Broker comparison: cheap investment platforms UK

Has anyone ever successfully negotiated fee reductions on any of these brokers? What amount of holdings do you need for them to even consider?

I believe Hargreaves Lansdown have this facility, but it won’t be cheap if you are holding funds and have a reasonable amount invested.
I suspect the ATS offer is pretty competitive – but you should be aware that ATS have been taken over by Interactive Investor and accounts will be merged soon. II do NOT offer Trust accounts, and are giving very little information about what will happen to transferred ATS accounts of types which they do not support.
I’m not sure of any other brokers, but you could try the major banks eg Barclays, HSBC. I’d be interested in any feedback.

Are you sure the annual platform fee for Lloyds is correct? It says on their website that the fee is £20 six monthly, so £40 annually. Unless I have misunderstood.

Thank you, The Accumulator. The comparison table is incredibly useful and having tried to compare just a few different platforms, I know it must be very time consuming.

Hi all,

Has the Bestinvest SIPP always had a £120 admin fee?
I’ve had my SIPP with them for around 18 months, and at no point on my statement has any quarterly payment been taken. Only the 0.3% fund fee.
I looked at all my original correspondance with them and again no £120 fee is mentioned. I’ve received nothing from them saying that one will now be charged.

Does anyone have any insight into this?

Thanks,
Mike

Hello all, I am looking to move my shares and etfs portfolio to a new platform. Does anyone have experience of xo.com and iweb? I’d be interest to know what there service is like, and whether thay have the full range of etfs available, and any other helpful info? charges seem cheap? much obliged to you all, thank you. Robert

iWeb is the same as Halifax is the same as Lloyds. If you think Lloyds are OK then so is iWeb – shabby website or no. The worst-case scenario at Beaufort didn’t materialise: https://www.thisismoney.co.uk/money/diyinvesting/article-6031143/Beaufort-clients-cash-returned-following-High-Court-ruling-platforms-safe.html

I use iWeb too. I’ve never had a problem but I’m not very demanding. I’ve probably sent them two emails in 10 years. If service is important to you then don’t go bargain bucket.

@WhiteSheep @TA
Agreed IB can be labyrinthine, sometimes nightmarish when starting out, but the access to the markets it offers is absolutely fantastic.
Now I’m intrigued – can anyone explain how IB’s SIPP arrangement works? Could my partner’s Ltd company open a Pension Administrator (master) account and then we invest through SIPP Beneficiary subaccounts?

I have a couple of funds in an ISA with Charles Stanley Direct. They won’t let me transfer them out because one is a closed fund & the other is an institutional fund. Is it possible to sell these funds & then transfer the cash to another platform , keeping it in the ISA wrapper?

@Sparschwein – I am not an expert on any of this, but I don’t think becoming a SIPP administrator is something you would want to do unless it is in your line of business. The first IB page that I linked to above states “A SIPP Administrator is an entity that is authorized and regulated in the United Kingdom”. There is some more detail on the FCA website, e.g. “A guide for Self-Invested Personal Pensions (SIPP) operators”.

@TA – Thanks. It was actually the firevlondon blog where I first heard about IB (and their cheap interest rates on margin loans). The main reason I was curious about IB is that I heard that their international currency transfer rates are also very competitive, possibly more so than most currency brokers.

@Adam
Many thanks.

An essential piece of information for Monevator to provide, would be whether a platform shows the investors capital gains and accumulated losses carried forward. The Fidelity platform does this, but it is an expensive one and I do not know of any others. Any help?

A very useful table. For infrequent traders like me, iWeb and XO are probably the cheapest options for ISAs. I have had accounts with both for around ten years now, and each works fine for me, although it is true that XO’s offering does come across as rather basic. From time to time, I do think about opening an ISA with another provider since the amount of money protected by the FSCS would only be £50k in the event of insolvency. However, that could potentially lead to holding ISAs with several companies, which could end up being a bit of a faff.

The table is great, thanks a lot!
I currently hold a SIPP with Hargreaves Lansdown and the actual fee is + 0.45% UNCAPPED. There is NO MAX £200 as wrongly indicated in the table. It’s +0.45% flat on all investments for amounts between £0 and £250,000, above £250,000 it goes down to +0.25% uncapped as well.

Very useful – thanks.
If possible please add dividend reinvestment charges – these vary widely and can mount up on ETF-only portfolios.
Some info on additional account types not covered by the table:
Lifetime ISA: Among the very limited range of platforms offering this, I found AJ Bell cheapest if you’re planning to max out the 4K annual limit and investing until age 60 (started LISA because of SIPP limits for non-working spouse).
Junior ISA: If regular investing then ii don’t charge only a single “Service plan” fee for an adult account with linked JISA. Also trading credit is shared with the adult account, so if both on regular investment (£0.99) then effectively no extra charge for the JISA.

@Mark — yes, my transfer to Fidelity completed this week. £45 is great. But, the customer service hasn’t been marvellous. Perfectly polite, but 8-10 days to respond to messages.

@JC , @Stephen Thank you both. I will fill in the transfer form. Thanks again.

Vanguard SIPP coming early 2020. 0.15% platform fee:

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/retirement/get-ready-for-the-vanguard-personal-pension?cmpgn=ET119UKCESIP0005

You’re correct, it’s risen. But that FSCS protection has nothing to do with insolvency. If a broker goes insolvent the management of the assets will just be taken over by another broker. The FSCS protection only kicks into place if theres fraud.

Thank you for the insight Michael. I’ll add Saxo to the next update in January.

hi can anybody help me want to invest in low to med risk on a monthly basis opening £500 with £100 to £200 per month self employed so never sure of income where do I start thanks dee

Interactive Investor have scrapped their regular investment fees according to an email I got from them today, so an update is needed!

The Halifax Share Dealing £90 SIPP transfer (exit) fee no longer applies; you get this message when you log in

With effect from 15th November 2019, there is no longer a charge for transferring your SIPP to another provider. The £90 charge for transferring to another registered pension scheme and the £510 charge for transferring to a Qualifying Recognised Overseas Pension Scheme (QROPS) have been removed and will no longer be applied’

There is an article about this on Monevator. If a broker goes under it could take a while for you to access your money. One potential issue is that the administrator is allowed to access customer funds if their costs are very high, so the risk is not zero. https://monevator.com/investor-compensation-scheme. Personally the convenience of having stuff in one place outweighs the risk, but I would be cautious of very low cost brokers or ones you’ve never heard of.

@ Tudno I was just wondering why you would switch your Personal Pension to a SIPP if you were to leave your employer? I have been thinking about doing this with a pension from a previous employer mainly because the range of funds isn’t that great compared to the brokers above however in terms of fees I don’t think I would save much so haven’t gone ahead with it yet. Were there any other advantages that I may have overlooked?

@Robbo – the range of investment options would be much greater in a SIPP and give more control. Another thing is that I recently contacted my PP provider and asked them for an estimate of annual income if I were to retire within the next few months. When I received the answer I wasn’t bowled over by it – for drawdown, the annual income amounts to about 3.6% of the value of my pension fund and is only slightly more than the income from their annuity option. I haven’t made up my mind that I am definitely going to switch to a SIPP – one thing about what my PP provider is offering is that it would be pretty secure and offers peace of mind. Still having said that, my reaction to the 3.6% was definitely one of disappointment. I have other sources of income that I could call on in retirement, so if that PP was my only source of income apart from the state pension then I might take a much more cautious view about switching to a SIPP.

Just checked out HSBC direct investments and it looks like the cost basis has changed from the table “There’s no set-up fee involved, we just charge an annual account fee of 0.25% payable quarterly.” So they should be moved to the flat fee section if I’ve got it right. Also here: https://www.hsbc.co.uk/investments/products-and-services/global-investment-centre/ It looks like you have to open a current account with them too to qualify for the investment account, though there is a £125 switch deal available now (Feb 2020).

@ IanH – the link you’ve shared is for HSBC’s Global Investment Centre – a different service covered in Percentage Fee Broker section of the table. Here’s the link to the flat fee HSBC Invest Direct service: https://www.hsbc.co.uk/investments/products-and-services/invest-direct/pre-apply/

I think I must be missing something. II seems to be cheapest if I’m planning to be a very passive investor and have a reasonable enough size portfolio to be looking at the fixed fee rather than percentage fee brokers.
I’m looking at moving an ISA (and maybe a SIPP) over from an IFA because of the approx 2% pa fees and because the last 10yrs of returns (around 6.5% after fees) having invested with them doesn’t feel like it’s in any way justified the fees given it seems the money could have just gone into a world tracker and done much better with nowhere near the fees.
So, I’m planning to kick off with a lump sum (the existing ISA / SIPP) going to 3 or 4 different tracker type funds / ETFs (or maybe a Vanguard LS fund) and then feed in regular monthly payments to each (plus to a trading account for money in excess of what I can put into the ISA / SIPP each month) thereafter.
It looks like with II if that’s what I’m planning on I’d be up for the platform fee 120pa (and could use the trading credit from that fee if I wanted to rebalance or defuse gains at some point each year) with the regular monthly top up investments being “free”. Whereas with iWeb (which seems to be the competitor) the 5 per trade fee ends up costing you more if you are making more than 24 payments in to top up the account each year (so the two platforms are about a wash cost wise if you have 2 funds / ETFs that you plan on making regular monthly contributions to but anything over that iWeb costs more and if you are looking at having your investments across ISA / SIPP and a trading account then even having just 1 fund in each seems to result in 3x trades per month from an iWeb perspective!). And, with the SIPP, the II costs are again lower than the iWeb costs and so this reduces it iWeb not having a monthly fee benefit even further .
Just want to make sure I am reading this right (and I understand that I’m probably talking about the difference of a sandwich a week in cost over the year but I’m trying to come back to this after lots of time looking at it and then doing nothing as a result of decision paralysis). It would be great to understand if it is as simple as the above in terms of cost comparison (and here I’m assuming that both platforms give me access to the actual funds / ETFs I’m after) or if I’m missing something obvious.
Thanks!

@Linda — Yes, I pay £10 a trade with my Fidelity SIPP.

I’d avoid ii at all costs. I’m a current customer and totally frustrated by the black hole thst is their customer service. I have a significant portfolio with them across ISA, SIPP and trading accounts and I’m still waiting for an anser to a query I raised with them several months ago. I was attracted by ‘cheap’ – but now I know why :/

Is any of the mainstream SIPPs suitable for expats?
It’s a minefield for anyone expecting to move abroad before or during retirement.

Vanguard: “Once you move abroad or lose UK residency, your account will be frozen… you will not be able to make any deposits *or alter your investments*.” “Upon drawdown, which will be coming in phase 2 of the SIPP of which we do not have a date as yet, I am unable to comment as we have not finalised the proposition.”

Aegon: unlike Vanguard, non-residents can change investments within their DC pension account, but “You cannot have a drawdown account if you live abroad, you must be a UK resident.”

For so-called “international SIPPs” that are marketed towards expats, the fees are horrendous.

@Simon – thanks for the tip. I too had my mind set on Vanguard, now need to reconsider…
US/CAN is not in the picture, fortunately.

Mmm, is anyone else slightly uneasy at the pace and scale of IIs acquisition activity?
Does anyone have a view on their underlying financial strength?
As a forced customer following the ATS takeover, I don’t think I have a clear view about their relative safety.

@Vanguardfan

ii is majority owned by JC Flowers a private equity fund started by an eponymous ex-Goldman Sachs (vampire squid) banker Christopher Flowers

It is so well run that its former European head Ravi Sinha was convicted of fraud in 2012 and fined £3m by the FCA and banned from the financial services industry for life. The only reason he avoided jail was because the fund declined to cooperate with the UK legal authorities to allow them to press criminal charges

As soon as our money was transferred to ii I immediately applied to transfer it out

I experienced enormous problems with ii through either incompetence, understaffing or just plain being duplicitous but the transfers just finally completed a few days ago

The most charitable reading of JC Flowers are trying to do with ii is to create a Frankenstein’s monster from acquisitions/body parts that looks like Bell/Hargreaves to float on the stock market but personally I didn’t want to stick around to deal with the fall out

On the subject of customer service – I’m sure there are good and bad stories about each platform as you are dealing with individuals at the platform end. If you need an urgent answer use the phone option otherwise use the secure messaging as provided by most.

On the subject of consolidation – it is hard to see the banks who operate multiple platforms not merging those at some time in the future. Costs and a single brand aligns to banks online simplification model.

Yes, same situation here. Although so far I have been reasonably satisfied with II customer service. I am wary about their understanding of trust accounts though, as they don’t offer this service except to legacy ATS customers.
I think Hargreaves Lansdown may be an alternative, although much more expensive if you hold funds rather than shares/ETFs.

Has anyone had dealings with Halifax Share Dealing. I’m thinking of using them for an ISA which will only hold a Vanguard LS funded by monthly investments. At £36.50 pa (dealing charges and platform fee) it seems like a no brainer.

@Geoff
Halifax Share Dealing is fine for your purposes. The regular investment works well. My only disappointment is that they take the £2 fee from your investment amount (e.g. you want to invest £100 but only £98 will be invested). So your ISA will be £24 short at the end of the year.

Other brokers take the fee as a separate payment from a designated bank account. Halifax take the £12.50 from your bank so it’s annoying they don’t take the regular investment fee this way too.

Regular investment in the Halifax Share Dealing SIPP works well, but one-off contributions are more awkward: I either have to post them a cheque(!) and fill out a contribution form or do a bank transfer and (insecurely!) email them the contribution form. Do they support one-off ISA contributions via debit card online? There are hints in the UI that this might be possible, but that they’ve disabled the facility for SIPP accounts.

There is one daft thing about setting up regular contributions to LifeStrategy funds: their fund picker screen will show two entries both called “LIFESTRATEGY 60 PERC EQUITY” and it’s not until you click on the KIID link on the subsequent screen that you know whether you’re picking the Accumulation or Income flavour. So be careful when you set this up, but once it’s up an running you don’t have to touch it again. For the fees they ask, I can live with these quirks.

Does anyone/everyone here split up their investment platforms to gain some extra security in terms of FSCS compensation scheme? I’m a little over that in some brokers carrying index funds / ETFs and wonder whether I should start spreading it out more. Majority of funds are with Vanguard…perhaps it’s at this level of actual fund choice I should diversify and not worry about platform?

I’m currently with Cavendish Online, which utilises the Fidelity online platform. Having moved over the 26k ‘best for’ threshold this table recommends, I’m finding it very confusing as to which broker I should switch to. I currently hold around 30k and make monthly contributions of £604 (spread over 4 index funds).

Also, when moving broker, do you have to sell all holdings and then move cash across, or are the holdings themselves transferred?

I did look at Lloyds Bank Share Dealing, but they don’t offer the funds I have in my portfolio at present.

@ Michael
I’m with Fidelity for active funds whilst trying to find another platform to switch them to passive funds. I already use Vanguard and want to set up two passive fund platforms. Fidelity are ok, but will be expensive just to hold say 4 passive funds.
By making Cavendish my broker, the Fidelity cost was reduced to 0.25%.

When moving to another broker/platform you have three options.
a) move everything as invested =In Specie which takes up to 6 weeks or more.
b) switch to cash which should complete within 7/10 days but you’ll be out of the market
c) switch to a passive fund such as Vanguard and then move. This will take less time because it’s just the one fund and you will still be
invested.

@FutureExpat: I suggest talking to Hargreaves Lansdown first, seeing as they are one of the only UK brokerages that allow US citizens resident in the UK, so they might be understanding about UK citizens resident in the US. However that might not be the only issue, I somewhat doubt that you’ll be able to make contributions to the ISA whilst you are living in the US, because according to the ISA rules you need to be resident in the UK. Residence is normally determined by the number of days you’ve lived in the country. Things start to get tricky if you also earn some money in the US, in which case I would suggest talking to a US/UK tax specialist. That’s because you’ll have to start dealing with foreign tax credits, part-year returns (in both countries), and the fact that the US tax year is different to the UK tax year.

Would anyone give hints if I should focus to open my stock & shares ISA & stock dealing account ( including US stock ) on 1 or split it into 2 platform

I shortlisted Fidelity as it’s price structure looks clean & simple & affordably cheaper also as this is one who offer US Stock & the Arkk etf that I am interested in.

HL & ii doesn’t offer above arkk etf

Also do anyone recommend IG which offer above etf & US stock I am interested in?

Would people know Fidelity FX rate is it fair compared to others ? As I may actively trade in US stock

Second thought is to open a 2nd passive account on top of the yearly tax-free investment limitation in Lloyds bank. This is my bank where I am holding my savings account in

Is their FX rate fairly acceptable as well

That’s all for now

Thanks in advance would appreciate to hear some tips and advice

Fx charges can be a huge cost factor and always hidden in the small print.
iWeb, AJ Bell and HL charge 1%.
If you have the data for others please post here.
IB has minimal Fx charges and a handy multi-currency account, but no ISA or SIPP option afaik.

II have a tiered system, 1.5% above spot for <£25k: https://www.ii.co.uk/investing-with-ii/international-investing/foreign-exchange

@whoop, thanks. More expensive than my other brokers then!

Well, all I want is my divis converted to gbp as cheaply as possible

I also receive VWRL dividends as USD in my II account. I found the conversion charges and poor FX rate very annoying so opened a Revolut account which enables me to have a USD “bank account”. Added it as to II and simply transfer USD into it (for a $35 “admin” fee) every so often. Then simply convert into your Revolut GBP account for free (as long as you stay under the monthly exchange limit which is £1000 I think). You can then do what you want with the GBP (e.g. transfer to your regular bank account). Revolut also gives much better USD-GBP exchange rates than II.

VWRP costs the same as VWRL but accumulates your dividends automatically

Hi all,

due to my job I can only trade Funds or ETFs and am restricted with the choice of brokers.

I am considering either:

Fidelity
Hargreaves Lansdown
IG
Charles Stanley

I will have aim to have an ISA as well (again only with Funds and ETFs) and invest 30-50k in my first year.

Any recommendations and if yes, why?

Cheers,

S

I have a SIPP with Fidelity with ETFs & ITs only & the £45 a year is great. I don’t have anywhere near the amount you have so would advise reading their terms before going ahead. They only deal in whole units.

Can anyone recommend a broker with low foreign exchange fees when buying and selling US shares e.g. Google, in a UK online broker account? It seems that there can be up to a 1.5% charge above the exchange rate when buying US shares using GBP. Thanks.

Looking for advice on comparing across brokers. The broad question is, is it reasonable to add the platform charge to the more specific investment charge to make a more valid comparison?
Refering to an example could shed more light on this. So let’s say I want to compare Fidelity & Freetrade. This is going to be a back of the envelope comparison as the investable universe is different. The aim is to invest in the FTSE All-share.

Fidelity offers – Fidelity Index UK Fund P Acc. OCF = 0.6% & transaction costs = 0.6%. So I make the specific charges to be 1.2%, and then to compare this to Freetrade, I want to also lump in the platform charge = 0.35% (assuming <£250k invested). So all in cost is ~1.55%

Freetrade offers – SPDR® FTSE UK All Share UCITS ETF. OCF = 0.2% & transaction costs = 0.04%. So I make the specific charges to be 0.24%. The platform charge is fixed at £3 a month for the ISA across the portfolio, so I'm going to assume this is negligable over time. So all in cost is 0.24%.

Is my thinking roughly correct here? I know it's a bit of an apples to oranges comparison because it's an ETF vs. OEIC. But through the lens of pure costs and eventual compounding, it looks like Freetrade would be the better option?

Hi Accumulator and Investor – slight correction on the iWeb fees. The SIPP is actually free to open but has a “Quarterly admin charge of £22.50 for SIPPs valued up to £50,000 and £45 for all other SIPPs”. See https://www.iweb-sharedealing.co.uk/our-accounts.html for more details.

Hope this correction is accurate!

I’m looking to open a Junior ISA account for my children that are US citizens, which means noon-US listed funds should be avoided. Is there a Junior ISA provider that has very low fees for FX in order to buy US listed funds/ETFs?

Oh yes , I had forgotten about the MiFiD 2 / PRIIPS regulations. But that’s still ok, I can buy closed end funds that are good enough for broad market exposure, for example BRK (which has the additional benefit of no dividends, so nothing to report until it’s sold). I know I can open a US account, but that could backfire on the UK tax side of things as any returns from money that I have given to the children would be attributed to me and taxed accordingly AFAIK.
I just saw that Fidelity has no platform fees for Junior ISAs, but doesn’t do transfers, and I’m not sure they would take children that are US citizens as beneficiaries (their terms say no US persona as clients but also that the parent is the client so may be ok). I’m going to call them on Monday to find out.
A good option could have been Trading 212, but looks like Junior ISAs are a work in progress stove the beginning of the year at least.

This table is a great resource. I hope that organisations that aim to help financial consumers are providing pointers to it …

One build I would suggest: to add a column on investor protection, giving the FCA / FSCS accreditation references for each provider.

For many investors, especially those approaching retirement – or even enjoying it already – one of the hard to manage risks is the shuttering, or default, of an investment platform. The protections are generous up to the £85k limit; beyond that, things get tricky.

The mitigation strategy involves holding assets with more than one platform; then, if one platform goes into lockdown for 12-18 months, it is an inconvenience, not a catastrophe. But it is vital that the different platforms really *are* different. Some of the platforms listed are, in reality, duplicates (eg I think sharedeal active and jarvis…. also Halifax / iweb). And some platforms are not FCA /FSCS accredited, so the £85k protection is not part of the arrangement.

It isnt strictly a ‘costs’ factor … until it is, and then it is a huge one.

@Martin T – Your shares, ETFs or funds are always “intermediated” or legally owned by a trustee, unless you own shares via paper certificates or through a CREST account. You are the “beneficial owner”, but there is a series of trusts and sub-trusts between you and the legal owner (often a bank). ISAs and SIPPs are always intermediated and most people hold any non-SIPP/ISA shares via a nominee account also. Unit trusts and OEICs are pooled funds and “represent a” portion of the assets of a fund, where the constituents are actually owned by the asset manager. Intermediated accounts (i.e. investments held via a broker) are typically “omnibus accounts”, which mean that your investments are not “segregated” but instead pooled with other shares. So if one user sells a share and another buys the same one, then ownership/stewardship might never change hands (either at the intermediary or at the CREST member stage). Things could potentially go wrong at any of these stages, although the trustee relationship is meant to be protected by law. The most likely problem would be getting locked out of your account until your contract gets passed to a new trustee, should one of the companies in the chain go belly up. SIPPs probably have stronger protection in law (compared to ISAs) and are more likely to be bailed out by the government should something go catastrophically wrong. But there are some pretty small companies offering SIPP accounts… Personally, I would stick with one or two of the largest brokers if you are going over the FSCS compensation limit. Remember, the limit is per person, per parent institution. I quite like having my SIPPs held with a different institution from my ISAs, and the cost/benefit analysis for each account type might make you choose different providers anyway. There are a few Monevator articles about the FSCS scheme and the potential risks involved, e.g. https://monevator.com/investor-compensation-scheme. The recent Law Commission paper about intermediated securities does not recommend getting rid of the process, but does suggest making it easier (but still more costly) to hold shares directly instead of via nominee. However, I don’t think this would effect ISAs and SIPPs because these would almost certainly always need to be held via a trustee.

@Jeff Beranek yes, fantastically detailed explanation, thanks. Guess the issue is partly about whether urgent liquidity is needed, as well as ultimate safety – cf recent Woodford debacle!

FCA statement on the Platform exit fees consultation (from just over a week ago).

https://www.fca.org.uk/news/statements/statement-certain-fca-work-light-coronavirus-and-changing-market-conditions

‘Our Investment Platforms Market study (2018/19) found that while the market works well overall, there were areas where it could work better. One of these areas was the barrier created by exit fees when consumers try to switch to a platform that better meets their needs.

We announced in Policy Statement 19/29 that we would consult on restricting platform exit fees in Q1 2020. However, this was delayed due to coronavirus, with an intention to consult in Spring 2021; we have now decided to stop work on this consultation.

Since expressing our concerns in the 2018 Interim Report, there has been a marked shift in the market away from exit fees, with at least two major platforms announcing that they would no longer be charging exit fees. The FCA welcomes the direction of travel by the investment platforms sector in phasing out the use of exit fees.

The Exit Fees Consultation was one of a number of remedies to address barriers to switching, including new rules to make moving platforms easier which have already been put in place and come into force in February 2021. We have therefore decided to stop the exit fees work but will be closely monitoring the situation, with the potential to consult on new rules if market changes lead to harm re-emerging in this area.’

I like David R’s suggestion of “a column on investor protection, giving the FCA / FSCS accreditation references for each provider”.

Given that Halifax, Bank of Scotland, iWeb and Lloyds Bank Share Dealing are all a single FCA entity (number 183332) that reduces the number of flat-fee providers (as far as FSCS compensation is concerned) from six to three. Not much choice. It doesn’t help that Share Centre is being / has been absorbed by Interactive Investor.

Vanguard now offering drawdown through their SIPP at no extra cost

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/retirement/how-pension-goes-even-further-with-vanguard?cmpgn=ET1120UKCESIP0103

@Aidan thanks for the heads up on that. Did they send out an email to customers about this? (I haven’t seen one)
I checked on the website and it seems they are introducing a custody charge for shares/ETFs for the first time of 0.25% (same as for funds). This is capped at £30 per year for ISAs and Dealing accounts and £100 per year for SIPPs.
Does this make Hargreaves cheaper now for ETF only portfolios? I will have to check.

Sorry I got that completely wrong. There is already a capped platform fee for ETFs, and it is increasing, but they have tried to disguise this by quoting it as a lower monthly fee.
So £3.50 per month for ISA and Dealing account and £10 per month for the SIPP.
In very small letters underneath the current fees, omitting the fact that it is an increase.
Not impressed by the sleight of hand.

Hi @Vanguardfan I happened to be looking at AJBell’s website pdf charges (to compare with Vanguard charges) and noticed changes from 1st January which I didn’t remembering getting an email about. So I phoned them up to get the low down and ask why I hadn’t been informed. I notice they sent an email out a few mins after my call – coincidence? 😉

Perhaps a little off topic, but … if any readers of this thread want to understand the wider market, in terms of (i) what platforms there are, and (ii) what is available on each platform. this table from Baillie Gifford (who run SMT) might be useful. https://www.bailliegifford.com/en/uk/individual-investors/how-to-invest/ … then click on ‘platform matrix’ to download it.
I cant vouch that the content is as up to date and complete as this Monevator thread though …

Hi there,

I have a decent-sized portfolio (c. 330k) with Fidelity, half in ISAs, half in a general investing account.

I think at this size, a Halifax flat fee account would be the best bet. I’m paying 0.35% with Fidelity and it’s adding up.

However, unless I can do an in-specie transfer, I’m very worried about the time out of the market whilst the transfer is going through. A few % loss whilst out of the market would be painful!

My other option is to transfer to Vanguard, as my funds with Fidelity are generally Vanguard funds, so I can do an in-specie with them. Their 0.15% fee is better than Fidelity, but not as good as the £12.50 flat fee at Halifax.

Is there any way to make a transfer to Halifax less painful?

Cheers!

@Jam

Thanks for the response! For the in-specie, does it matter what funds you are trying to transfer over? I mainly have Vanguard Lifestrayegy 80% and an SP500 fund (HSPX).

Thanks again.

Hi all, I’m finally looking at opening a S+S ISA. I’m looking at using the vanguard investor platform and I’ve decided on my strategy to invest but am unsure which fund for emerging markets. For example, the slow and steady portfolio emerging markets fund price differs considerably compared to the 2 offered on the vanguard platform. Where can I read up to see why its so different? Or is that just the way vanguard has priced it? Also one of the emerging markets funds available on vanguard is less than a year old, should this have any effect on choosing it or not?

Halifax fees are changing from 1st April:
https://www.halifax.co.uk/investing/start-investing/share-dealing-services/charges/changes-to-our-pricing.html

Annual fee of £36 for non-SIPP accounts. Dealing cost reduced from £12.50 to £9.50.

As far as I can work out, Interactive Brokers is totally free if a) you hold >$100k (>c.£75k) and b) you are purchasing any fee free funds (which includes Vanguard Lifestrategy). You also get access to their FX capability and margin loans against your fund holding. Even if you pay the fees, it works out cheaper than Vanguard Investor if you hold >c.£60k (but no ISA). The table should probably be updated to change ‘n/a’ for dealing funds.
https://www.interactivebrokers.co.uk/en/index.php?f=39753&p=funds2

Also worth adding Fineco (Italian bank) who are low fee, have a very sophisticated platform and seems to come with GBP/EUR current accounts. Their desktop app allows you to pull live prices and other data into Excel.
https://finecobank.co.uk/public/pricing/

Interactive Brokers – you can still buy other funds but subject to the €4.95 fee. Protection is through the US SIPC scheme up to $500,000 as the custodian for IB UK is IB LLC (apart from for metals and OTC CFDs)
https://ibkr.info/article/2012

Fineco – they are an Italian regulated entity so you are covered through FITD up to €100,000 for cash and through FNG up to €20,000 for stocks & shares. The disclaimers on their website reference this and you can look up the firm on the relevant websites.
http://www.fitd.it/Home
http://www.fondonazionaledigaranzia.it/

Further to fees,
Also, I don’t think that HL charge for inactivity or for drawdown/transfer – as far as I can see?

I think you are right! Thanks. I’ve double checked with HL. They say they don’t make any charge for dealing in funds and in many cases they can negotiate cheaper costs with the fund provider so the products themselves are often better value than elsewhere. They also offer loyalty discounts – apparently – told me to study the notes that go with each fund and keep an eye on their website. All this helps to negate the platform charge. I’ll keep delving and make a decision for long term investing, eventually. I like their app. Very slick and stylish! And no, I don’t work for them ha!
Regards, Hugh W

Tobeman, you are correct, up to £250k. The 0.45% HL fees for funds start to taper off once you get above £250k.
Last time I did the sums…
– £250k invested in funds through HL, you pay about £1,000 pa in fees to HL. vs £0-£240 with II or Iweb (mainly depending whether it is in a SIPP).
– £1m invested in funds through HL, you pay about £3,000 pa in fees to HL. vs £0-£240 with II or Iweb.
– £2m+ invested in funds through HL, you pay about £4,000 pa in fees to HL. vs £0-£240 with II or Iweb.
HL do negotiate some rebates on the fund manager fees, and HL customers get a slice of this, but this perk doesn’t make up for the high fees.

HL interface and functionality is fine, I’d be happy enough to use them for equities and investment trusts and ETFs, especially in a Trading account, or if my portfolio were under £25k or so. But HL is an expensive place to hold medium or large portfolios of funds.

Hi David R,
Just so I understand this. So if I just used HL for share dealing, etf’s etc, wouldn’t that be cost effective? (No cost for platform) why restrict to under £25k? And wouldn’t the ISA cap of £45 or £200 for SIPP make these costs pale into insignificance as the portfolios grow?

Yes, thanks David R, I understand that.
I am contemplating making ALL investments in SHARES or ETF’s with HL, within an ISA or SIPP with NO investments that attract the 0.45% ongoing fund fee.
However, I’ve just been told that certain of these HL funds have had some 5% or ALL initial costs negotiated away. Still trying to get my head around how that works.
How do initial costs or lack of them affect a passive index UNIT TRUST compared with the structure of an ETF that tracks the same index and consequently, how that affects overall retained value of each Investment, over 10 years, after all costs are accounted for?
I’m told that for example, if one invested say £1000 per month in a UNIT TRUST you would normally have to pay the approx 5% initial charge on each transaction, each month. But due to HL’s size they are able to eliminate these costs.
Also, unit trusts costs/profits/losses behave or work differently as markets move up and down, apparently?
According to an HL cost chart, an index unit trust, in an ISA, can return slightly more, at least for £5000 , assuming 5% growth per year, invested over 5 years. Think the ETF can save more costs for anything over about £10.000 that dilutes the £45 max Isa cost. But In and out dealing costs will be incurred. Not for the UNIT TRUST. And what about dividend reinvestment costs?
Maybe certain HL actively managed funds are good value, despite the ongoing 0.45% fee, if you don’t have to pay the initial fees on each purchase of units!

Hugh W

Yes HL is reasonably competitive if you stick to ETFs and shares. Zero funds. Well okay, not much in funds, less than £25k or so in funds, in total. It sounds like your portfolio is going to be 4 figures or lowish 5 figures, in which case the differences in fees might be small. At least until there is some growth (or you get a dollop of extra cash from somewhere).

The upfront fee for funds – I havent seen a 5%** entry or exit fee for many years. I dont think I’ve ever bought one that charged even 1% upfront or at exit. On any platform. So I wouldnt be all that impressed by an offer of zero upfront fees. I regard that as normal. There might or might not be the usual £5 or £10 flat fee dealing charge, depending on the platform you are using, which could rack up if you are regularly buying in small monthly increments.

Do your own research. I do use ETFs, but I’m a bit wary of them, with them not being UK domiciled, so there are no FSCS protections if the ETF provider (as opposed to the platform) goes belly up. Unlikely, but best avoided.

**other than a few VCT offerings, which did give useful upfront tax breaks, but they did rake off 3%-10% in upfront fees and premiums.

David R
Thanks for your kind words of wisdom. I will buy the book!
Given my preference for researching and investing in mainly individual company shares, (and some trackers) can you briefly say why you feel the HG Sipp and ISA accounts are ok for smaller amounts as opposed to larger sums? As they are capped, won’t the fees pale into insignificance as the portfolio, hopefully, grows?
Also, thanks for your thoughts on ETF’S. I don’t like non uk either!
I was also wondering about individual foreign shares held in a SIPP. (I know you can’t hold them in an ISA anyway) With Interactive Investor, for instance, you can hold them in a foreign currency account (1.5% FX up to £5k) but with HL, I believe they automatically convert them into sterling (1% FX) in any type of account held. Does this help to ensure FSCS protection too? and/or maybe best held in Sterling for any tax reasons or simplicity? I’m not asking for personal advice. Just interested in your views.
Regards, Hugh.

https://monevator.com/foreign-shares-in-an-isa/ might help (i assume it is still current)
yes platforms are a bit reluctant to hold your bits and pieces of cash in lots of currencies.
go easy on the picking-winners … at least until you’ve read Lars’ book!

PS. Found this snippet by Monevator 2010 re withholding tax/tax generally and SIPP interesting, especially re funds/ETF’s domiciled in Ireland:

Avoid the whole palaver

SIPPs qualify for a zero rate of withholding tax from certain countries including the US.

However, not all brokers structure their SIPPs to enjoy this freebie so check with your broker first if the extra 15% off is a deal-breaker.

ETF and fund investors can also duck withholding tax on their dividends by investing in the right funds.

Funds/ETFs domiciled in Ireland and Luxembourg do not levy withholding tax on dividends paid to UK investors. You only pay regular UK rates of tax, or nothing at all if your investment is tucked away in an ISA or SIPP.

Cheerio!

Hi there, I’m looking into starting a slow and steady portfolio. Is there any reason why I couldn’t use a platform like Trading212’s ISA invest account to build and manage a portfolio? As the there are no fees apart from the initial spread, it seems like a option, but Monevator doesn’t appear to recommend it. I’m totally new to this so have probably missed something.
Thanks,
Tim.

@Tobeman. Thanks for your feedback. As far as I can see, though, you can invest in ETFs too. For example, I found Vanguard’s FTSE All-World UCITS ETF (VWRL) and U.K. Gilt UCITS ETF (VGOV) EFTs in their platform. So it looks as though you can implement Monevator’s example “Keep It Simple” portfolio. And the platform is fee free. The platform is very similar to FreeTrade’s platform, but with the benefit they don’t charge for the ISA. FreeTrade charge £3 per month for their ISA. So it looks like a good option, but I’d be interested to hear what people in the Monevator community think. Sounds almost too good to be true. Thanks,
Tim.

Hi,
I’m just wondering why open ended funds are used mainly in the slow and steady Monevator portfolio rather than ETF’s as you say above?
Also, is it best to buy Vanguard funds or ETF’s directly from Vanguard or can you buy them cost effectively through a broker that has a good score for all round usability?

@aj be aware that iDealing.com is a very small brokerage firm. Also, due to Brexit, they might lose significant business if they can no longer passport their financial services to the EU. I suspect that they have a significant client base in France. I am currently in the process of transferring out of iDealing (despite high exit fees) due to my concerns. https://ukandeu.ac.uk/what-does-the-brexit-trade-deal-mean-for-financial-services/

@aj – iDealing.com exit fees are £17.50 per share (in specie) and £60 account closure fee. Depending on the number of shares you own, it might cost less to sell the shares and buy them back after a cash transfer, but make sure you factor in dealing costs (selling and buying), bid/offer spread, and stamp duty (if applicable).

Last comm I received from iweb, beyond isa deadline reminder, was 25/2/2021: “On 1 April 2021 we’re making some changes to our Share Dealing Terms and Conditions. ” Halifax Share Dealing, who I understood provided iWeb’ s platform, are also changing their price structure etc from 1/4/2021. Maybe ‘the One Man’ is managing change @ Halifax ‘and his Dog’ is left in charge of iWeb.

Hi,
I see Halifax’s new £9.50 dealing fee is force, having just topped up my ISA for the new tax year.
They have said there will be a £36 per annum charge. Does anyone know which account that will be taken from? I have an ISA and general trading account and hope the don’t take it from the ISA as that seems a waste of the ISA allowance. I have not been able to get through to them and even tweeting them didn’t help. Thanks.

https://www.barclays.co.uk/smart-investor/investments/moving-investments/
Since they are in the table, Barclays Smart Investor has had a transfer cashback offer running since February until 17 May (3 month extension on request). £50 cashback on a minimum £10k transfer, tiered up to a maximum cashback of £2000 (on £200k+ transfer). Pensions excluded.

Whilst they aren’t particularly competitive on price, the cashback would seem to cover at least two years basic fees, and they will cover transfer out charges up to £500, so it might suit some even if only as a shorter term option (although as always with these transfer offers read the terms carefully and DYOR).

@SJ – The ISA rules mean that shares must be held in nominee accounts, so personal CREST membership is not possible even if you wanted it. DTCC is a standard way to own shares via US brokers, so nothing unusual there either. Most importantly, Freetrade is FCA-registered and your account is covered by the Financial Services Compensation Scheme (FSCS). That’s not to say your money is 100% safe. Brokers have gone bust (e.g. SVS, Beaufort Securities) and despite FSCS your money is still potentially at risk from administration fees (https://www.investorschronicle.co.uk/managing-your-money/2019/11/07/what-to-do-when-your-broker-goes-bust). Not all brokers are equally “safe”. I would certainly have more doubts over the business models of the smaller “zero commission” brokers compared to larger players, but no company is too big to fail. The latest Freetrade accounts (released 22 Jun 2020 for the year ending Sep 2019) show a loss for the year of £3.47m (revenue was just £86,000). Vanguard Group apparently had an annual revenue in 2020 of $6.9 billion.

@Jeff Beranek Thanks for that. I hadn’t even thought to check Freetrade’s financials. I’ll be watching their next annual report, but with the rise in speculative traders, many of whom will be using their service, and the current frothy market, I’ll stick with Vanguard.

@B regarding e-Toro. I think you partially answered your own question. High fees for investing and withdrawing your money, combined with a lack of tax-efficient wrappers, would be major detractors for most people. Also, be aware that *if* you are able to access a US-domiciled ETF (see below) then you should only be using HMRC-approved “reporting funds” for tax reasons. On this list, there are only a small number of low-cost tracker ETFs (namely a subset of the Vanguard range, plus a few Van Eck or Aberdeen Standard ETCs) that would be worth considering. Also, I’m not sure if you can or cannot buy US ETFs via e-Toro, but EU/UK regulations state that brokers (globally) are not permitted to sell ETFs without a KID (Key Information Document) to EU/UK resident retail clients directly. There are no US-domiciled ETFs with KIDs that I am aware of.

@B & Gengis: I’ve been investigating e-Toro further. It’s hard to tell without actually opening an account what you are able to trade. However, they appear to be offering CFDs on US ETFs to UK resident retail clients. I’m afraid I’m no expert on CFDs, but know enough to avoid them like the plague… CFDs are essentially bets on the price movement of something, rather than owning the actual asset.

@Jeff/Genghis,
Thanks for the reply. Yes fully agree to your points.
Thanks again Monevator for putting together this amazing website.

Does anybody know why T212 have not been accepting new customers?

It’s the cheapest platform of them all!

@Bobbins.
I have a Hargreaves Lansdown SIPP, which is capped at £200 for ETFs. I have only 2 ETF funds: a global tracker and a bond fund. No extra charges for withdrawals. I only trade in it once or twice a year to make a withdrawal and rebalance.
Remember though that your asset allocation will have a far higher impact on the returns you get than trying to finesse out the saving of the last few £’s of costs.

Saw something on Reddit saying Interactive Brokers were ditching their $10 inactivity fee. Unable to find any confirmation myself.