Broker comparison: cheap investment platforms UK

Does anyone know what the minimum investment amount to Vanguard funds is through Selftrade? According to their website it’s whatever the fund managers have set it to and according to Morningstar that’s thousands of pounds. I’m only looking to do small (~£50) monthly investments to different Vanguard funds. Anyone know if this is possible? Currently I’m OK doing that through Cavendish. Thanks.

Hello,

I have two holdings at SAXO broker. I bought these two holdings a few years ago and now they are worth 2,000 EUR together. I haven’t done any trading since then and don’t plan to as I plan to start regular monthly investing into an ETF i.e. become passive investor.

Saxo is charging me inactivity fees and I want to avoid this. Can I just close the SAXO account? Does that mean that my holdings will be sold? I should probably choose another broker but which one in my case?

Thanks.

@London Rob – I have multiple ISAs but I am not religious about keeping each under the 50k threshold; similarly with holdings in individual funds. Doing so would force me to have more ISAs, probably paying more in platform fees as a result, plus the extra effort and cost of shuffling funds between them to keep under the limit (the idea of a partial ISA transfer scares me) and even the difficulty of keeping an eye on them to notice any irregularities. Of course, optimal from these perspectives would be a single ISA, so it’s a trade off. My personal rule of thumb is to aim to have no more than 1/3 of my net assets with any one fund or platform and ignore the 50k threshold beyond that.

@Steve Do you include property in your net assets? i.e. say property comprised 2/3 your net assets, some fund the remaining 1/3, would that be sufficient diversification according to your 1/3 rule?

Or would you further divide the 1/3 of your net assets that sit in a fund into 3 funds across 3 brokers?

@The Rhino/Steve et al…. there’s actually really no need to worry about your IFA (or to spread your assets around several IFAs, for that matter). I’ve investigated this matter thoroughly (with the help of a couple of knowledgeable pros on the inside, and a couple of letters to the compliance officers at three IFAs) and the simple answer is that, it’s not your IFA/platform you have to worry about, it’s the custodian bank. Any cash you hold at the broker/platform will be held in a separate client account at their bank – that’s covered by the usual £50k limit. If you’re sensible, you keep that figure minimal (I always whip any spare cash back to my current account, then debit it as and when I need it on the platform). Your stock and bond holdings, on the other hand, are not held by the broker/platform/IFA – they’re held by a custodian, usually one of the biggest American banks (JP Morgan Chase or whoever), so it’s pretty unlikely that they’re going to go bust. Even if they did, the FCA wouldn’t leave you high and dry – they couldn’t ignore a disaster on that scale. If you really feel the urge to spread your investments across brokers, do it only to spread the risk across custodial banks, not the brokers themselves (ie it’s pointless using Hargreaves and Interactive Investor if they both use the same custodian!).

@The Rhino – thanks for your kind words. As I penned that comment the words ‘black swan’ were almost on my lips (notwithstanding my slight distaste for the bombastic style of Mr Taleb, he *does* have a point). But yes, you can only be so paranoid. I think *one* failure is possible in isolation – I believe our host has mentioned one or two such (won’t mention names lest my memory be faulty) where 85%+ of funds were recovered once the dust settled anyway. Once you hit two simultaneous failures you’re probably hosed, everything else is going down too and no diversification will save you.

I should have said, it’s not *just* the ISA transfer rules which make sticking to 50k per ISA impractical, the fact is you’d be paying so much pa in fees on (say) 500k split into 10 ISAs your paranoia is costing you serious money.

@Susan – what you feedback makes sense to me. However, once you start looking at custodian banks then the world suddenly becomes very small. Most as you say are American – could Lehman history repeat itself? It is possible I suppose! There is a great deal of overlap between various organisations association with custodian banks and how easy is it to keep tabs and stay on top of it for the likes of us. I find it impossible.

All in all, I find diversification from this particular point of view completely impossible to manage. GASP …. In my wisdom 4-5yrs ago I did some research on this and consolidated about 90% of my “liquid” assets in the STOCK MARKET with one broker. The reason – to be able to manage the portfolio in a coherent manner and make it easier to keep tabs. And, of course make significant saving in fees charged. Now the thought of splitting it all has paralysed me completely. Just can’t get myself moving on this.

@Steve – like your approach. It’s a lot more manageable.

@Susan – I’m not sure why you mention IFAs (Independent Financial Advisors) as these are neither brokers nor fund managers. Are they relevant, have I missed something?

Also, I don’t think holding significant cash sums with a broker is relevant as I don’t do it (does anyone?)

My worry is:

a) broker (aka platform) goes titsup and somehow I lose assets (is this possible?)
b) broker (aka platform) goes titsup and I am illiquid for a time while it gets sorted – I’m pretty sure this is possible
c) fund provider (e.g. vanguard) goes titsup and somehow I lose assets (is this possible?)
d) fund provider (e.g. vanguard) goes titsup and I am illiquid for a time while it gets sorted – I’m pretty sure this is possible

when I say lose assets, I don’t mean cash, I mean funds/etfs/ITs etc.

obviously its a) and c) that are the real concerns but b) and d) could get me to diversify as well at a push

if i confidently knew the answers to these questions then I would be in a position to do something sensible, and it may well look like steves rule of 1/3s. I’m still not quite convinced about it all yet..

@Susan many thanks, I wonder how you might go about linking custodian banks to platforms and fund providers?

@TI I can see for the active investor i.e. you, periods of illiquidity are unacceptable. Maybe this is less true for a lazy passive investor, i.e. me. If you have sufficient cash in the bank, and could put up with a year or two of illiquidity, maybe (and this is a genuine maybe) there is no real need to diversify across platform/provider? The juice is not worth the squeeze as they say.

@The Rhino – just ask your platform who their custodians are. The people on the phone won’t know, so don’t even bother asking them – just Google the head CFO for the company and call/email/write and ask. I emailed II because I was able to find the guy’s email address on a professional association website. Yes, keep enough cash to hand for living purposes and don’t worry too much about the rest. Not worth the effort, as you say.

Note that SVS XO have recently put up their dealing commission from £5.75 to £7.95, without telling their existing customers (a 38% increase!)..

@ Susan – the FSCS limit of £50,000 does cover investment funds.

It’s not correct to say that if you’re broker / platform went belly up that you are necessarily protected. They all have small print in the T&Cs pointing out that this is not the case. Here’s an example from Cofunds:
“As with any FCA regulated investment firm in the UK, while it is highly unlikely that Cofunds were to become insolvent, or cease trading and have insufficient assets to meet claims, we can’t provide a 100% guarantee that your money is fully protected.”

The poster child for this kind of disaster was broker MF Global who committed massive fraud by dipping into supposedly segregated customer accounts: https://en.wikipedia.org/wiki/MF_Global#October_2011:_MF_Global_transfers_client_account_funds_to_its_own_account

To the best of my knowledge, this hasn’t happened in the UK but best to know that the worst can happen, and all promises can be broken, however unlikely. Steve’s rule of thumb is a nice balance between paranoia and wishful thinking.

@ Michele – I’m sorry but I don’t know whether these brokers will deal with non-UK residents. Seems like a fair chance that the biggest ones would be happy to accept EU customers. Try TD, Youinvest, HL, Halifax, Charles Stanley for a kick-off.

@ Peter – you can transfer your holdings without selling in most cases. This is often called transferring ‘in specie’

Hello,

I tried once but nobody touched my question. Don’t know if it’s a stupid question and not worth your time or too hard to answer 🙂 Hopefully a good soul answers this time.

I have two holdings at SAXO. I bought these two holdings a few years ago and now they are worth 2,000 EUR together. I haven’t done any active trading since then and don’t plan to as I plan to start regular monthly investing into an ETF i.e. become passive investor.

Saxo is charging me inactivity fees and I want to avoid this. Can I just close the SAXO account? What happens with my two holdings?

Thanks.

Peter

@ Susan – I appreciate it’s unlikely, and your description of the system is detailed and reassuring – but nevertheless it is possible for any system to fail.

Cofunds small print is clearly saying that you may not get your money back if they became insolvent.

That’s because their lawyers won’t allow them to claim the system is bulletproof, regardless of their fate. Fraud, incompetence and systematic meltdown are all possible.

MF Global – the distinction here isn’t between cash or some other asset. This is a case study that shows the worst can happen. The solution is to diversify but not to the point of paranoia.

You’re right, DeGiro is Dutch and seems to have a pan European operation. I haven’t tried it but have seen some good write-ups on it. The International Investor is a blog that is worth your while checking out for these kinds of options. Monevator is stronger on the UK scene.

X post – just bought LS100 in Selftrade in an ISA and was going to ask whether that constitutes a trade and therefore no trading inactivity fee?? If anyone can answer that would be mega. Looks like their minimum is 1 unit as i couldn’t buy £100 worth but it let me do £150.

hi all,
Great source of information website….
I’m 43yo and my current employer contributes a dismal 1% into pension (aegon provider – Universal Lifestule Collection – 1%fee). I am thinking of increasing my contributions to as much as possible to optimise the deductions of NI contributions. I am also thinking of switching to another fund which charges less.
On top of that I’ve got 20K lump to start a separate SIPP and plan to drip feed any monthly leftover to the pot (plus the minimum contribution required for the SIPP). For short term I would kind of rely on my 100% offset mortgage should I need cash for an emergency .
I am thinking of opening a SIPP with either BestInvest or Cavendish Online (they seem to be the cheapest) and start with Vanguard LifeStrategy 80 or 60 Acc (until I kind of really understand how this whole thing works). Then might add another fund(s) to the pot.
Can anyone comment on BestInvest and Cavendish Online? Does this seem okay?
Thanks in advance

If it hasn’t been mentioned already, since 1 December, SVS has been charging £7.95 per trade (up from £5.75 as listed above).

Any specific reason IG isn’t listed under the share-dealing brokers? They charge £6 a trade providing you make one spread bet in the previous month, otherwise £9-£12 depending on the number of trades, with no other account-running charges, which seems very reasonable.

Hi all
I am a new beginner, and would like to know how to start trading and which broker to start with an investment amount of £50-£100

Hello there,

I have recently stumbled across your website and I must say that it is very informative for a new investor such as myself, albeit making me realise my hasty investment choices on HL were not the “best” options available to me and my currently low-middle budget.

Anyway….

My main question is that I’m 22 years of age and a friend of mine who works in finance swore by god himself that HL was the best platform for me. After creating a stocks & shares ISA with HL, putting £100 in a index and the remaining £300 of my initial £400 onto two separate shares I am now debating if I should just take my losses and go to a different platform.

This site has pretty much cemented the idea of passive investing in my mind and given that I like most new investors do not know what the hell I’m doing, I would rather pursue this style, rather than the “harder” approach of stock picking.

Bearing in mind I don’t see the shares chosen as being “bad” shares. I can happily leave them there for 5 years as planned or I would be comfortable with doing the DIY selling method, albeit accepting the current loss of around 50-60 pounds, (£11 being my own fault with dealing charges, but now Ive learnt my lesson)

I do ramble way too much..

My main questions are:

– I don’t believe that any time soon will I be over 20K in my investment “pot”, given such information, which options out of Cavendish/Charles Stanley would be beneficial? Also are there not any benefits to using fidelity? That looks good to me.

– I would like to start looking at mainly funds, trackers, ETFS etc asap once on my new platform, however I don’t fancy paying £30 to leave HL, plus 25£ per share/fund etc I have. In total that would amount to about £105, just to leave a site, seems pretty crazy to me.

Ive read that I shouldn’t really be asking for investment advice on here if I’m correct. Does someone fancy putting me on the right track so I don’t sit here feeling like I have the IQ of a Potato.

Many Thanks

@The Accumulator.

Thanks for the pick me up, it is frustrating. You feel like you are reading a book, yet you can only understand certain words and whilst you enjoy reading this book, you would like to be able to understand it fully so you can go further with it.

About these different platforms, HL seemed to have the most choice, which is why I did go for that, however if I am mainly going for Index’s and funds, what would you personally recommend?

If HL does not charge me until my first 250K as stated (Platform charge of 0.45) then I am only paying on the ongoing fund and tracker charge, not to mention share dealing costs, however I wont be touching those anymore I think.

The Legal & General All Stocks Index-Linked Gilt Index which is my only charge (I believe) is only a net charge of 0.10% so if I were to go over to say. Cavendish, and BAM, every year I receive a default 0.20% charge, along with a ongoing 0.05% surely im losing more money? Not to mention a AMC charge, service fees etc.

Im so confused, it doesn’t help that my maths skills are basically non existent.

I could leave it, but I can afford to switch over if I would be having less money lost in fees in the long run. I guess I just want to transfer now if a better deal is on the table, yet keep the ability to trade and not have to wait weeks & weeks, yet if possible minimize the fees that I may have to pay.

I want my cake and I would like to eat it now haha.

@TA,

Ahh right I see, initially I thought it was 0-250K but that did seem a bit much. Regarding HL I do notice that whilst it perhaps is the most known and does look quite user friendly, when searching trackers, I noticed there was a large difference between that and say, Cavendish. None the less, if my payments only amount to 1.80 I think I can deal with that just fine, your previous comment of waiting until April to open another ISA does make more sense in that case.

At what point would you say it becomes cost effective for me to transfer over to a different platform? Cavendish Online does look like the best option for me I would say by looking over this post. I can invest £250 per month quite comfortably for the foreseeable future however £100 would be my minimum and £150-200 would most likely be the average. Max would be £750 on a good month, but that would be rare. Im fine with having the lone wolf approach when it comes to customer service provided I have the foundations built correctly. May I ask what platform you currently use for your passive investment series that ive seen on this site?

I just want to note to you personally that I appreciate the replies and direction you are giving to myself, I have a few friends also interested in the wonderful world of trading and will definitely direct them to this website as I did not expect such “service” if you like when asking my initial questions.

RE: Maths, yet another post from this site that I will bookmark, many thanks!

I invest through Fidelity. If you buy an ETF through them, there is a 0.1% dealing fee, but the 0.35% annual service fee is not applied to an ETF. Info about this is here: https://www.fidelity.co.uk/investor/funds/fund-charges/charges-questions.page

I also confirmed this with them on the phone. From February, they will charge a flat fee of £3 a month for holding any amount of ETF-invested money with them, if it is within a SIPP or an ISA. If it is not in one of those, they do not charge the £3 per month.

This seems almost too good to be true. I wonder if anyone can confirm that my understanding of this is correct?

I am disappointed that their ETFs contain almost no Vanguard funds, though their IShares range seems good. Has anyone got a recommendation of a better platform, choice-wise and fee-wise?

Hi and thanks for this great resource.

I began passive investing last April and now have about £10k in 3 funds with Charles Stanley (chosen with the help of this table, thanks). I’m only buying Vanguard LS funds for the foreseeable future. I have a fixed rate cash ISA that will mature in May 2016, and added to my projected future investment rate of about £1k/month, it will quickly put me over the £20k ISA point for a percentage broker fee at CS. At first I assumed I should just transfer both my cash and S&S ISAs to a flat fee broker, but would it be as well to keep my CS account going, paying in monthly to the end of the tax year, then open a second S&S ISA at Cavendish to pay into monthly, and then transfer the cash ISA to Cavendish and put my new money in there from then on? It would take me until at least May 2017 to get near £20k in both platforms so I could reassess things then. Does that make sense or am I missing something?

I’m also weary of putting a lump sum into my S&S ISA rather than drip feeding (well, £6k feels like a lump sum to me, but maybe it’s small potatoes?). As I am unlikely to use my full ISA allowance this year or next, would I be as well increasing my drip feed until the end of this tax year (from savings, to be replenished when the cash ISA matures), and then increase the drip feed in the new tax year to the new ISA, meanwhile letting the ISA money sit in my current account at 3% interest until it has all dripped into investments?

Thank you in advance for any thoughts.

Hi Student Investor,

AndyR is absolutely right but I would add there’s no need to move until you feel the differential between brokers is worth the hassle. For example, if the percentage fee costs you £10 per year more than the % broker then is it worth it?

To compare a flat rate fee against a percentage fee then use the following calculation:

Total costs of broker 12 divided by broker 2 percentage rate = breakeven point

Lump sum vs drip-feeding. I heartily recommend this cracking article on the topic:
http://monevator.com/lump-sum-investing-versus-drip-feeding/

There is a discrepancy between their charges shown here (which are currently same as in table above):

http://www.halifax.co.uk/sharedealing/charges/stocks-and-shares-isa-charges/

And this which I am presented with on going through the application for a new S&S ISA account:

“Fees and Charges
The service fee and ongoing charge are the same for our Stocks & Shares ISA and our Investment Account and both apply to each product.
…[service fee of £3-£20 per month based on valuation of portfolio]…
The Ongoing Charge for each fund is 0.45% per annum of the value of investment in that fund.”

And just under that:
“From 1 February 2016 the Service Fee is changing. It will be 0.24% per annum of your investment valuation. The minimum fee will be £2.40 per year, and there will be no maximum fee. We will be writing to all our customers to confirm these changes.”

That would put them at 0.69% overall annual fee, which is absurdly uncompetitive.

Yeah, thanks to premierfella for working that out. The expensive fees encountered by Rob do indeed apply to their “pre-packaged” ISA as can be seen here (in the blue box):
http://www.halifax.co.uk/investments/our-investment-products/investment-isa/

I’m quite relieved!

are you aware of the changes to isa rules next tax year. I understand it like this: within the tax year, I can invest my allowance on day 1, withdraw it with gains tax free three months later, then invest the complete allowance again. then, at the end of next tax year, the account basically freezes i.e. i cant change the composition any more, but withdraw everything whenever i like.

however, i dont think this applies to this years isa. my problem with halifax is that they dont provide a flexible isa. your comparison table regarding the providers has been really helpful, but I couldnt find this information in it. are you aware which provider do the flexible isa next tax year?

Regarding Aron’s post:-
Just noticed on my Fidelity SIPP there is an option to ‘rebalance’, and you can just put in your allocation % and it’ll work it out for you.
Not sure if this is available on the ISA as I have moved from them, but this seems new. Haven’t seen it before.

I have been with Fidelity for a couple of years and this has always been there. In fact I do not like it as it is the only way to change funds online i.e. if you had £2000 cash in your SIPP and you wanted to buy Fund X you actually have to submit the whole portfolio for re-balancing and work out the £2000 as the % of the whole portfolio to assign the % to Fund X. Likewise if you want to switch from Fund A to Fund B requires a re-balance of the entire portfolio. I hate their system.

iWeb have an exit fee £25 per stock, maximum £125 http://www.iweb-sharedealing.co.uk/charges-and-interest-rates/share-dealing-account-charges.asp
Thanks!

Exit fees from Cavendish and Fidelity are really £0 for funds? Pants! I read elsewhere there were big costs so hadn’t moved my portfolio which exceeds the ‘good’ range to iWeb

Question – does anyone know if any brokerage companies that will send account statements to a third party? If I want to trade stocks, my employer requires this, but so far I have not come across a broker that will allow this.

Sorry I am a a bit dense… per the summary from The Accumulator what is the best ISA above 20k if you dont trade (I thought I saw a comment that Funds dont count as trades so you pay the fee?)… SelfTrade still looks better (~42 fee pa) once you factor in the iWeb account opening charge.

Just planning simple strategy maxed ISA in Vanguard LifeStrategy funds for now…

@eagleeuk thanks they just won another 2 customers! 🙂

I think the changes at Alliance Trust will mean that ATS’ charges will be going up and probably the subsidiary will be sold off to someone with a less solid or visible balance sheet….so soon my SIPP will need to move elsewhere

My priorities are:

– low fixed charges
– a provider with a rock solid balance sheet or a systematically important “too big to fail” parent

Mrs Neverland and I already have some big SIPP and ISA holdings at Halifax/iWeb so it seems unwise to put more there

The only other option would appear to be AJ Bell but I am not sure I would want to place my money with an opaque private company, even if it is part owned by Perpetual. Anybody got any other ideas?

re: Robert

I notice on selftrade’s application form they include the option to have contract notes sent to your employer.

@sock

The others are ruled out for a variety of reasons including painful prior experience and having accounts there already etc.

I will have a look at Barclays tho, thanks

I use CSD for this very reason, as well as for their excellent account portal and customer service.

It’s actually better than you say because the 0.25% fee capped at £150 on exchange traded products is waived if making 6 trades every 6 months. If strictly adhered to that allows 12 purchase/rebalance trades annually for a fixed fee of £120 (excluding stamp duty).

So even if the trades themselves aren’t required it’s still worth making 12 tiny trades annually (to reduce SDRT to a minimum) and save the extra £30.

Having the 12 trade facility and effectively only paying for SDRT minus £30 p.a. compared to the capped £150 maximum is a really useful mechanic of the account which screams to be utilised but doesn’t easily or neatly fit into universal pricing/costing tables.

another useful search engine to compare broker charges for various types of investment accounts.

http://brokercompare.info/

@stuartb, good point & don’t think it is that obvious! I’ve noticed that Hargreaves more often than not have their own dedicated Class especially when they have negotiated discounted management charges.

With different Classes of shares, I find it quite hard to compare like with like or even spot what the differences are if any. (I am sure there are differences!)

Whereas up until recently (most likely pre RDR) you would see 3-4 Classes, now there are ever increasing number and it’s impossible to keep tabs. A couple of times I have invested in one class and then have discovered 2-3 new classes months after.

Also, agree with you that in the Monevator table it would be impossible to highlight a particular Class or flag proliferation of them. Though it would be very useful if TI or TA are able to through some light on the subject 🙂

ATS increasing its charges to £7.50 pm = £22.50 per quarter, which is a 20% hike, two years after two big rises. (From 1 May.)

@Kean – Careful, you are comparing to very different funds there: Income type and Accumulation type. The latter effectively re-invests the income, which results in higher unit price.

I have found the many of the lower charge classes aoffered by HL are available elsewhere now.

K

‘Gross’ generally means tax not paid. Fideulity KIID says ‘Gross paying shares may be held by, or on behalf of, certain eligible categories of UK resident investors’ which I assume means those below tax threshold.

@Snowman your point about Alliance Trust treating customers fairly by waiving exit charges is well made. I was rather hacked off when I got the Alliance Trust letter, and I would kind of like to jump ship as an automatic response to the price rise (and if nothing else, this is a chance to get out *without* having to pay the rather steep exit fee), but the range of flat free brokers is sufficiently small that I may end up staying with them after all. (It’s tempting to go to Motley Fool Share Dealing, who appear cheaper overall, but as they’re just Interactive Investor in another guise and II already hold my SIPP, I don’t want to put too many eggs into that particular basket. And if I did want to put them all there, I’d presumably be better off just holding my ISA directly with II and getting it for free along with the SIPP.)

@ Snowman – cheers for the ATS update!

Thanks Accumulator. I realised after I posted that ivanopinion had beaten me to it spotting the ATS update. So the credit should go to him for being first. As a customer I received a letter from ATS yesterday which is how I noticed it.

I meant in 4 years

I’ve just received a customer letter from Jarvis Investment Management Ltd saying that from tomorrow they will be offering a management fee free SIPP. So if like me your SIPP is invested in ETF’s only then this would appear to be the cheapest option available. I don’t believe Jarvis offer funds so this SIPP wouldn’t suit everyone.

More information required to give an accurate answer. Do you regularly pay money in? If so, is it a regular monthly contribution? Do you ever take money out? Do you hold anything else in the ISA?

A word of warning though about Selftrade, their reputation is less than shiny and the website layout and performance is truly horrendous by all accounts.

Probably the easiest thing you can do is to download and plug your numbers into Snowman’s Spreadsheet, it will calculate the platform costs based on the criteria you set.

https://drive.google.com/file/d/0BxA6Przq6KI1c1BhWDBfZXB2TFU/view

What it won’t do is tell you which has the best customer service, website, account portal features, information retrieval and stock market accessibility amongst other things.

@mikamola – I’ve had an ISA with Selftrade for a year. They haven’t charged for funds and have been responsive to my questions. I am going to use them for this year’s ISA allowance.

@SlowToLearn & ds1980 … thanks for your prompt responses – its helped to make my mind up for me and will give Selftrade a whirl. I have pretty simple needs to be honest, just chucking money into a vanguard lifestrategy fund on a monthly basis … whats the worst that could happen 😀

This is the link to Snowman’s spreadsheet I should have posted, sorry for any inconvenience caused.

https://drive.google.com/file/d/0BxA6Przq6KI1R3hTcUxnM29XaE0/view?usp=sharing

Selftrade are changing to percentage fee on funds:
0.30% up to £50,000
0.25% £50,000 to £250,000
0.15% £250,000 plus

Inactivity fee is up to £10 per quarter, small reductions in dealing commissions.

New charges here:
https://selftrade.co.uk/sites/selftrade.peterevans.com/files/selftrade_rates_charges.pdf

They waive the normal transfer fees if you notify them by 31 May 2016. I’ve got lots in funds and have had problems with their shoddy service so I’m off, which is where your comparison (way better than the standard ones just sorting by dealing commission) has been invaluable.

Selftrade have just updated their charges – secure message received yesterday 8th April 2016 (sorry about the big cut&paste):

Selftrade has always been proud of our commitment to providing transparent and straightforward pricing. We are now launching a new tariff to reflect that commitment, following our undertaking to keep prices the same for a year after the acquisition by Equiniti. We are further simplifying our pricing, providing a greater lever of transparency, and reducing a number of the charges. The new tariff will be effective 9 May 2016.

Being part of the larger Equiniti Group means that we benefit from scale and resource. This makes us more efficient and we are now able to pass those efficiencies onto you, through a reduction in our online dealing rates, lower thresholds on Frequent Trader rates, and standardising telephone dealing rates to our current lowest rate.

Following the changes prompted by the Retail Distribution Review and the industry move to cheaper “clean fund” classes, trail commission is no longer paid by the fund manager to us. We have processed a bulk conversion of holdings from the more expensive, bundled share classes to clean, cheaper share classes. To ensure we can continue to service your holdings, benefits, and reporting, as well as commission free purchases, while continuing to offer a wide range of funds, we are introducing a new fund platform fee.

We are also introducing a new, currency charge on trading in overseas securities which historically was incorporated in the share price traded.

Please click here to read the full description of the changes and what they mean for you.

Due to changes in our pricing tariff, it is our policy to allow customers who wish to transfer out of Selftrade, to do so without a transfer fee within a specific period of time. This offer applies to all customers from whom we receive a new transfer out request between Monday 11 April and Tuesday 31 May 2016. Any new transfer out requests we receive outside of this period will be subject to the normal fees.

If you have any questions about our changes to our pricing please either send us a secure message or contact our Customer Services team.

The number of flat fee platforms is dwindling!

Where are you switching to? Of the other flat fee platforms, Interactive Investor does not seem to do well for service. They make lots of mistakes, so you need to check everything they do and then chase for amendments. I mean everything – dividends, rebates, tax certificates, conversions. That’s not just my experience; there’s a huge thread on MSE about this.

I suspect that they might not dare increase their own fees, if this meant they had to allow free transfers out. There might be an exodus.

I used to be with ATS, who were OK. I guess YouInvest is another option, as it is effectively flat fee, due to the £200 fee cap. They get reasonable feedback, I think.

iWeb are a non-starter for smaller amounts, the (newer) £200 up front fee takes years to recover as you mention and it’s those early years that matter. Also if holding funds they’re relatively expensive for regular investing or even ad hoc top ups given several percentage brokers offer fee free fund dealing.

I already have an iWeb account which I opened for the old £25 fee that I don’t use for anything but a few speculative share deals.

Their customer web portal is dreadful when compared with others, although it still serves purpose if those things don’t matter to you.
I hold six figure sums elsewhere, I could save at least £60 a year on my IT income investment being with iWeb and choose not to.

What a hassle! I only just setup SelfTrade and now its time to move. My account is not so big (~25k but growing) so it is hard to pick – few pounds either way but I want to have something setup for the future.

Maybe Halifax looks ok? I trade infrequently so might be ok. Will have to put the numbers in a spreadsheet.

Could switching from funds to ETFs be the future for low-cost passive index investing? The last time I looked most ETFs seemed to be Irish-domiciled which worried me from a compensation point of view. That plus historical inertia account for my current use of funds instead of ETFs. If I’m not confused Selftrade are still flat-fee for ETFs, as are AJB Youinvest.

With ETFs, ITs and shares being free to hold in an taxable trading account with HL I’ve partially chosen this route.

It’s for one specific IT, an element of a much larger IT portfolio held with CSD in an ISA because HL allow me access to the US market, so after completing and posting the W-8ben form, which was no trouble, I just have to grin and bear the additional but reduced 15% US WT applied to dividend income.

Ideal for a relatively simple portfolio, or single IT investment in my case, if the income yield doesn’t exceed the new dividend allowance, which at a generous 5% would need a £100K valuation anyway.

Although HL don’t quite have the cheapest dealing fees, there are no other fees, onerous account linking or minimum valuation requirements. The service they offer is probably worth the extra pound or two dealing fee if only making one or two trades in a year. My plan is to just that and make no more than one or at most two per annum.

The Lloyds charges look good. Playing with their Research Centre, I can search find all the usual funds but not ETF’s… There must be a way… surely?

@Chris That Lloyds ISA looks great, they even have the fund I’m holding at Selftrade so presumably I can do an in-specie transfer. There has got to be a catch, surely?

hello, I want to invest in Vanguard Lifestrategy 60.
I want to put an initial payment of £2000 with monthly payments of £500.
I have two questions: 1) which is currently the best platform for this?
2) is it worth using the investment ISA tax wrapper for this? From what I understand it wouldn’t be relevant because capital gains tax limit will not be exceeded, but as I plan to continue investing in this for many years, it would be good to start putting away things in the ISA wrapper now for when the capital gains limit is relevant.

Where’s the edit feature for comments… “Not” should have been “Note”

@ivanopinion Re LLoyds v Halifax

LLoyds : Admin charge £20 x 2 = £40 (£20 per 6 months)
Funds online dealing £1.50

Halifax: Admin charge £12.50
Funds dealing £12.50

For most that probably means Lloyds is a better deal once more than 3 trades better option

There’s the catch, for me at least. I already have an ISA with iWeb which is another Halifax platform, so Lloyds offers no diversification. So I may have to make a difficult choice between a) moving to ETFs, taking on extra risk the fund manager goes messily under in return for cheap platform b) paying high fees for fund holding on eg Selftrade in return for diversification c) accepting the risk of having fewer platforms with more assets on each. Gah!

A few years ago I discovered that Cofunds may be used by different platforms as a nominee to administer funds on behalf of different platforms. (I believe it is used by Halifax, YouInvest and II. HL have their own nominee, as do ATS).

Anyway, a bit concerned about what I thought was good diversification among brokers on my part, turned out to not be so good if they all used Cofunds, so I telephoned the FSCS helpline to ask their opinion.

The answer surprised me, because it isn’t per broker!
Here’s a couple of examples they gave me: if you invest through 1 broker, say Halifax Stockbrokers in funds with 2 fund management companies, say, Vanguard and HSBC, then you are covered twice by the FSCS, because they said cover applies at the fund management company level, not the broker level. Alternatively if you invest through 2 brokers, say, Halifax and Charles Stanley, but buy funds of only one fund management company, say, Vanguard, then you are only covered once. Really not what I expected. The FSCS said they ‘look-through’ to where the money is being held, which is with the fund management group. They said the only exception to this was when the transaction was ‘in flight’, i.e. money was being handled by the broker until the moment it is invested, but from then on the cover applies at the fund management company level.

I hope that is useful if you haven’t decided where to invest any new ISA money this tax year.

This doesn’t make sense to me. For example, imagine a fraud scenario whereby the broker had never invested the money on your behalf. There would be no claim at fund level.

Search for brokers covered by the scheme here. Most of your faves are on it (N.B. I haven’t searched exhaustively)
https://register.fca.org.uk/

The rules say it’s £50,000 per person per firm found to be in default:
http://www.fscs.org.uk/what-we-cover/compensation-limits/investment-limits/
http://www.fca.org.uk/consumers/complaints-and-compensation/how-to-claim-compensation

http://monevator.com/investor-compensation-scheme/

The main thing that I would question is why Jarvis need to apply a refund of the annual fee and transfer in charge rather than just have it free and stipulate a charge that would apply if for some reason the SIPP stayed open but the X-O account was closed.

It would make me very suspicious about what might happen with this apparent generosity in the future (I’m thinking along the lines of “fee refund no longer applies” email and them at that time refusing a free transfer out on the basis that this was a charge in place when you signed up x number of months/years ago).

Hi Kris,
Entrepreneur First sounds awesome, hope the FinTech projects develop. Lots of areas which could be improved. I have accounts with Interactive Investor (SIPP) and Charles Stanley Direct (ISA). Definitely room for more comparison charts/analysis on Broker Comparison – Monevator has made a good start but more feedback in the Comments Section on ‘Good for’ going beyond ETF/Funds e.g. those using both ETFs and Investment Trusts would be helpful, plus more on the quality of the websites interface etc. Under intelligent portfolio feedback they should focus on individual asset allocation so you can immediately see how your own portfolio is diversified and if the percentages are starting to drift, then I would like to be able to compare say a date 12 months ago with now. I would like to see how Citywide Z scores could be incorporated so you could see when ITs are cheap to add to. Multiple account aggregations could be hugely improved, it would be awesome to compare ISA and dealing accounts in terms of asset allocations for example.

Hi @Bellabeck ,

Thanks for your reply and support! Yes Entrepreneur first is great, highly recommend.

Really interesting to hear your comments. I have some follow up questions if you have the time…

Broker comparison: So do you currently check the table above every so often for the best deals? If you could wave a magic wand, what would be the best solution imaginable for you?

Intelligent portfolio feedback: You mentioned it would be useful to see allocation drift. I’d be interested to know how often you rebalance on average and on what basis you decide?

Risk analytics: How do you currently measure exposures/risk across your various accounts? Do you keep track of how much risk/volatility you are taking and do you rebalance if your risk increases too much due to drift?

Of course anyone else is more than welcome to weigh in if you have thoughts!

Thanks bellabeck that’s understandable…would love to have a private chat if you don’t mind- I’m at: km13g08@gmail.com

@Ben
As far as I’m aware there are no issues with transferring a current year ISA other than it can’t be a partial transfer.

To be on the very safe side you should ensure that the transfer process is fully completed before making further payments into the “new ISA” – easily seen if opening a new one elsewhere, but something to watch for if you transfer it to iWeb where you have an existing previous year(s) ISA.

You might also have to manually calculate how much of your allowance you have left rather than rely on any number on the iWeb ISA screen, as its possible that might not automatically acknowledge that the Selftrade ISA was current year contributions.

@premierfella
This is helpful thank you – so I can do a full ISA transfer (Selftrade are waiving the fee if I switch before the end of May) to iWeb, and then once it’s gone through continue to make payments to iWeb for this tax year?

Hello, thanks for all the great information. I want to open a stocks and shares ISA. At present I have a sharedealing account with X-O and I’ve been making 1 or 2 deals per month. I’m approaching this as a long game and sticking with good companies. I am only planning in dealing in AIM shares at the moment.
I printed out your latest comparison table, but I’m not really sure which one suits me. I only want to trade in shares and I probably will only trade up to 5 times in a month. My portfolio will be under £25,000 for the moment. Any tips would be great. X-O still looks ok apart from the exit charges, but the cautious mentions here about price hikes in the future makes we weary especially with the exit fees. I’m young and learning so I want to have a decent amount of flexibility. Any tips would be great. Thanks.

Hi, a tip for the very cost conscious. I hold the bulk of my investments in low platform charge but high dealing fee brokers. Then a small amount (replica) of my investments in a higher platform charging but zero/low charge dealing fee broker. I can then use the zero dealing fee broker to re-balance, adjust, add to, sell etc.

@Jed
Good idea. I suppose eventually there comes a point where your portfolio with the high platform fee broker (HPFB) is big enough that the platform fee starts to hurt, so you want to transfer most of it over to the low platform fee broker (LPFB)? I guess that means a one-off hit of dealing fees with the LPFB?

And perhaps a big hit of exit fees, unless your HPFB has no exit fees. Or do you sell, extract the cash, then put into the new platform? Which means being out of the market for a few days.

Hi @ all, glad you liked my method i have been doing it for some time about 10 years with various brokers for the low charging deal side, I have stuck with one broker for the low platform fee side. I transfer as cash when the portfolio gets too big in 4 to 6K lumps. Yes I am out of the market but I sell and buy within minutes using the cash part of my portfolio as capital. My portfolio consists of only 6 funds therefore its easy to manage I will use either ETFs or tracker funds whichever works best. A portfolio with a lot of different investments would be really hard work. It works between Isas or Isa to sipp. Sipp to Sipp that’s one I haven’t tried and probably would work up to a point (the point being when you have to transfer). Big moves are not a problem believe me, the lot gets zapped or boosted pro rata. Look at the method as another tool that might be useful to you
@ Investor, guest post, thanks for the kind offer but I am always working and never seem to have time for much really (except for the odd rant on here).

@Jeffrey
I assume the brokers are reluctant to accept US citizens as clients because of FATCA? They are required to report the income and gains to the IRS and there are harsh penalties for the institution if they slip up. So, safer just to to turn away your business.

Would there be much benefit from having an ISA? The gains and income would be taxable in the US, anyway, so if you pay UK tax on them, this would just reduce your US tax and in total you would pay the same tax. Or is your marginal tax rate in the US lower than here?

I used to do tax advice in another country and some clients were expats, and usually it was their investments that caused most problems. Those clients were usually sent overseas by their employers, so they got “tax equalisation”, which means if their tax bill was higher than if they had stayed at home, the employer reimbursed them. But otherwise, tax on investments is a major impediment to international mobility (for those who have a reasonable portfolio).

Yes, it does seem tough to say that the price of retaining your citizenship means you should pay full whack, just like if you were living there and using all services provided by the state. AFAIK, the US is the only country to do this.

Thanks another great update. I’m with II and like previous comment earlier the service and site is just about bearable. I probably could get better deal with my modest portfolio, but to be honest I only trade 3 to 4 times a month using the regular investor service at £1.50 a pop – this stays within the £20 a quarter charge. Add to that I’m not far off the 28k the exit fees would eat up any potential savings in the meantime. So I’ll stay put.

What worries me (and sorry if I have mentioned this before) is what if one of these brokers goes belly up. Are our investments secure; I know technically we have nominee accounts so our money is ring-fenced, and records of all transactions would be there to pick through. So I suppose unless one of the brokers does something really dodgy we should be good. But I do wonder if its worth spreading some risk and opening a second account with a different provider.

I’m looking for a flat-fee (or capped) broker for my SIPP. Am still in the accumulation phase. III don’t really appeal, so I’m considering Halifax Share Dealing.

Can anyone tell me about their experiences with Halifax? They seem to do what I need but it feels like they require a lot of stuff to be done via post (amending monthly or one-off contributions etc). I’ve probably been spoiled by HL who seem to handle everything online, but long gone are the days when they used to charge me flat fee of £2/month! It would be nice if brokers had demo accounts online so you could actually see how they work before committing…

@dave – I’ve used Halifax for several years both for my ISA and my SIPP. Different accounts as the SIPP is AJ Bell rebadged but the front end is the same. Both work well and provide a wide variety of investment vehicles. I have portfolios large enough that the capped fees are very low. I trade infrequently. I don’t remember doing anything by post since opeing the accounts. If they’ve needed forms then I’ve scanned and emailed them. Valuation screen shows book cost, value now, percentage change as well as daily movement. Any issues I’ve found the support team responsive and helpful.

Thanks for all the hardwork here keeping this updated.

I’m finally getting around to ditching HL as well as the high charges, their service has really gone downhill – the last three requests I’ve made have been done incorrectly, as HL didn’t read the form.

Moving to Fidelity, which looks like a great deal for ETF’s (love the % trading fee, as I like diverse portfolio’s) and they cover the evil HL exit fees.

http://www.cavendishonline.co.uk/investments/fund-research/
lists the Vanguard LifeStrategy 80% Equity Fund as available there, and I believe BestInvest have it too.
The older posts probably just reflect the transition period from commissions to post-RDR charges, when some of the providers shunned funds that didn’t give them a kick-back revenue stream.

Hi, i’m a beginner investor but intend to max out my isa allowance each year and hold Vanguard Lifestrategy 80. I note Halifax offer a cheap platform but they informed me that they require a credit check first. I’ve recently got myself out of some serious debt so I have no credit score worth mentioning. I cant even open up a new bank account. But I want to invest the money I have previously been putting into my debt, instead of putting it into lifestyle inflation. So id be very grateful for any suggested platforms, without credit checks :)!

Thanks @playing with fire, that makes more sense re the credit checks.

@ Cam – Yes, your total costs are 0.54% with Cavendish. You can scour the Cavendish website to find out the difference but the upshot is they charge you 0.3% for their SIPP and Vanguard charges you 0.24% for the fund.

Best Invest also charge you 0.3% for their SIPP (check out the platform fee section of the table). Plus Vanguard charge you 0.24% – in other words it’s a dead heat.

the difference is that if you decide you want to leave, Cavendish don’t charge you an exit fee but Best Invest does. That would swing it for me, but check out their sites and see what you think.

Letter in today’s Telegraph:

“Last financial year, I paid £1,200 into a personal pension. I was charged £207.83 for the investment purchase, £80 for the wrapper admin charge, £287.38 for the adviser charge, and £493.04 commission. That leaves £131.75. I doubt I will die rich.”

I’m somewhat at a loss as to how that’s actually possible, never mind legal, and certainly not moral… Puts arguing over a 0.45% platform charge into perspective…

@Kris – Looks interesting. I’ve been searching for a decent tool to track my portfolio, it’s performance and do some basic analysis like checking exposure geographically, sector wise etc. I’ve not found a solution anywhere that lets me do that in any of the free or cheap solutions. Did find one really good one but it was almost professional grade and attracted similar fees. I don’t send all that effort making sure I keep my investment costs down just to blow a lot of money on a tool to track it. Will sign up and see how you get on and if i can throw any ideas in.

One of the key things for me is that I unitise it (in my excel spreadsheet currently) so that might be worth considering as functionality too if you haven’t already.

Cheers

Hi Everyone,
In addition to H-L, which platform has a good website ? Other providers are cheaper than H-L but their websites and research tools are poor in my opionion!
Thank you and
Regards
Max

AJ Bell Platinum offers a SSAS and trust-based SIPPs. I’m sure a lot of the “full service” brokers and “wealth management” companies will offer these, but you would no longer consider them ‘low-cost brokers’. I don’t have any personal experience but they are likely to charge significant percentage-based fees and will probably only accept large portfolios.

@Kris Milne
Two suggestions: do not make it log-in via Facebook only (Gaaaah!) and provide an ‘upload’ facility for importing Excel spreadsheets of portfolios. I am fed up re-typing into various tools.