portfolio of HSBC trackers is smaller than £120,000, you would be better off with the retail class.

In contrast, SIPPdeal does charge a custody fee on both classes of HSBC trackers, so it would be a cheaper option for a portfolio of greater than £50,000, because you would save £50 of AMC a year by going for the C class, which is exactly equivalent to the custody charge.

Hi,

I’ve been having issues with TD also – they have problems with direct debits going to Santander accounts, I was able to work around this by using the old Alliance and Leicester sort code.

I’ve been trying to set up regular investment facility with Vanguard for months now – initially it would throw an error and I reported this to them, they said it was a known issue and no timescale for a fix (sound familiar?). Now it looks with their latest platform update they have removed all Vanguard funds from the regular investment facility (as a workaround for the error I guess).

I’m holding off adding any more significant sums to the TD platform as I’m not 100% happy and am looking to switch – Charles Stanley seems a good choice…

I’ve signed up for a Charles Stanley investment account – user interface isn’t as intuitive as TD and the regular investment option was quite hard to find (My Direct Accounts › Portfolio Valuation › Monthly Investing for anyone else looking)

The monthly investment facility is for funds only – no shares/ETP option like with TD

hi
i’m a relatively new investor.
we have 2 accounts (mine & wife) with alliance trust.
various funds (vanguard, aberdeen, hsbc, jupiter, blackrock, etc) in ISA and investment dealing accounts totaling about £60K.
we end up paying £48/quarter admin fees over these accounts (£12/quarter each account x 4).

is it worth me changing to a different platform (such as sippdeal or iweb) to try reduce my admin fees?
we’re long term investors (+10yrs) and don’t do much dealing other than investing in our ISA or investment accounts maybe 1 or 2 times a year over a couple of funds.

from what i understand most of the platforms that don’t have an admin fee will probably change to charging admin fees over the next few years, so maybe its not worth us changing platforms (since it will cost us a few hundred pounds in exit charges from alliance trust in any case!)?

any advice please?

thanks.

hi
thanks for the info.

after reading thru the comments & checking the web sites it seems to me that iii is the
clear winner for my investments funds.
for someone like me with £50K total investment who doesn’t trade heavily, you may
pay £80 total with iii or 0.35% (£175) with Clubfinance per year.
TD Direct would have been a good option since with > £15K there would have been no fees,
but the table states that they will be charging 0.35% on all funds after august (although i could’nt
find this fact on their website?).

so iii is clear winner? or am i missing something?

one thing i did’nt like about iii is the £25 to withdraw cash from the account (by cheque,
bank transfer or any method), i don’t think there is a way to avoid this?
but since i don’t make any regular withdrawls this is something i would have to put up with.

thanks.

While Sippdeal do offer a very good range of clean class trackers (HSBC, Vanguard, Black Rock, L&G) it doesn’t look like they offer the FULL range of Vanguard trackers.

The trackers that seem to be missing are Vanguard Emerging Markets, Vanguard Pacific exc Japan and Vanguard Japan.

This information is based on the Funds Universe list when you log into Sippdeal and search for Vanguard funds. I’m asssuming that is a full list of investable funds, but if it isn’t then this information could be wrong.

Hi Snowman,

I’ve found them in the Fund Quickrank under Vanguard Group (Ireland).

TD direct investing now have a minimum of £200 for regular investing on vangaurd regular investments. What they advertise on thier website appears to be completely different from what they actually offer. Disapointed and frustrated.

Massive “thank you” for putting this together – I’ve wasted a lot of time since leaving iii last year, and this table has made my life so much easier!

Can I suggest that you consider putting a donate button on this page – you’ll get at least one donation 🙂

Paul

Great summary, thanks for all the effort! I’m just getting into all this after spending a long time reading through all of the (excellent!) site, but I’m still a bit confused by a few things.

I’m interested in the Vanguard 80% lifestrategy Acc Fund, so I was comparing what it would cost to invest in this with a couple of different brokers, but the funds look different between HL and Charles Stanley: http://www.hl.co.uk/funds/fund-discounts,-prices–and–factsheets/search-results/v/vanguard-lifestrategy-80-equity-accumulation and https://www.charles-stanley-direct.co.uk/InvestmentSearch/ShowFundInformation?Sedol=B4PQW15&Isin=GB00B4PQW151 have the same name, but seem to be different prices?

The HL fund appears to have an initial charge as well, whereas the the Charles Stanley one doesn’t, and the CS fund has an extra 0.01% OCF – are these not something dictated by the fund, rather than by the broker?

I feel like I’ve missed something obvious!

Thanks 🙂

Thanks TimA, good spot!

I’ve started the process of converting my Cash ISA into a Stocks and Shares ISA with HL now, fingers crossed everything goes smoothly 🙂

Maybe http://www.evolvefp.com

This is also expensive in comparison with Vanguard, assuming you are using the HSBC GIC for trackers. With Vanguard, you can hold direct and as far as I know they do not charge anything for this and I have not heard any mention that this might change. Of course, the drawback is that the minimum investment in any Vanguard unit trust is £100,000. However, if you have this amount invested in the HSBC GIC, going direct to Vanguard might make sense. If you have, say, £20,000 invested in each of six different HSBC trackers, then you could not directly replicate this by going direct to Vanguard, but you could perhaps get something close to equivalent by buying one of the lifestyle trackers at Vanguard and therefore exceed the £100,000 threshold.

@ Snowman – thanks for the update. Not a great offer by any means. Looks like HSBC feel they can afford to charge a little premium for the brand name.

@ TB – you can invest in US distributed funds. Certainly ETFs by choosing a UK broker that allows you to invest in foreign equities. Some US brokers have a UK branch too, Charles Schwab comes to mind. Would be interesting to see how cheap those US TERs looked once you add in withholding tax and the expense of overseas trades. I haven’t looked at it closely, so it may well still work out. Also, there are certain US funds that have no equivalent over here, so there would be no other option if you really wanted them.

FYI, funds offered by Cavendish Online via Fidelity attract service fee of 0.25%, which puts them on par with Charles Stanley Direct.

BestInvest represents best option for funds’ portfolio with more than two holdings and in excess of £24,000 in value.

SIPP transfers on ATS are only £50, not £150 – see http://www.alliancetrustsavings.co.uk/forms-documents/fees-charges/SIPPF1005-04-13_SS_fees_new_accounts.pdf

Watch out for forex spread when dealing overseas.

TD Direct increased their spreads to 2%. So to buy & sell an overseas stock, that’s 4% gone on exchange rates.
This costs much more than the dealing fee !!

BRUCE, THE CHART IS RIGHT . FOR TRANSFERS FROM ALLIANCE TRUST THE CHARGE IS £150 NOT £50 RE-READ THE LINK ON THE CHART.
TRANSFERS IN ARE £50!!!!!!

Hi All – does anyone have any experience with Interactive Broker? I’ve narrowed my options for UK and foreign stock trading (avg 20 traders per year) down to Interactive Broker as 1st option followed by Saxo Bank and iWeb.

Appreciate any feedback or suggestions you may have about these 3 brokers for UK and Foreign US stock trading.

Thanks.

@ KaKTy3 & The Accumulator

I was looking at Cavendish online, my interpretation was that the 0.25% service fee *is* applied to funds as KaKTy3 mentions – but only the C class ones (I was looking at HSBC offerings specifically). This has the effect of making the TER for the equivalent C class and non C class index funds almost the same.

I would agree that this makes Cavendish online look very similar to Charles Stanley Direct in cost terms for C class funds.

Most of the platforms operating in the low cost market make an undisclosed charge against investor cash holdings – they simply nick the interest payable, in part or, often, in whole. Sippdeal/Sippcentre/AJ Bell is a major culprit, especially with Sipps – investors should ask what happens to the interest on cash and how much is being kept.

Investors should also be aware that the large brokers are only displaying the charges that they are required by the FCA to disclose; that does not mean they are disclosing everything. The easiest way to spot this, and to identify exactly what is being charged, is to look at the accounts of the broker. The biggest and best example is HL – take their recurring income revenue figure, divide it by the funds under management – what answer do you get? Is it 0.2%? Is it 0.3%? Or 0.5%?

A) Recurring Income £233,008,000
B) Assets under admin £36,400,000,000
C) Total investors 507,000
– Recurring income charge on Vantage = A/B= 0.64%
– Recurring income per investor = A/C = £459.58.13, or £38.30 per month.
(HL prelims 4 Sept 2013)

It’s 0.64% – now where does that come from, is it transparent and is it disclosed to the investor?

“I think “nick” is too strong a word, especially with my legal hat on”

Who owns the interest on a Sipp cash cash account?
This blog is debating the finessing of charges, (moving from ATS to Sippdeal? Really??) so the aggregated interest income should be disclosed – on an advisory relationship every penny of revenue is required to be reconciled back to the client – whether it’s £1 or £10? Sippcentre used to levy a charge of 0.3% on cash, now they just keep it whatever they can get, which is probably 0.3%. Hornbuckle Mitchell also use BoS for Sipp accounts and pay interest to the Sipp holders, so why doesn’t Andy Bell? Go check his accounts and decide for your self what’s reasonable for you – those profits are coming from somewhere.

@ Kiko – I believe the charge is capped at £45 at the account level not holding level. Don’t pick a broker for international trading though until you’ve read The International Investor: http://the-international-investor.com/international-stock-broker-list
This guy has looked into the subject in exhaustive detail. Interactive Broker looks good.

@ The Accumulator – Thank you very much. I might pick iDealing for US securities just because is the cheapest one that offers an ISA wrapper and for my UK stocks I would go with SVS Securities (no annual charge + very cheap trade rates). Would you agree with me or do you think is better to keep everything in one account? In a funny way having more than one account with more then one broker seems kind of diversification regarding brokers doesn’t it 🙂 if one of the brokers goes bust you are not left with nothing 🙂

Heads up re: Saxo Bank

They have just announced an inactivity fee of £25 per quarter.

Also: “New minimum ticket fee on UK stocks

Saxo Capital Markets UK Ltd will be implementing a new minimum ticket fee of £20.00 for trades in UK stocks. The percentage commission will remain the same at 0.1% of the trade value; however, if this value is not reached a flat fee of £20.00 will be applied.

This will not affect our CFD, FX, Options or Futures offering.

This change will be implemented for SIPP and ISA accounts.”

Isn’t H-L the cheapest SIPP option for one or two Vanguard LifeStrategy funds? I make it just £24 a year per fund compared to Best Invest’s £30 a quarter (£120 a year).

@ John – that HL price level won’t last. They will have to change to a proposition in line with the other clean class brokers in order to comply with the FCA’s RDR ruling. HL are in no rush though, they’ve publicly stated that they think it’s too their advantage to wait and see what the other brokers do.

Is that right?
Fidelity
Annual charge for funds in ISA 0£
Funds dealing fees 0£
Is there any hidden fees or am I not going to pay anything to Fidelity for holding my funds for me?
Please don’t tell me that they have to switch to clean funds and adjust their fees..

Update on Cavendish via Cofunds post RDR charges has appeared on their website (a representative of Cavendish posted on the MSE website to mention this).

http://www.cavendishonline.co.uk/investments/cofundscharges

Cavendish via Fidelity Fundsnetwork will for clean share classes be the 0.25% platform charge. Note there is no additional £45 platform charge for Cavendish investors.

http://www.cavendishonline.co.uk/investments/RDR

Note that the Cofunds £40 charge mentioned on that last page of that second link won’t apply after January 2014.

Legacy dirty funds already on Cavendish (via Fidelity or Cofunds) can remain on that basis for the time being it seems (but this will have to change by April 2016 at the latest due to the FCA rules). That could represent a temporary advantage for some DIY investors in going with Cavendish rather than Charles Stanley (Charles Stanley and the clean Cavendish via Fidelity route will both be being 0.25% so otherwise identical).

I’m currently a DIY investor with Fidelity Fundsnetwork NOT via Cavendish (although my ISA is with Sippdeal in clean share classes) and Fidelity have told me that the Fidelity Fundsnetwork 9th December changes are for advised business only, and that clean classes won’t be made available to DIY users of the platform at the moment (i.e. from 9th December). Couldn’t get any indication of Fidelity’s plans here otherwise for DIY investors, they are going to have to do something from April 2014 at the latest for new purchases.

My complete guess is that DIY investors on Fidelity Fundsnetwork will be subject to 0.25% + £45 on new fund purchases or switches after April 2014. So re-registering to Cavendish via Fidelity Fundsnetwork will be required to avoid the £45 component of the platform charge for new purchases after April 2014. All guesswork though.

@ John – no difference between trading and dealing, I use the words interchangeably. As the table says, CS cheapest for clean class portfolios below 20K. They don’t charge trading fees, so it makes absolutely no difference how often you trade. In the Sippdeal case, they do charge trading fees, so ideally you’ll put in as big a sum as you can every time you trade. In other words, a trading fee of £10 is 1% of £1000 but 10% of £1oo. 1% is a big cut but 10% is eye-watering. You’ll need to do the maths to see which is the best option for you, but if you do go with Sippdeal try and use their regular investment service (£1.50 a throw).

Sorry Accy,
Yes to regular investing option. Far cheaper than one off dealing charges.

Thanks Accy,
Still lining it all up. Presently looking at portfolio options – Swensen or Bernstein or some variation? With the 40k Sipp there’s more scope to spread. With a 5/6k ISA start up will prob look at keeping it to a life strategy fund or the slow & steady. £300 a quarter on regular investing for both. 15-18 yr timescale for both. Want to mobilise by April 2014!

If I have a share isa with TD and a starting amount at 5.1k and a regular investing option set up is there a .35% charge levied but not on etf’s? Also if I invest quarterly do I need to cancel regular investing each month until quarterly month. Ordinarily how does it work?

Thanks again Accy,
I feel closer already.

Well, you’d have to do the maths to know how quickly it would take you to recover your transfer fees. Brokers do occasionally run promotional deals offering to pay transfer fees – up to a few hundred quid usually. You have to keep an eye out for them though. 15 tickers for 10K… that’s complicated. Sounds like you could prune that back a bit.

The promo is unlikely to benefit existing account holders. And not every broker runs those deals. In fact I’ve only seen two, but I’m not exactly keeping an eye out. Two accounts a good idea? You need to work out the maths. Many investors run two accounts as an extra level of diversification. It’d probably take you years to transfer via rebalancing so I wouldn’t run two accounts on that basis. Better to work out what you want, what your ideal scenario is and see just how far off The Share Centre is. Then work out whether it’s worth taking the pain of the transfer. I’d work on simplifying your portfolio first and then see where you are.

So I did the math, and it turns out that for the cheap brokers, at 1.5GBP per ticker per month, the cost of regular investing is 270GBP per year! This is much more expensive than the 0.5% transaction fee for regular investing at The Share Centre.

I guess with the number of tickers I’m holding and my relatively low salary, it makes more sense to go with Share Centre than Alliance Trust/TD. I’m glad I did the calculations!

I am with TD but am about to transfer to Charles Stanley as they do exactly the same thing only for lower fees.

I’m also with Alliance Trust and have a SIPP with Sippdeal.

I just happened to be with brokers who switched to clean class early, I guess that’s because I largely chose Vanguard funds, so I’m not really stuck with a big RDR decision to make.