Broker comparison: cheap investment platforms UK

Do you think it is worth waiting until all the company’s have played their hands or to start an account now and possibly move in the future?

I want to open my first investing/long term/personal retirement account and start saving.

Hi Accumulator,

Thanks for the update. I moved to Alliance Trust a couple of years back after studying your original comparison table.

I however am still stuck with Fidelity for my previous ISA portfolio (and have Junior ISA / SIPP in H-L). Havent consolidated them all as i am unsure about charges involved and tomorrow someone else might come up to be better than Alliance . However multiple accounts etc is a hassle.

Any advice on consolidation/ transfers would be appreciated

thanks

Thanks for the update, I think there is a mistake against Bestinvest though – the table shows “Vanguard funds – No” but I have bought Vanguard through them.

Excelent and timely. I am about to move my ISA from Alliance Trust Savings where I have experienced poor service on a number of occasions, to Sippdeal, or whatever they are called now. They have an offer on at present to refund up to £500 to cover transfer Alliance Trust’s extortionate transfer costs. It looks as though Sippdeal do all I want, ETFs, clean funds, gilts and other bonds. They have told me that I need to phone them to trade gilts, but the cost is no higher than on-line.

If you refer a friend they claim to give you £100, so my wife and I will refer eash other. Be interesting to see what happens.

My other choice was iWeb, which has cheaper trading, but I want the option to hold clean funds even though I don’t at present, and Sippdeal seemed to have better coverage, including the dirt cheap Blackrock trackers. In the end it was the offer to refund the transfer costs that swung it.

I hope I don’t regret the move. Alliance Trust started out very cheap a few years ago then gradually increased prices at the same time as increasing the rate of cock ups.

Am I right in interpreting the table as showing that BestInvest do not offer the Vanguard funds? I’ve just checked and they appear to offer these?

Youinvest (Sippdeal) have now made their custody charge mandatory…and doubled it to £25/quarter for a SIPP valued over 20k. £5/quarter if below £10k and £15/quarter if inbetween.

Beaten to it by Aidan 🙂

Pants. I checked Youinvest/Sippdeal on Sat and there was no sign of this. This is a big change. Suddenly makes Sippdeal look much more average. I’ll update the table as soon as I can. May not be tonight. The custody charge doesn’t apply to ETFs. Increasingly, it looks worth substituting funds for similar ETFs where your broker doesn’t apply a platform fee to ETFs.

Beaten to it!

[quote]Wasn’t RDR supposed to make things easier for the consumer?????[/quote]

Same thought has occurred to me recently. I’ve been with Charles Stanley since summer but even their much trumpeted clean charging structure makes no sense whatsoever when comparing the cost of holding ETFs versus funds.

It’s a double whammy Aidan. There is the sipp charge and an increase/change in the fund charges.

Correction: I was paying £12.50/quarter before, now it will be £50+£25 =£75 per quarter. Arggghhhh!

Sickener. A quadrupling of the custody charge for investors (with over 100K in an account) from £50 to £200 is pretty nasty.

It feels pretty unreasonable that they have attracted investors into clean funds on the basis of a £50 custody charge (many like myself who have been with them less than a year) and then quadruple it to £200 while charging for re-registration to move to another platform. It is nothing to do with RDR of course, their current clean offering was conducted on the basis of explicit platform charging and that is what RDR requires so doesn’t affect that.

And to give only a months notice covering the Christmas period of a quadrupling of charges is not fair on investors.

Increasing the re-registration fee to £25 is ridiculous when the whole purpose of the FCA requirement for re-registation was to make it easy for investors to switch platforms and not be trapped into a high charging offering.

I would suggest that any investor with Youinvest who faces a large increase in fees and decides to move to another platform, asks Youinvest to waive all re-registration charges and selling costs to move away. Should they refuse then register a complaint with the Financial Ombudsman Service in relation to the unfair terms in consumer contracts legislation on receipt of their final response or 8 weeks after complaining whichever is later. I successfully took a claim against Hargreaves Lansdown to the Financial Ombudsman Service when they refused to waive re-registration fees in a very similar scenario, and the FOS decided in my favour. I think Youinvest’s terms and conditions allowed them to increase charges in line with national average earnings, but anything above that is challengable under the unfair contracts terms legislation if they do not allow a cost free exit route. No guarantee of success of course but every chance of a successful all the same.

It will be interesting to see how much stick they get for this change. Interactive Investor got crucified in the press when they increased their fees about a year ago. Their “outrageous” fees are now looking more and more reasonable. I take it there is a separate £200 cap on each account you have with Youinvest? So, if you and your spouse each have an ISA account and dealing account, and each has £100k in it, you will be paying £800 per year between you. With Interactive Investor you would be paying £80 per year (and get £80 of dealing credits in return). [Interactive Investor even allows you to link with other family members, so I am linked with my wife, brother, mother, father, and mother-in-law and between us we have 11 accounts. That’s £7 per account, compared with £200 if we were at Youinvest.]

It must be difficult times for platforms, trying to find a sustainable fee model. Youinvest will only profit from this move on those clients who have trail-free funds worth more than about £25k. That’s the threshold at which you will be paying more than the old fee of £50 per year. But (ignoring switching costs) these clients would now pay less if they switch to those platforms that still operate a flat fee model, such as ATS or Interactive Investor. If most of these clients move, then Youinvest will be left with clients who predominantly have portfolios of less than £25k. And on those clients they will now be earning less than the £50 per year they used to earn. So, the question is, will enough clients with portfolios of more than £25k stay with them so that the extra income from those clients exceeds the lost income from (a) clients who switch away and (b) clients for whom the 0.2% fee is less than £50 per year.

I’m not sure whether this makes it more or less likely that ATS and Interactive Investor will follow suit. It might indicate that the flat fee model is hard to sustain. But on the other hand, the more that other platforms switch to a percentage charge, the more business ATS and Interactive Investor might get, because people with bigger portfolios only have a couple of choices of platform that have a flat fee model. The rewards from sticking to the flat fee model have potentially improved.

Now that Youinvest has switched, I imagine they wish that ATS and Interactive Investor would do so too. I’m guessing that there must be a lot of off-the-record pressure being brought to bear by the industry old-boy-network on the likes of ATS and Interactive Investor to fall into line. Given that Interactive Investor is powered by Cofunds, I wonder how long the current fee model can last.

Am I the only person baffled as to why platforms feel compelled to charge a percentage fee for holding funds, yet will hold shares either for free or at minimal (and usually flat) charge? To me, both of these seem broadly equivalent — setting aside a proportion of SOMETHING in my name. Whether that SOMETHING is a fund or a share should be pretty much irrelevant — it’s not like these are vastly different items (and in the case of ETFs they are clearly absolutely equivalent) — yet it is not.

I cannot shake the feeling that fund platforms are taking their customers for a ride, and that far from platform competition what we are witnessing is a full blown anti-competitive and private cartel, with only ATS and iii as outliers.

Table now updated with the new Youinvest/Sippdeal charges from Jan 1 2014. New ‘good for’ recommendations in the table reflect the Youinvest charges from Jan 1. Note, while better deals may superficially appear to exist in the Commission only broker section of the table, the reality is that these brokers will have to switch to a new ‘Clean Class’ model over the course of the next year or so.

Interesting that there is no mention of offering super-clean funds with lower AMCs than the clean funds. They seem to be saying that punters should choose to pay HL’s higher fees just for HL’s supposedly better service. Perhaps the super-clean negotiations have not gone well.

I think people have been flocking to Aldi and Lidl, haven’t they? And Aldi were voted best supermarket by Which magazine.

Anyone know or had an information leak as to Barclays Stockbrokers new charges are going to be.?

Just rang BestInvest and they said they will be moving to a % fee on index funds too, details to be announced.
So % fees across the board post RDR?

I have a high fee ISA that I wan to move into a low fee platform and index funds. I will wait until Jan to see which platform looks the best. These account closing fees are a deliberate barrier to competition.

Unless vanguard let me go direct, it is looking like the cost effective approach may be to have index efts in a low fee share trading account.

@chrisssy

I moved an ISA to Sippdeal (Youinvest) and converted to clean funds just like you (I don’t have a SIPP). I’ve been hit by a quadrupling of custody charge (£50 to £200) and they want to charge me nearly 3 times the current platform charge (£140) to re-register away. It annoys me that Sippdeal are offering to pay exit fees of up to £500 to people who move to Sippdeal at the moment, while at the same time that they are not agreeing to waive exit fees for those leaving because of a quadrupling of charges, investors like me who have been attracted in by charges which they weren’t to know would be (for example) quadrupled within a year.

I’m re-registering over to Alliance Trust Savings as they are fully RDR compliant, but there has been a press article to suggest they might be looking to increase charges in the coming months. The email I got confirming the account opening mentioned prominently their FIXED fees which I am taking as small encouragement that they won’t go percentage based which would be teh real problem for me.

If you think you are being treated unfairly by Sippdeal put in a complaint. I’ve put up a template complaint letter over on MSE

http://forums.moneysavingexpert.com/showpost.php?p=63966222&postcount=64

Sippdeal are currently deciding on a general policy on what to do on a number of complaints they have received on this matter and are expecting to make a decision ‘sooner rather than later’ they tell me.

@Jumper
Ha ha you win or is that lose!

With the recent news I think some changes of names might be in order in the table

Hargreaves Letusdown (for not announcing)
You Can’ttrust (for You Invest not waiving exit fees after quadrupling or sextupling fees)
Worst Invest (for those with large sums currently with Best Invest)

Those suggestions are just for fun (I think!!!).

When I was looking at platforms in January, Best Invest were straight with me that they might go percentage based, when I explained that was my fear was that they might go percentage based, for which I am grateful as it avoided the issues that I am now having with exiting YouInvest

Charles Stanley have just released their Junior ISA also…

Trustnet Direct are about to start a new platform according to this Telegraph article.

http://www.telegraph.co.uk/finance/personalfinance/investing/10523154/New-rival-to-Hargreaves-Lansdown-launches.html

Looks interesting as I am swapping to ATS after AJ Bell Youinvest quadrupled my charges. If ATS doesn’t work out then this new platform could be an option in the future (with their £200 capped charge), as there is no way I would ever go back to YouInvest, as I don’t think they can ever be trusted again following their refusal to waive re-registration charges. It shouldn’t be necessary to have to go the Financial Ombudsman Service to get fair treatment.

Interesting news from Trustnet. Clearly the devil will be in the details — how much extra for running a SIPP, whether transfer out charges are extortionate, what other specious charges they can invent that others haven’t yet thought of, that sort of thing — but well worth watching. And of course, fingers crossed that they do not use Cofunds as their underlying platform …

Just received letter datd 27/12/13 from Alliance Trust (ATS) saying ISA is going up to £18.75+vat/qtr = £90p.a (from £48), Sipp £155+vat=£186 p.a (from £162) wef 1st Feb for existing savers, but already showing as active for new savers on their website today
http://www.alliancetrustsavings.co.uk/investments/isa/stocks-shares-isa/
Letter says prices fixed till 2016 but you can move f.o.c. up to 28/2/13 if you don’t like the deal.

iii.co.uk looks compelling for husband & wife ISA as total cost is £80 or £40 each p.a including 8 trades.

I can’t see why they would actively aim to drive smaller investors off the platform, given that they charge a fixed fee regardless of assets invested. But I would agree that the likely effect of their changes will be to push smaller investors to the likes of YouInvest.

It may also push a lot of larger investors to Interactive Investor, assuming they don’t have a fee hike of their own on the way.

Kudos to ATS for offering free transfers out, over the next two months, however. Quite a gamble by ATS, given that many customers will be better off elsewhere.

On the other hand, the ATS move does seem to signal they are committed to a fixed fee for at least two years. Let’s hope this means Interactive Investor can also avoid switching to a fee equal to a percentage of assets on the platform.

What surprised me with ATS is that they were one of the first clean-class brokers and announced significant fee hikes less than 18 months ago already – only to now go and do it again (although even bigger). Have the costs of running an SSISA *really* doubled in the past 18 months? Meanwhile HL are *still* holding out and are clearly going to keep doing so until the last penny of rebate commission has been paid.

More galling for ATS clients is that IFA Online posted “Alliance Trust platform makes first profit” in March declaring how profitable their “new” pricing model has been… and that was before ATS just doubled it. I think ATS have wised up that they are one of the (very) few fixed fee brokers around and know they have certain customers by the balls. Maybe once they have weaned off all the smaller sized clients, they will flip to percentage fees… or double again.

The road to hell is paved with good intentions and this is what RDR has ended up being for everyone involved; retail investors, brokers, platforms and fund managers alike. Still the dust hasn’t settled – isn’t likely to for another couple of years at least. What a mess.

Fool me once… I’ve lost confidence in ATS but where to go? Rock and a hard place…

@neverland

Yes, Interactive Investor made some fundamental changes to their fees about two years ago and, as I have said in earlier posts, they might do so again.

They got a lot of adverse publicity last time, partly self-inflicted because they clumsily tried to present the changes as being for the benefit of customers, but I think we can now see in retrospect that it was also partly because they made the tactical error of being the first to switch to a post-RDR fee structure and therefore took all the flack. ATS made some similar changes a few months after Interactive Investor and there was barely a mention in the media, because “another company does the same bad thing” is not interesting to a financial journalist. This is despite the fact that the changes made by ATS increased fees for people like me by 380% (now rising to about 600% with this second batch of increases).

@ivanopinion

Interesting to look at the ATS section in the Alliance Trust report and account

I used to hold Alliance Trust shares from when the discount was bigger and ATS has lost money for at least five years I can remember

They break out the businesses profitability. It lost £0.4m on £4.1bnof assets in 2012 and finally made £0.2m in the first half of 2013 (presumably after the last fee hike)

While ATS probably has a bloated salary base, I do wonder how much some of the other pricing offers out there are just typical financial service “bait and switch” offers just to get some punters in to be fleeced with a fee hike later

As I understand it Cavendish (via Fidelity Fundsnetwork) are now a (white labelled) clean class platform for new fund purchases with a 0.25% platform charge (the 0.25% being the Fidelity Fundsnetwork platform charge and Cavendish getting back 0.05% of this from Fidelity).

Legacy funds are continuing on the dirty commission refunded model for the time being.

Re-registrations of dirty funds to Fidelity Fundsnetwork (i.e. Cavendish) will for the next few months still be dirty to dirty although that is likely to change ‘some time in the first quarter of 2014’.

Should a note be added to the table to explain that new investments will go into clean classes subject to 0.25% platform charge and that conversions will take place by April 2016 meaning a 0.25% platform charge will eventually apply for all funds at that point?

iWeb have just announced their changes, I think

http://www.iweb-sharedealing.co.uk/F…nd-changes.asp

Looks like a fund conversion process to clean funds plus the introduction of a trading charge of £5 for (clean) funds, but no sign of any custody charge for ISA or dealing accounts.

I can’t work out what funds are available through iweb though. They have a list of funds currently available

http://halifaxiweb.digitallook.com/cgi-bin/fund_browse.cgi?username=&ac=&action=manager

and the conversion link in the announcement gives some clues also. From that it seems to include HSBC trackers (which appear to be converted from retail to C class) and a very restricted range of Vanguard trackers (e.g. Vanguard lifestrategy 100%).

And I’m not sure what their other existing charges are apart from trading charges (which will now extend to fund purchases and sales from 31st March 2014) and a one off £25 account opening charge. But no separate ongoing account charge except for SIPPs where there is an account charge (of either £18.75 per quarter or £37.50 per quarter).

Something doesn’t seem right here as there is an indication that (say) clean class HSBC trackers can after 31st March 2014 be held in an ISA for a one off account opening fee of £25, fund dealing charge of £5 and no custody charge?

On a side note I wonder whether the re-registration out charge for iweb is £90 PLUS £18 per holding (and not OR), but I may well be wrong, as their charges are not clearly worded.

Thanks, Snowman! I’ll update the table this week. You’re right, that link is iweb’s fund list. The platform fee does seem ridiculously cheap though, so I’m pretty sure there’s a catch in there somewhere.

Charles Stanley state that they charge a £100 + VAT administration fee for SIPPs. This does not appear in the comparison table.

re Youinvest, this seems to imply that the £200/year price cap is per account – ie if you have an ISA, SIPP and a taxable account with them your maximum is £600/year:

https://www.ajbell.co.uk/news/aj-bell-youinvest-announces-new-pricing-structure-for-clean-funds

“From 1 January 2014, the cost for holding clean funds with AJ Bell Youinvest will be 0.2% pa with a maximum charge of £50 per quarter per account.”

Can anyone with multiple accounts with them confirm this?

Are you planning to do any example portfolio costings. So far the ones I seen in the media make virtually no sense as the assumptions they are making regards number of holdings and activity are never explained adequately.

We are searching for a better deal than Hargreaves Lansdown for our investment, SIPP and ISA accounts after 1 March 2014 and found that Santander Sharedealing is an investment broker that may be least costly for those like us who trade infrequently and have mostly ETF’s in their portfolio. Their trades are GBP 15 each however their account fee at GBP 12/quarter per account seems very competitive. Seems they don’t hold SIPP’s.
Would you please include Santander in your comparison. Thank you.

Axa self investor looks like a potential escape route for ISA investors leaving other platforms. They are waiving platform charges (normally 0.5%pa) on fund ISAs until 1 May 2015 (and you can transfer in ISAs too and the no platform charges offer applies to those transferred funds also). There are no exit charges on leaving Axa so you can free park and then move around April 2015 to somewhere cheaper. No Vanguard but HSBC C class and L&G I class trackers avaialable.

Fidelity as expected have announced their post RDR structure. Headline rate is 0.35%pa for funds across accounts (makes FidelityFundsnetwork for funds cheaper via Cavendish at 0.25% although Cavendish don’t currently offer a SIPP).

Full details on the Fidelity website including the Q & A.

Interesting one is the recently introduced SIPP where they have cut from 0.65%pa to 0.35%pa (no account charge). So potentially best low value SIPP for funds.

Note they count ETFs as funds for platform charging purposes (I think) across accounts (i.e 0.35%). You didn’t used to be able to hold shares in the Fidelity (main) SIPP, not sure if that is still the case.

https://www.fidelity.co.uk/investor/funds/fund-charges/fund-charges.page?WT.mc_id=UCAR001

Still no sign of Vanguard funds as far as I can see.

Interestingly, Fidelity charge drops to 0.2% for fund portfolios of more than £250k, which is a much lower threshhold than the HL tiers. It also applies to your entire portfolio, not just the bit in excess of £250k.

So that beats Charles Stanley (for fund portfolios between £250k and £1m) and Cavendish (for fund portfolios of more than £250k). I would think this would make Fidelity the best value for a portfolio that big, amongst the platforms with percentage fees and no dealing charges for funds.

Something to beware is that Fidelity are offering free switching from dirty to clean (which is good), but I’m astonished to see that the Q&A indicate that they are doing this by buying and selling, rather than getting the manager to transform the class, so you will be out of the market for a couple of days and if the clean class has initial charge or dilution levy. This could be VERY costly.

Sorry, I garbled post 284. £250k is not a lower threshhold than HL, but 0.2% is a lower percentage and it applies to the whole portfolio.

Barclays Stockbrokers have announced their new RDR charging structure. Expensive with lots of extra fees.

https://www.barclaysstockbrokers.co.uk/Pages/price-changes.aspx

The langcat analysis of Barclays is here: http://langcatfinancial.co.uk/2014/01/platforms-faahzands-em-barclays-et-al-go-top/

They are only remotely competitive for smallish portfolios, but not the smallest.

I’ve updated my prototype spreadsheet that does platform cost comparisons to include Barclays. It can be downloaded from

https://drive.google.com/file/d/0BxA6Przq6KI1eFdCMUNsT0JVMFE/edit?usp=sharing

The spreadsheet is super work, thanks Snowman.

Interactive Investor clarification:

A couple of posters over on MSE have checked out the Interactive Investor charges where an ISA and/or dealing account are held in addition to a SIPP account.

To quote from the Interactive Investor reply to one poster who asked about the position on having an ISA/dealing account in addition to a SIPP account.

‘I can confirm that we charge a £20 quarterly fee to have a Trading and ISA Account and the £20.00 is given back to you towards commission charges on trades placed in the account. If you have a SIPP account, you only pay the annual administration for the SIPP, £120 + VAT. You are exempt from paying our quarterly fee and would not receive the £20 commission credit.

If you have a SIPP account you cannot Family Link to a family member with a SIPP account to exempt them from the annual SIPP fees. However, you can Family Link your account to a family member who has a Trading (and ISA) account. In this case, they will be exempt from paying our quarterly fee and will not receive commission credit.’

Yes, I’m finding them very cheap and the platform a lot easier to use than Hargreaves (instant charts as you get prices and the ability to buy for ISA/non-ISA from the same screen, which saves a lot of jumping around). They’re also rather good on service, though it’s a pain if you want to call up with a quick question (it takes ages to go through the automated numbering thing, which is a cost to bear in mind, as it’s not a free line – so bonds take longer/cost more).

Best Invest post RDR charging structure is out

https://select.bestinvest.co.uk/medi…ng_release.pdf

0.4%pa for ISAs and dealing accounts
0.3% pa for SIPPs

Applies across investment types (funds and shares). Lower rate for investments in an account above 250K at the marginal level.

£7.50 dealing cost for shares
£0 dealing cost for funds

They are very good value (or should I Say Best Invest) for small to mid-value mainly fund oriented SIPPs (up to about 48K), and not good value for dealing accounts or ISAs. And there are cheaper places to hold share and ETF holdings.

Looks like they are hoping to pick up HL SIPP customers with their 0.3%pa vs 0.45%pa and offer to pay up to £500 of SIPP exit fees for those moving to them?

The rates for investments above 250K are marginal rates and per account so you still pay 0.4%pa (0.3% for SIPPs) on the first 250K of your ISA or SIPP. Interactive Investor and ATS represent best value at high investment levels.

I’ve updated my spreadsheet to include Best Invest:

https://drive.google.com/file/d/0BxA6Przq6KI1dEJpTDJLUXNRMlE/edit?usp=sharing

Posts don’t seem to be registering today so I’ll keep this short.

Best Invest have announced their new charging structure

FIDEILTY NEW STRUCTURE:
– Fidelity have clarified to me that if you hold a Fidelity Sharenetwork account (i.e. shares outside an ISA) and a Fidelity share dealing ISA then you only pay one lot of £5.10pm charge.
– they’ve also confirmed shares and ETFs can’t be held in Fidelity’s main SIPP
– and ‘no confirmed plans’ to add Vangaurd funds to the platform

BEST INVEST NEW STRUCTURE
– there seems to be a concession for those existing investors with Best Invest who hold shares and ETFs that those shares and ETFs can continue to be held on their platform at the better of the existing custody charge and the new 0.4% (0.3%) charge (no concession for any funds held in addition to those shares, that part does switch over to 0.4% or 0.3% charging. Details are sketchy at the moment.

I also made some posts yesterday, which did not appear.

We’ll fully update the table next weekend as most of the runners and riders are in now. Hats off to Snowman for his invaluable contributions.

Excellent website and great spreadsheet Snowman, it’s been very useful as I’m looking for a cheaper platform than Hargreaves Lansdown (not difficult). I’m finding that Interactive Investor looks very attractive on price (as does IWEB). However I don’t believe Interactive Investor will be able to offer this value from April when clean class funds kick in for all new purchases and conversions from dirty. I assume they will have to pay a fee to Cofunds who run the platform. At present on dirty funds they rebate all the trail commission (about 0.5%) and half the platform fee (about 0.12%) the remainder of the platform fee (about 0.12%) goes to Cofunds. So I assume from April on clean class funds they will have to raise this 0.12% from somewhere else. Am I right in this assumption? I expect IWEB are in the same position. If this is the case they will have to restructure their charges.

On another point Interactive Investor aren’t going to release details of how they are going to convert dirty classes to clean until the end of March so I don’t know whether this service will this be free.

@Contrarian

You are right there is a puzzle about how II can afford to pay Cofunds where the investor has clean funds. But this has been true for more than a year, as they have been selling clean funds for 12 months or so. II has confirmed it has no plans to increase current fees. I can only conclude that their business plan is based around dealing fees.

Where did you see that they will be doing conversions? (Up til now, they have left it to the investor to sell the dirty class and buy the clean class.)

I contacted II earlier this week and they told me their management team was still sorting out their conversion policy and an announcement would be made to their members at the end of March. I believe if an investor sells a dirty fund and buys back clean this could be subject to CGT. There would also be two dealing fees (a sell and buy). Other platforms offer this conversion free of charge and there is no liability for GCT, according to the HMRC.

I thought IWEB looked cheap with no platform charge for funds, just a dealing charge of £5.00. So for example if you held any size fund portfolio in an ISA and/or Dealing Account and did not trade (unlikely I know) there would be £0.00 costs. Am I missing something?

@ivanopinion
I noticed on your spreadsheet that for IWEB and Halifax it calculates the transfer out fees for ISA and dealing account as £25 per stock with a maximum of £125. When I checked their charges I could see no maximum – where did you see this?

Hi all,

Have been looking to start investing for the first time and so have been researching a potential online broker. With plans to invest my max ISA limit (£11250) in a couple of growth funds and 3 or 4 stocks which would include those from the USA. I would only then trade very occassionally if at all. IWEB seems to stand out as the only broker that will deal internationally, with zero account fee & very cheap trades. Am i missing something in presuming that i can perform these 6 trades for 6 x £5 + £25 + fx cost. and thats it?
II appears a good second option if i drip feed the same trades over 2 per quarter which i believe would equal no more than £80 p.a + fx?
Lastly on trying to apply for an IWeb account, it says new customers cannot have Fund ISA’s – only a share trade account.. Does that mean they no longer cater to my needs?
Great articles and comments here, hoping to learn from you guys. Thanks for any help. Dan

While RDR will probably help in the long run, it feels like a lot of extra effort in the short term for a wannabe passive investor! I can well imagine having to switch several times in the next 2-3 years as the competitive situation causes brokers to adapt their pricing, or go to the wall – and some surely will.

Can anyone explain why there is such a variation in the range of Vanguard funds which platforms/brokers offer?
Some seem to offer only a subset – I would have thought that they would offer none or all.

And is it safe to assume that a clean-class fund will have the same AMC charges regardless of where/how it is held? There seems to be a real lack of information on what the clean-class fund variants will look like.

Hargreaves Lansdown attempt to double up charges for those holding investment trusts has misfired. They have backtracked on their separate charge for investment trusts. They will now be treated as shares for charging purposes (which is what other platforms do for the obvious reason they are shares).

Is there an Excel/Google Docs version available of the Platform Fee spreadsheet? I can only see a PDF.

I currently have (with Hargreaves Lansdown) about

£80k ISA
£40k SIPP
£40k Dealing

And almost entirely invested in Vanguard. Not sure which platform will be cheapest now!

Cheers all
Sandy

@Sandy

Depending on the version of excel/operating system you are running the spreadsheet may open as a read only document. If this happens then in the document click on File then Download. If you get a pop up message on screen, then click on Open. The spreadsheet will open in Excel but in view only mode so click on Enable Editing at the top of screen.

I Hope this helps.

@snowman, II do allow regular savings into funds via direct debit (confirmed in an email to me) that are purchased on the same day each month for £1.50 per fund (per month). So 2 purchases per month will cost a total £36 out of the £80 trading allowance. This leaves 4 trades per year for top-ups with buy-and-hold Vanguard LS and a total cost of just under £80?
With the family option, it is possible to purchase one fund per month each and bring the per person cost with II down to £40 (with £2 each lost as unspent) as long as there is only one trade per quarter across both of the family accounts. A bit extreme, but very passive!

@Gaz

I can confirm that you can’t spread your free credits across your family. You can choose whether to ask II to link A to B (in which case B pays the £80 and gets the credits) or B to A (in which case A does). You can even switch the linking direction, so that a different person gets the credits. But, before anyone suggests it, I think they would take a dim view if you switched back and forth regularly, so as to share out the credits over time.

@The Investor

I’m still suffering from posts failing. See The Slow and Steady passive portfolio update: Q4 2013

are dividend reinvesting costs something to be concerned about? – i haven’t really got a handle on how they impact the big picture..

e.g. what is the impact of one platform not charging for this, another charging say £5 and another charging 1%?

@Naar – Good spot on the Vanguard funds with iWeb/Halifax. I’d ruled them out previously due to the few available. I’d like to contact them regarding that ISA decision though.
@The Investor – That is a huge amount of spam. We really do appreciate all your efforts and wisdom on this site. Keep up the good work. Same goes for The Accumulator too of course.

@ivanopinion hang on, so dividend reinvesting is only of interest if you hold shares or ‘income’ as opposed to ‘accumulation’ type funds? i.e. where you end up with some cash in your account when dividends get paid

I only hold accumulation type funds so maybe dividend reinvestment charges are irrelevant to me? I never see any dividend payments – they all get handled ‘within-the-fund’ as it were?

on a tangent – are etf’s divided into ‘income’ and ‘accumulation’ types too?

@ivanopinion cheers, this article may be relevant to anyone similarly dim-witted as me – http://monevator.com/income-units-versus-accumulation-units-difference/

Did you see that on MSE, or somewhere else? Just wondering how far it has spread. Once it becomes widely known that you can bargain them down to 0.2%, capped, I rather think their share price might be falling further. If I was into that sort of thing, I’d be going short on HL shares.

@ivanopinion sorry – to answer your question, yes i read the thread on mse that started off about HL waiving exit fees and ended up with who has had the best retention deal dangled under their noses. snowman of spreadsheet fame made several appearances – it was a *very* long thread but some interesting bits and pieces in there for sure!

I just got off the phone to Halifax share dealing. As mentioned earlier, they have added many more Vanguard funds, but currently they are not all showing as available for investing within an ISA. However, the dealing team informed me they are still updating their system and so the Vanguard funds will be available within an ISA shortly. Great news! They also use Cofunds.

@The Rhino – I was thinking last night how HL mentioned they host a few ISA millionaire portfolios and wondered what would happen if their large customers decided to leave. Negotiated rates by the sounds of it.

@The Investor – I wonder if you are able to add some form of CAPTCHA system to submission forms?

Naar – you could take advantage of the commission countdown offer Halifax offer. Basically once a month they cut commission for buying and selling to under a fiver for a few hours. This could be useful for rebalancing a larger portfolio.

Great work on today’s updated list of brokers. Note that iWeb are removing their regular investing service “due to low demand” with effect from 31 March ’14.

Good for column now updated.

Yes, Fidelity’s charges are capped at £2000, so millionaires know that they pay no more for anything they add to their £1m pot, but that’s still a huge amount more than you would pay with II/ATS/iWeb, so not a good deal for millionaires.

I have just spoken with the Share Centre and purchasing of funds incurs the same costs as shares, i.e. a transaction charge of 1% min £7.50 or flat £7.50 if you pay the £20 quarterly account fee – not free as the comparison table suggests.

@accumulator – no worries, note share centre also have a third option, regular investment at 0.5% min £1

its so frothy at the moment its hard to know whats going on – part of me thinks its worth holding on for several months more regardless of impending charging changes just to give things time to settle down

iweb and iii are a really obvious choice on cost but they have some really awful customer feedback out there

how much should you weight stability, customer service/interface and all those sort of difficult to measure intangibles? its a quandry for sure!

Hmm, I’m getting a bit lost in the table. For someone who has 8 index tracker funds (and likely will not be trading shares/ETFs etc), around £25k, and regular monthly contributions, where would I be better served? Currently with CavendishOnline but I’m having real issues with them and Fidelity sorting out my account which prompts the look for a better broker/platform etc. I do like the look of Fidelity and Cavendish but cheaper is always better.

I initially thought ‘Charles Stanley’ but under ‘good for’ it mentions only for under £23k portfolio. And Cavendish for ‘pensions’. Any advice would be hugely appreciated.

Is there an advantage of Charles Stanley over Cavendish or vice versa for a fund only portfolio? Fee wise they both seem to be around the same unless I’m completely missing something? Charles has exit fees but carries vanguard, whereas Cavendish has no exit fits, but also no vanguard funds is the main difference I see.

My understanding is that any time you buy or sell a fund/shares, it is a trade and you will be charged accordingly. For example, if you invest £1000 per month into a fund, that’s 12 trades.

@damian – I think that your priority shoudl be to reduce the number of trades you are doing – I can’t imagine any broker being a good option at that level of activity! There might be someone who still provides free trading for funds (Hargreaves Lansdown? Best invest?) but then you will be back to paying an uncapped % fee – might be worthwhile depending on size of portfolio. But it would probably make more of an impact on your costs if you organise your trades so that your total costs (platform fees plus trades) are less than 1% of your portfolio. this could be done by a) reducing the number of funds b)rotating your monthly trades around different funds or c)making fewer larger trades – quarterly or even less often.

@damian – apologies for my knee jerk reaction to your trades! I see that there are actually quite a lot of brokers, including CS, who offer free trades in funds. I think what TA was trying to say was that the more you purchases/sales you are doing, the better value CS would be (as the other options with trading fees would become increasingly more expensive) – but agree it is a bit of a brainache trying to model fixed fees+trading fees against free trading+% fees.
I suspect your reading of the ‘chargeable trades’ for CS is irrelevant if you are only buying funds which are free to trade. So your only cost is the 0.25% of your holdings (if not in a SIPP).

If I understand the information about III correctly, if I shift both my and my wife’s ISA accounts (currently with HL) over to III, then we would only pay the £20 quarterly fee before any trading. Are junior ISAs able to be lumped into this as well? Our trading frequency is quite low, we put in the full amount of ISA allowance each year and would probably be mostly investing in the Vanguard Lifestrategy funds. We dont have any ETFs and only a couple of actively managed funds and investment trusts. If the junior ISAs can also be lumped in with this family account then III is looking pretty attractive, especially as our invested amount increases. The ‘free’ quarterly trades should accomodate a bit of random trading here and there and then we can set up regular investments for £1.50 per month (assume per account) for drip feeding into the main Lifestrategy funds. Any comments?

@Heisenberg I believe the £80 dealing credit is only applied to one account and I’m pretty sure if they don’t allow you to split or transfer it between you and your wife. You’d be best to get the credit applied ot the account where you do the most dealing and then maybe set-up a quarterly investement into the VLS on the other account to keep costs down (reducing buying costs from £18 (0.15%*) to £6 (0.05%*) a year)

*assuming full ISA contribution of £11,880

For the first year (assuming you move in over £3000) each of you will receive upto £120 trading credit so this could be used to cover any regular monthly or one-off trades. Say you transfer in 10 lines of stock, you’ll receive £100 split across each quarter, so £25 every three months. After year one only one of the accounts will need to cover the costs of any trades.

Not sure on Junior ISAs, maybe worth putting in a call to their CS as well as confirming the above, this was how it was explained to me yesterday, however, as I’m transferring in my SIPP as well I won’t recieve any ISA dealing credit as I just pay the £144 SIPP fee.

My ISA is currently with HL and I want to transfer to iWeb. I only have 1 fund with 8k in it (Vangaurd LS 100%) and I’m trying to work out if it’s worth paying the transfer costs, or if it’s better to transfer it in cash and then pay the 0.16% dilution levy again. If the costs were the same I would actually prefer not to pay HL the exit fees since I despise those kinds of charges, but from my calculations it seems a small change in the market could cost me more than the £25 fee. Any thoughts?

I’m seeking the best provider for a SIPP of around £70k, with infrequent contributions, parked in the Vanguard Lifestrategy fund. It’s currently with HL but I am still trying to figure out the current best alternative . Is it III?

So this is a fascinating and hairy table; as a BestInvest ISA and SIPP customer with predominantly Vanguard funds I’m seeing my charges go up fivefold under the new charging structure, but the cost of moving out the mess of funds in my SIPP would be extremely expensive.

I spoke with BestInvest who have proposed a selection of ETFs and Investment Trusts that ‘replicate Vanguard’s tracking error’ (but don’t replicate their low TERs!). They’d then charge a flat rate custody fee of £100 a year for the SIPP and £50 for the ISA.

I’m going to have to construct my own complicated spreadsheet to work out the relative cost and benefit of this, compared with sticking with the 0.3% fee, compared with moving to a lower cost provider. It’s incredibly frustrating since I’ve been trying to follow Tim Hale’s low cost approach, and BestInvest have (in some cases) more than doubled those costs. Gah.

@luxe just use snowmans spreadsheet – he’s done all the hard graft for you..

Excellent resource – thanks.

Regarding crowdsourcing – how about releasing it all as a google spreadsheet that anyone can edit? You might find it would get populated quite nicely.

Paul

Lesley, from what I understand funds with HL have no cap. The cap only applies to ETFs, ITs, shares, and bonds. If you had 3 funds with 30k in each you would be paying 0.45% of 90k = £405. I’m sure the fixed fee providers would offer you better value.