Broker comparison: cheap investment platforms UK

CSD are a high quality outfit, far more capable than most of dealing with anything but the most basic of tasks.

I have an IT income portfolio held with CSD which could be held cheaper elsewhere but which I have no intention of moving.

Advice from someone with a Fidelity sipp with etfs please? (Linda?)

I’ve just switched to Fidelity for my sipp and now have 1 etf and a small amount of cash. The switch has been a nightmare with lots of conflicting info from fidelity. Yesterday I was told that if I had ANY cash at all the whole amount is subject to a 0.2% charge and not just the cash element. Does anyone know if this is correct?
What they have told me to do is to “switch” the small cash element into etf units. (I didn’t know this but you can buy fractions of a unit to take the cash to £0.0). The fees are calculated on the first of the month and then later in the month they sell a minute amount to cover the monthly fraction of the £45 annual fee. Additionally if you have dividends you need to switch them so your balance is always zero cash at the beginning of the month.
It would be far simpler to leave a small amount of cash but as I say the latest advice I have from fidelity is not to as it triggers the 0.2% on the whole amount.
Anyone with any direct knowledge please?

Hi Jeff
Thanks for your comments. I agree with more or less everything but welcome to the confusing world of Fidelity, which is why I would like someone with actual experience to answer. Besides Fidelity giving you lots of conflicting information there are many odd things to my mind:
Following their instructions yesterday I used my small amount of cash to buy fractions of a unit to bring my cash balance to £0. When I bought it I couldn’t buy it “live” – their website can’t do this, so you put in an order and they buy the next day at an average of that day’s price (bit like a fund?). Didn’t know you could do either of those options.
If you read their terms it seems clear to me the £45 annual charge only applies to the etf and you would pay the % charge only on the cash. However the adviser was adamant that if there was any cash the whole amount would be charged. I’m sure this contravenes advertising rules but I’ve done what he suggests.
It seems they are in the midst of renewing their website/platform and fee structure, so I’m just going to bear with it for now.

@Stephen Watson

Logged into my account to check. As far as I can see there is no charge for keeping cash in your SIPP account. I have a note on my diary to remind me to check that there is £45 in the account each year. I looked at my transaction record for this financial year and up to 2nd Sept I have paid £17.15 in fees which is about right as there are 7 months to go. They also appear to pay me a small amount of interest on the cash, as an interest amount of between £0.01 & £0.10 is paid in every month a couple of days after the fee comes out, . Their fee page states that ETFS & Investment Trusts fees are capped at £45 and there are no fees on SIPPs for anything else as far as I can see. The website is a nightmare & when you phone up they don’t seem to kmow the answers to your questions. They have a dedicated Pensions team so make sure you speak to them when you phone & not the investment guys. Reinvesting your spare cash is a challenge & I have it all written down how to navigate the site to do this, after speaking to the pensions team.

@Stephen Watson

Just log in to your account, go to My Accounts/Transaction History & Reports/Transaction History & you should get a report for the last 30 days. On my report for this period there is one fee and one tiny interest payment. Remember when you phone to make sure you speak to the Pensions team, pretty sure you have been given info that only applies to investing.

@Stephen Watson
I suspect that the differences between us may be the amount in our respective SIPPs. Do a google search for Fidelity SIPP Key Features Document. Pages 7 & 8 should clarify things. Also, I don’t have any ordinary funds in my SIPP, only an etf & an investment trust.

Hi random question iWeb are quoting a 0.5% transaction charge – is this common? Can i ask is this on top of the £5 fee for buying funds for iWeb? Or is this like an internal fund fee that the fund itself takes from profit? just wondering if i need to take it into account to pay it every year with cash on hand?

@ed Take a look at the iWeb charges factsheet link and it shows you examples of buying funds or ETFs. You don’t pay 0.5% stamp duty on funds or ETFs, but it looks like iWeb charges you 0.5% to buy or sell them, in addition to the £5 per trade. Every year you also will pay the ongoing charge of the fund itself, but that will be deducted from the price of the fund/shares so you don’t need extra cash in your account to pay this.

I also noticed this 0.5% mentioned on the iWeb website when buying funds recently. Apparently it is not a new charge but is something they are now disclosing to customers. The amount depends on the fund and the 0.5% is just a typical amount. When I called them they said you need to ask the Fund Manager for the actual amount. From a quick search I think this is related to MiFID II which requires investment managers to disclose additional transaction costs that are charged to their funds, separately from the ongoing charges figure.

Vanguard have produced a document which shows you these transaction charges here:

https://www.vanguardinvestor.co.uk/content/documents/legal/vanguard-full-fund-costs-and-charges-2018.pdf

As an example, on the Lifestrategy funds this is an additional 0.08% to 0.13% on top of the 0.22% ongoing charge.

I don’t think this charge is unique to iWeb, it would be the same through any broker as it is charged within the fund? It’s just iWeb are now displaying it when place an order.

@JeffB

I’m not sure about the meaning of this 0.5% funds transaction charge listed in the pdf.

I’ve got an iweb ISA with one fund. I’ve had it for 18m and done two transactions near to inception (sell all LGUKIA and buy LGBTIA with the entire proceeds). It’s got 40k+ and I don’t see transaction charges for ~£400. I’m not disputing the pdf however it doesn’t seem to be specific charge made by iWeb.

I think you all could be right, although the factsheet examples make it look like a separate charge… They describe the transation fee of 0.5% as “based on industry averge”. This seems very high to me, but perhaps they know something we don’t… Vanguard are about the only people so far to have released their transaction charges and they are a lot lower than this, but of course there are at the cheapest end of the market. I’m sure active funds will charge at least that much. I guess it’s a way of being up front about hidden charges, but being clear as mud about it.

Immediately before the 0.5% transaction cost, the factsheet says:
“If you invest in a fund, you will also pay …transaction costs to the fund manager each year for … buying and selling assets within the fund. This is taken from the value of the fund and the exact amount is listed in each fund’s documentation.”

I think this makes it clear. They are just saying that when the fund receives your cash they invest it and this means they incur transaction costs which are typically 0.5%, because if they buy UK equities or bonds stamp duty is 0.5%.

The examples are confusing, because they do not clearly distinguish between the charges levied by iWeb as opposed to the fund.

Regarding 0.5% transaction charges, Halifax Share Dealing also show a similar message on their dealing page although it’s a little clearer than iWeb by the sounds of it:

“Transaction cost : 0.5%
We don’t have the exact transaction cost for this fund, so have used an industry average of 0.5%.”

This refers to the ongoing charge associated with the fund. I’m not actually paying 0.5% OCF: I pay what’s listed on the Vanguard factsheet. Slightly odd that they call it a ‘transaction’ cost, but I do not see an extra 0.5% in broker fees. Like others before me I assume the reason this is displayed must be related to regulations, but I questions how useful it is to show ‘imaginary’ costs in place of actual costs.

I’m considering transferring my ISA from CSD to iWeb due to fees. I have experience of both already (my ISA is with CSD; my wife’s is with iWeb). I have already paid money into the CSD ISA this year, so will need to transfer the whole amount to iWeb if I go through with this.
What happens about adding funds while an “in specie” transfer is in progress? Can I add funds to the new iWeb ISA once I’ve requested the transfer to start, or do I have to wait until the transfer has completed?

Re: Cavendish@TA
Cavendish ISA was my first account after reading this blog.My account has now good amount of money and it’s all due to monevator.I have moved it to iweb this year as fees was being deducted from the sale of investments.The cavendish account holders use the fidelity website .The only difference is the fees which is lower than fidelity for smaller amounts.The minimum amount was 50 gbp via monthly savings plan (regular investments).The platform allows to change the funds, sell investments,hold cash and change/cancel monthly payments easily every month .If you want to buy outside the monthly savings with cash then the minimum amount was i think 800 or 1000 gbp .The etf’s available are not the gbp one and either they were in usd or euro denomination.I believe this way they make the commission in exchange rate.
I have recently opened fidelity sipp as well to transfer the bestinvest sipp( small amount) .The fidelity may contribute towards the bestinvest leaving fees.This offer is not available through cavendish .

As i read all terms before i sign up to any service and glad i did as if you want dividend income paid into your bank account with X-O this is only paid out 4 times a year (after you ask by email)!! with HL its ok ish 12 times a year and with IWEB its within days of each and every dividend just something to bear in mind if and when you do want income

Perhaps slightly off-topic, but what are people’s thoughts on Hargreaves Lansdown’s new Active Savings offering?

I’m already a HL customer wanting a fixed rate savings account, and am wondering if there is any reason *not* to use this as a platform to open a fixed rate account (assuming the rate can’t be beaten elsewhere).

My motivation: to avoid going through the process of YET ANOTHER application with an external organisation.

@Jonny HL savings is a good idea they are adding instant access accounts soon and more banks maybe signing up

Alliance Trust Savings has been purchased by Interactive Investor, so expect future changes to platform charges in the coming months if this goes ahead.

http://www.alliancetrustsavings.co.uk/investment-news/change-of-ownership-for-alliance-trust-savings.html

It is a worry, because they are getting close to being monopoly suppliers of fixed fee platform services. I suspect we will see fees jump higher.

And it is getting harder to diversify holdings across different platforms, whilst avoiding the percentage fee brokers.

On the other hand, I suspect scale is needed in order for these platforms to become profitable, so perhaps it would be better to have one big fixed fee platform that is profitable, rather than several that all go bust because they are too small.

@Neverland
I agree that ATS customers should be concerned that the II takeover could mean poorer service.

I guess it depends on what JC Flowers’ business plan is. They are throwing a lot of money at II, and they presumably hope to get a good return on their investment. That won’t happen if II provide such poor service that many of the customers they are expensively buying (GBP345 per customer) decide to switch to other platforms. So, if they have any sense, they should be making sure that II make big improvements in their service levels.

…Or perhaps they are just relying on inertia meaning they will keep most customers, regardless of poor service.

@linda. Presumably someone answered your question regarding Fidelity. They charge 0.25% on cash in a sipp. I asked them this sometime ago. I switched away.

@MrOptimistic Never been charged fees on the cash. Fidelity used to pay a small amount of interest on the cash but wrote to me a couple of weeks ago to say that they would no longer be paying interest on it. I keep just enough in my account to pay the fees so that they don’t have to sell any of my investments to pay them. Do a google search for ‘Fidelity SIPP Key Features Document’. Pages 7 & 8 should clarify things. Also, I don’t have any ordinary funds in my SIPP, only an etf & an investment trust.

Wow, that’s a bold move from II. Let’s hope it is a sign that they intend to make sure their service is so good that no-one wants to leave them.

My dad has an HSBC InvestDirect+ account, including a sharedealing account and an ISA. The main for using HSBC was so that he could qualify for HSBC Premier current accounts in both the US and UK, (for transferring US pension pensions automatically to the UK). However, it is also a fairly good low cost platform for holding UK shares and gilts. The platform and interface is very basic, but costs are just £10.50 quarterly for the sharedealing account (nothing extra for the ISA) and £10.50 per trade. Quarterly charges are taken from the non-ISA cash account. Trades are executed well and dividends paid quickly. Gilts cost an insane £39.95 per trade, so only good for very long term buy & hold. You can trade US shares, but he doesn’t do that because he has a US trading account (Charles Schwab) for that. It says you can trade “most” UK exchange-traded funds, but no OEIC/unit trust funds. I’m pretty sure you cannot trade ETCs (e.g. iShares Physical Gold). Like I said, we’re only really there because of access to a Premier account, but actually I would say it is competitive with other platforms if you are only trading shares and possibly for ETFs (but I don’t have personal experience of this).

Info on HSBC ETFs can be found here: https://www.etf.hsbc.com/etf/uk/retail

@Tyro regarding detailed info on HSBC ETFs. Yes, I agree that a dividend schedule appears to be missing, but to be honest there are a lot of other ETF providers that are also lacking in this regard. I keep a spreadsheet of my investments which records the last dividend paid and the projected date of the next one (annual, bi-annual, quarterly) so that I can keep an eye out for them. It you are starting a new investment you can start with th It’s usually only off by a few days or so. The ex-div dates are irrelevant due to the natural price effect on that date. Unfortunately I don’t think dividend aggregator sites like DividendMax do not cover ETFs. However, you can search for your ETF on hl.co.uk to see when the last divi was paid and how often they are typically paid. This will not cover special dividends, but these pretty never occur for ETFs.

That’s brilliant! I use JustETF all the time but didn’t realise they provided dividend schedules (by the month, not the actual dates). Thanks.

When accessing ETF providers’ sites, to get all the basic information you need for selecting and tracking your ETF investments I find you need to pretend to be a professional. I guess they assume private investors are just too plain dumb to understand complex terms such as “dividend”. Clearly they’ve never met anyone who visits this site.
For HSBC the link is here: http://www.etf.hsbc.com/etf/uk/professional
Select your ETF then click the “Dividend information” tab to see the most recently declared dividend and and previous. Most of the other ETF providers give more historical information, but again only if you click to confirm that you are a professional.
P.S. If their lawyers come asking, you did not hear this from me!

@Ric – ah – have just noticed you wrote ‘most recently declared dividend’ (I misread it as ‘most recent dividend’ ….) yes, that would be useful, thanks, though still not as useful as the schedule I am hankering for. Incidentally I’ve just remembered that iShares puts out a schedule as well as Vanguard. I repeat, pull your finger out, HSBC!

In view of the recent insolvency situation at Beaufort, and the ongoing risk with any future broker insolvency, and the provisions of Rule 135 of the Special Administration Rules – does anybody know which Brokers/Platforms are willing to offer Sponsored Membership of Crest

Interactive Investor removed their exit fees last month https://media-prod.ii.co.uk/s3fs-public/pdfs/rates_and_charges_uk.pdf

Regarding personal Crest membership within a SIPP, yes, that’s my understanding also. However, I’m not aware of any “low-cost” SIPP providers that offer co-trustee status. I imagine this is only likely to be available through a “full SIPP”, such as one that allows you to hold commercial property with the SIPP. I know Sharesoc and others are fighting for personal Crest membership and better shareholder rights, but I don’t this changing any time soon. The low-cost providers don’t what the extra admin costs and the high-end providers are happy to charge an arm and leg for the “priviledge”.

Hi

Have you seen the new broker, Freetrade? £0 trading (if executed end of day) otherwise dealing charge of £1; no platform/subscription fees (if you don’t mind not having an ISA).

They are new and so still adding functionality but they cover UK stocks and recently started adding US stocks.

Yes I am biased as i have been using them since September 2018 – but i just buy ETF’s monthly using their £0 end of day trade and so far so excellent.

Their range of ETF is certainly growing but for me as a new starter I decided to stick with just 3, FTSE100, UK Dividend and MSCI World, all iShares. I just want to add to them monthly and didn’t want to worry about cherry picking.

I picked an awesome time to start, September 2018 just as markets started going down, at worst I think I was about 11% down but now I am about 2% down overall. I just keep pumping the money in regardless and because they have £0 fees all my cash is invested.

I know I sound like an advert but that is because I always wanted a broker that I could justify slipping in £20 when I had some spare change and not see it eaten by fees, now I can and so I am an advocate.

@stephen @the accumulator
I’m also a big fan of Freetrade (and for disclosure: small investor in). End of day trades are free. ISA has just been added and I think will be charged at £3/month from April. No mutual funds I think but stocks and ETFs, so would qualify as “restricted range” in Monevator’s table – but they have a decent selection for passive fans: IWDG, VWRL etc. They’re now adding US stocks. The app is mobile only, which may freak some people out, but it is *much* easy to use than some of the cheap platforms Monevator-fans are using.

When they add SIPP and ISA transfers, I will probably move things from iWeb and Interactive Investor.

I agree that you need to take the platform’s business model into account when choosing who to go with. Are they going to make money by encouraging people to trade frequently, or cross sell other services, currency fees, annual fees, total asset fees, or what? I think both the established players and the newcomers are going to struggle if people just stick to trading shares or ETFs infrequently, as there’s virutally no money in it for them. Beaufort was definitely a shock and a problem that has not gone away…

I have a Trust account holding investments for my Grandchildren with Alliance Trust Savings. There are no distributions or need to register with HMRC and therefore I suppose little work.

However the fees are 3x a personal account. Are there cheaper places to have a trust account? HL suggest the fees are the same as a personal account.

I am tempted to swear “OMG f*****h*ll”, has this site become a game of ‘guess who’? I, for one do indeed know which is also best for me, BUT why doesn’t this site simply put each into a league table? -there is only ONE winner ! (and that same winner would be 1st if you then created a premier league !) Maths is easy !

@Linda. Sorry just saw your post. I moved from a Fidelity SIPP for other reasons but I checked with them first. The 0.35% portfolio charge (SIPP) is on the total value including uninvested cash. I complained that this wasn’t quite up to their claims of transparency but….the key phrase is total portfolio value.

Are any SIPPs known with more than the £50k FSCS protection? I’m looking to move a fairly substantial aviva stakeholder pension to a new home (drawdown to start in 5-10yrs). Any thoughts?

I believe Interactive Investors are taking o we Alliance Trust Savings so perhaps a note on this ( apologies if I missed it).
What I have found, using Alliance, II, Halifax, HL and Fidelity, is the differences in what they offer by way of investment choices. Trouble is that this isn’t easy to judge as you can’t predict what you may want by way of a fund or ETF in the future. Alliance is a bit limited so I am hoping II broaden the range. HL seem the most expansive but are also expensive if you hold funds.

I’ve invested directly with Vanguard since 2015 and I transferred onto their online platform when it became available in 2017, and I have experienced excellent service without any errors. The online system has been available each time I needed it, the regular reports are issued on time and have been accurate and when I have telephoned them, they have been available without any lengthy wait. I’d rate them on a par with the service I receive from Hargreaves Lansdown.

Iweb charges £5/transaction so depending on how often you buy, there’s a tradeoff.

You can always use Vanguard ISA for purchases and then on a periodical basis, say yearly, transfer the holding to iWeb ISA. Easy to dona cost/benefit analysis.

A quick glance across the Atlantic strongly suggests it’s the latter (most other platforms ripping people off)

I’ve been read through a number of comparison reports on various sites and have yet to see any article mention SVS. I’ve been using them for a few years now and happy enough with their service (though admittedly I’ve no other experience to make a comparison). After what happened to Beaufort I’m worried that they’re not established enough and my assets might be at risk. Anyone have any views on them? Thanks

I use Degiro for non ISA stocks as they are cheap and have a good choice of international stocks. I am considering an ISA with SAXO as they have access to a lot of international markets but are more expensive. Anyone had any experience with SAXO?

@Ph8l, correct, although if you want somehere really cheap for holding shares, iWeb costs nothing per year (£25 to open account) and only £5 to trade.

@ Ph81 – yes, very cheap. I hold only shares and investment trusts, plus the odd etf and pay £45 pa on well over £1m-worth of holdings.

@Paul You’re correct, thats why the SIPP fee is listed as “+ £120”, its in addition to the top level price of £90 which applies to the entire platform. There is only one £90 fee if you hold more than one account with them.

@Gally, it may depend on the terms of the trust so you may need legal advice, but assuming you are the trustee you may be able to move the account to a lower cost share dealing platform. I know AJ Bell do bare trust accounts for children, so I’m sure others will also. https://www.youinvest.co.uk/investing-for-children/dealing-accounts-for-children

It is a discretionary Trust. I want the trustees to control distributions under the terms of the trust to Grandchildren. Other forms of trust are not appropriate.

My account is with ATS who argue when increasing fees that there is more work to do. I would agree for an active and registered trust. This one is dormant and will be so for some time. I could switch from funds to ETF’s but the fixed costs I am looking to reduce are the account fees. There is about 80k in the account now considerably more on death. The trust is intended to help with my grandchildren’s life’s events, education, marriage, house children etc. after my death. So I am looking to reduce account fees and maintenance costs over many years.

I’ve managed the investments of two discretionary trusts through Sharedeal / Jarvis for many years without incurring any ongoing fees, paying only the normal trading fees. All investments are in ETF’s as these can be traded on line through the usual platform. I understand that you need to telephone them to make investments in funds. Both trusts are registered with HMRC and pay tax twice each year, with tax returns submitted ever year.

Hi, I would like to open my first S&S ISA before the new (2019/20) tax year to secure the balance of my ISA allowance for the current (2018/19) tax year. I’ve already contributed to a HTB ISA this tax year. I will look to transfer previous Cash ISAs to this new S&S ISA as well and contribute my ISA allowance for the coming tax year (minus what I will be contributing to the HTB ISA). All in all this will just be shy of £100k. Because of this sum I understand I should look to flat fee brokers. Excuse my ignorance but I assume the share dealing broker table do not provide ISAs. If I interpret the tables above correctly then iWeb would be be the cheapest broker for me. Is that correct?

I’m pretty sure it is not “+0.25%” for a YouInvest SIPP, it is simply 0.25%.

So if you have £40k or more of ETFs you pay £100, no more.

You can check this by filling info in here: https://www.youinvest.co.uk/charges-and-rates

I have a niggling worry about a broker going under so plan to build up ISAs in multiple companies with the intention of keeping each holding under £75k.
If I put money into all of IWeb, Halifax and Lloyd’s am I wasting my time?
I read somewhere that Halifax and Lloyd’s have separate banking licenses.

Interactive Investor have just announced that instead of £22.50 per quarter, they are bringing in three service plans depending on how often you trade. Costs are now between £9.99 per month and £19.99 per month plus trading fees. For full details see
https://www.ii.co.uk/service-plans/super-investor/all-plans

Unfortunately Interactive Investor is changing their charging structure from June 2019, the lowest price option will be £9.99 per month and trading credit will only last 90 days. At least they don’t charge you to leave as it looks like that’s probably what I’ll be doing now.

https://www.ii.co.uk/service-plans/investor/all-plans?utm_source=IBMW&utm_medium=email&utm_campaign=ii_Investor%20Test%20Batch%203_100419&utm_content=&spMailingID=5666888&spUserID=MjA3MDYxMjA1OTM5S0&spJobID=1250799850&spReportId=MTI1MDc5OTg1MAS2

@David Graham
Confusingly, IWeb Share Dealing, Halifax Share Dealing and Lloyds Bank Direct Investments (and Bank of Scotland Share Dealing) are all part of “Halifax Share Dealing Limited”, so all come under the same £85k (now, or soon) limit. Unlike retail banking, where Lloyds and HBOS (Halifax – Bank of Scotland) have separate banking licences. (And even after reading the T&Cs and websites, I’m not 100% sure whether the combined share-dealing operation comes under the overall Lloyds licence or the overall HBOS licence.) Worth reading this (but for £50k read £85k): https://monevator.com/investor-compensation-scheme/ (and take note of the Vanguard stuff).
Personally, I don’t want all my eggs in _one_ basket, but I don’t feel the need for multiple £85k baskets. I’m more worried about website screw-ups making my funds temporarily inaccessible than a complete platform meltdown leaving me to fall back on FSCS compensation.

Does anyone have any experience of Alliance Trust Savings? They now appear to be on of the main competitors to iWeb/Halifax/Lloyds for fixed fee brokers. But there are certainly a few reports online suggesting there may be some problems.

Is standard life self invest any good for isa savings ?

Just a heads-up, Interactive Investor are changing their fee structure from 1st June. The cheapest plan will now be £9.99 per month (up from £22.50/quarter).

https://www.ii.co.uk/service-plans/investor/all-plans

Interactive investor have put the charges up recently. And changed the pricing structure a little bit.

never used Trading 212 seems more of a CFD Broker,i have used FreeTrade which is ok as well as HL and AJ BELL

Check out the FT article “Free trading apps — investment freedom or false economy?” which is linked to in the latest Monevator newsletter: https://bit.ly/2Usz7EY

@Neverland Whilst an interesting fact, I don’t see how their PE fund’s management 7 years ago has anything to do with their operation today? PE companies don’t have access or control to that level of companies they own.

In my limited experience of II’s support they’ve been fine. Although their platform does have irritating missing basic features – like being unable to send notification of dividends received and rounding on their export so its inconsistent with reality.

Is there a reason you’ve missed Freetrade broker? They’re my first experience with buying individual stocks as other brokers were all cost prohibitive. They have fee-free trading, I haven’t paid any commission. I use Vanguard for index funds, but I don’t believe there is a better offer for individual funds.

Freetrade pricing here: https://freetrade.io/pricing

Yes, sorry I meant Vanguard funds.

Thanks for your sterling efforts on this, as ever. One thing you might want to either do (or, perhaps better for your sanity, get the readership to do) is review the useability of the above platforms. I suspect a lot of people stay with HL and its eye-watering costs because it has a fantastic interface, allowing all sorts of analysis and ease of trading (eg, saying what you want to sell AND what you want to buy with the proceeds in one go, rather than go through the rigmarole of selling, waiting for the dosh to appear in your cash account days later, then buying your new assets).
On the other hand, the Charles Stanley Direct interface is utterly awful. Simply telling how well you’re doing is hard, because of the hopeless and largely unchangeable tabular presentation of quantities related to the asset. It demands that you sell in share units, but buy in cash amounts, and the portfolio analysis features are laughable. I’ve a legacy account with them with a few bob in which I rarely touch. But as soon as I can be arsed, I shall sell the lot and bung it to AJBell – which are really pretty good.

Does anybody know of a reasonably priced broker or platform who will accept accounts for:
1) Non UK resident SIPP trading account/trustee trading account (Isle of Man QROPS SIPP)
2) Non UK resident company account (Isle of Man registered Investment company).
Most if not all of the brokers on the Broker Comparison List are not willing to open such accounts.

Many thanks

@Sparschwein. iWeb is certainly not alone in having a high currency exchange fee. I wasn’t aware that you could buy US domiciled funds through Vanguard UK. https://www.vanguardinvestor.co.uk/need-help/answer/why-cant-i-invest-in-vanguards-us-domiciled-funds. Watch out for “non-reporting” international funds.

The ISA wrapper should hopefully restrict you to reporting funds anyway, but worth checking if you are looking at obscure overseas funds. AJ Bell have recently lowered currency charges to 1.00% (!), same as Hargreaves, lower fees for (very) large orders. With HSBC InvestDirect Plus you can have a US Dollar cash account. I’m not sure what rate you get for moving cash in and out of it though. Also, I’m not sure what ETFs are open to you (no funds). Even Interactive Brokers I think costs 1% to deposit cash ($50 minimum). Personally I’ve still got issues within an ISA because I’m a dual US/UK citizen, but that’s a whole other story!

My ISA this year is with Trading 212 – free share dealing and FSCS protection. The range of shares and ETFs is limited – particularly investment trusts – but there’s enough there to make it workable.

@londoninvestor,

True, but each free trade expires after 90 days. Previously, ii’s £22.50 quarterly charges were valid as free commission up to a max £90, so 12 months. Under ii’s current price structure (which changes 1st June) one might have done nothing but hold for over 11 months, then still redeem all charges over subsequent weeks. Now in a protracted market downturn where investors & traders may wish to do little more than hold, it’ll cost ii’s less active clients significantly more.

Occasionally, severe market downturns can last for well over a year. For holders only, that’ll cost almost £120 a year with ii’ new minimum charges. Just a few years like that & costs mount up. Compare that with Hargreaves Lansdown if holding a regular share account, or discount brokers like iWeb & X-O. Zero added charges.

I see no justification for ii’s latest price hike. Their service is no better. No surprise if they see another exodus of less active clients with this ill-judged move.

Rodcorp,

I agree. Unless one has surplus free cash to keep trading most months, for many ii customers the new tiered pricing structure needs careful consideration. Someone like me may trade a few times some months, but then do nothing but hold for well over 6 months other times. That’s happened a few times due to unfavourable economic macro-factors.

To get a clear benefit from these changes one needs to trade at least twice monthly. That’d cost £17.98 from 1st June instead of £20 now, as ii will drop commission from £10 to £7.99. So: we pay £9.99 monthly charge, use one commission-free trade & pay £7.99 for another = £17.98. That’s fine, but only as long as one is active most months.

I suspect that many ii customers are investors who only occasionally add to or reduce their positions. Many have investments of well under £50K. Under ii’s new price hikes they will be net losers. Over a few years they’ll be a significant 3-figure sum poorer, with no improvement in service. IMO, these changes are another own goal by ii.

PeteA,

Indeed. Via ii’s site, one can change to a higher-priced plan suited to doing more trades at only £3.99 commission & then back to a lower-priced plan the next month if expecting a quieter period of much less trading. That flexibility seems very handy. So it’s by no means all bad.

I’m with ii and hl. Both I think are fairly good value. Especially if you have a mid sized account and moderate frequency trader. Ie 100k plus account and say 5 to 10 trades a month. On such things a good fill on an order can save you more than any trading fees!

@Don,
I haven’t found a solution either, so far. Unlike IB, many UK brokers charge 1% – 1.5% fx fees which rules them out for US ETFs anyway.

Thanks Jeff. I think you’re right and this is the only way for European investors to buy US domiciled ETFs. Something changed in the regulation between now and about a year ago.

You won’t need to file a US tax return, only a (very simple) W-8BEN form once every two years. FX charges can be mostly mitigated by using services such as Revolut, transferwise, etc. Also, by using US ETFs you can save the 15% L1 withholding tax (reclaim it against UK tax)

Relative newbie here but how easy is it to switch brokers whilst minimising time out of the market?

My wife and I are currently buying a number of Vanguard funds and ETFs using Vanguard Investor. I like the no transaction charge approach.

However, long term, the 0.15% platform fee will start to get expensive vs a fixed fee broker.

Does anyone know which fixed-fee brokers allow in-specie (non-cash) transfers of Vanguard funds and ETFs?

I’d then like to continue paying into Vanguard Investor on a monthly basis. Does anyone see any problems with this approach?

Many thanks in advance.

Genghis, How long depends on the efficiency of both brokers. If the one you’re leaving delays matters, then the one you’re transferring to can do little about it. So it can be anything from the general standard of about 2 to 3 weeks to over 4 months. That’s according to customer reviews for various brokers on sites like Trust Pilot.

@ Sparschwein : Only if you are happy to miss out on the 0% withholding tax on dividends of Irish domiciled US funds held in a SIPP, 0% capital gains tax, and no exposure to US estate tax. Is it really worth the very slightly lower fund expenses on the handful of HMRC reporting funds available in the US?

I’m curious as to what platforms any dual UK/US citizens invest into. I have less then £20K I want to invest (to avoid filing PFIC for now) and so far I have been looking at Close Brothers as a possible option and taking some advice from the list here:
https://www.reddit.com/r/UKPersonalFinance/comments/b87a7o/ss_isa_for_those_with_american_citizenship/?st=jwdmtwhx&sh=2b94e033

@Jeff
Please don’t take the fact that I am unconvinced as unwillingness to be convinced. I do appreciate and in fact welcome any challenge on these matters because I could be wrong.
I agree that within ISA there is no advantage for US ETFs, and in fact there are additional costs for FX conversion. And if someone doesn’t fully utilise their ISA allowance, it’s not worth investing outside an ISA with a US broker, they are better off topping up the ISA instead.
Within a SIPP though, the previously mentioned 15% withholding saving applies in full (there isn’t even withholding in the first place of the setup is correct).
On the other issues you mention, my understanding is that:
A. the extensive usage of “heartbeats” as well as the favorable ETF creation-redemption mechanism manages to completely avoid US CGT within the fund for Vanguard US ETFs anyway.
B. Shares churn within the fund has no UK tax implications for the end investor (assuming UK reporting fund, which most if not all vanguard funds are)
C. They are indeed US situs assets, but if the deceased is UK domiciled for IHT purposes, then the executors can claim the US UK tax treaty and avoid US IHT altogether (at the cost of filling a form I guess).
Again, please don’t step back from the debate as your input is very valuable. I insist not in order to “win” the debate, but to make sure that if there are any holes to my thought process, they are exposed.

@Jeff @Theta
I think Theta might be right about US estate tax. Under article 5(1) of the US UK estate tax treaty, the estate of a person who is solely UK domiciled and is not a US citizen is only taxable in the UK. There are exceptions for certain US situs assets, but not ETFs.

@Theta
Regarding your comment about the 15% withholding tax not charged in a SIPP you’re right in theory. But do you know for sure of any broker that currently lets you buy US-domiciled ETFs in a SIPP? I remember asking AJ Bell about this around a year ago and being told that, unfortunately for the time being, they weren’t able to offer ANY US-domiciled ETFs due to compliance issues. Something to do with KIIDs, if I remember correctly.

I do. I have been using Interactive Brokers for my SIPP and I can confirm that I have had no withholding tax on dividends paid.

I have a copy of the 768 page book called “Guide to US/UK Private Wealth Tax Planning”, 2nd Ed, by Robert L Williams costing £100. Unfortunately, it’s almost as unreadable as the original set of tax treaties, but it does appear to confirm that a non-US person, UK domiciliary would not be subject to the reduced threshold for US estate tax, but it does state that they would need to file a US estate tax return (on death of course) on their entire worldwide wealth to benefit from this exclusion. As I said, this shouldn’t be a problem for most people, but just a warning.

Yes, I have.
But it is true that following MiFiD 2 access to US ETFs was restricted, and I had to be classified as professional as opposed to retail client in order to maintain access. To get this classification you need to have 2 out of 3 requirements:
1. Have done 10 or more trades in relevant products in the last year
2. Have account size of >€500k.
3. Work in the financial sector.
This was the case last year anyway. The situation is very fluid so you may want to contact them to ask whether something has changed.

Another newbie question, apologies:
I’m looking to tidy up my wife’s pensions and transfer into a SIPP. I’d like to “own the world” and keep costs as low as possible. Can someone advise on their own strategy of the cheapest way to “own the world” in a SIPP, taking into account account fees (perhaps using the fixed rate for ETF brokers?), trading fees (perhaps only a couple a year) and the relevant OCFs? Thanks in advance

It depends on the size of the SIPP. For a relatively small SIPP, you’ll be better off avoiding all fixed charges (both annual charges and dealing charges), by going with either Cavendish Online or Close Brothers, both of whom charge 0.25% per year for the platform, and holding funds rather than ETFs (to avoid dealing charges).

The cheapest global equities fund i know of is Fidelity Index World (Class P), which has an OCF of about 0.13%, making total costs 0.38% per year.

However, that Fidelity fund doesn’t include emerging markets (which are currently around 10% of available world equities). If you prefer a fund that does include them, you could instead use HSBC FTSE All-World Index (Class C), which has an OCF of 0.19%, making total costs 0.44%.

Alternatively, you could include emerging markets while keeping costs down a fraction by putting about 90% of your money in that Fidelity fund, and the other 10% in an emerging markets fund, such as Vanguard Emerging Markets Stock Index Fund, which has an OCF of 0.27%, which would give you an average OCF (calculated as 90% of 0.13% + 10% of 0.27%) of about 0.14%, making total costs 0.39%. However, using 2 funds instead of 1 does add some complexity, so beware!

Now, for a larger SIPP, you *may* be able to save money by using a fixed-price platform, or ETFs instead of funds. But first figure out your total costs for that approach (platform charges, fixed or percentage + dealing charges + OCFs), to see whether it really is cheaper than the percentage-fee-platform method (which, by the above calculations, might cost around 0.38% or 0.39% or 0.44% per year, depending how you do it).

@Kraggash Thanks for that, I ignored it (Youinvest Portfolio annual costs and charges statement) thinking it was just an annual valuation which seems to have disappeared this year. It certainly is a useful and interesting document which makes me wonder why they have produced it. Regulatory requirements?

Apparently my investment returns where 0.6% more negative than they would overwise have been. :-/

Hi I am looking to establish a passive investing strategy focusing on ETFs. I have a relatively large AuM (1m) and was looking for a broker that would allow investing in multiple currencies but that was also easy to use.

Which one would you recommend?

Thank you

Idealing.com should be included in your comparison. I find them reliable and very fair.