Broker comparison: cheap investment platforms UK

Shares (and investment trusts) are free to hold in an investment account too, so it’s true on every front! Also, regarding the list of funds/shares available, I couldn’t find two ETFs I wanted to trade, so rang them up and they were added within the hour. Ask and thou shalt receive, it seems, so the relatively high trading charge (£12.50, no discounts) seems worth every penny if you’re not a fidget.

Thanks for preparing these tables – last year it helped me realise that BestInvest was costing me several thousand pounds more than Interactive Investor over five years. Despite the extortionate exit costs for my 20+ holdings, it will (should) still pay off in the long run.

@premierfella
Thanks. I thought it was too good to be true.

So, for investors who want to go with index funds, Equiniti is only really any use for ETF-only portfolios, unless you just want to sit on an existing fund portfolio and never add to it.

Agreed, Equiniti is competitive.

I can’t say I much like their exit charges though, and having just extracted one of my ISA holdings at YouInvest based on their exit fee policy when they change their charges I pay closer attention to those fees now (as there is always a risk the platform will pull the rug from under you charge-wise and then adopt the YouInvest position and charge those exit fees). Just something to consider in the mix.

does anyone know if the iweb sipp is accessible via the iweb website, i.e. can you see an iweb sipp when you log into your iweb account?

or do they give you a separate aj bell account and you have to log into that?

in other words, does the iweb sipp have a separate web portal to their isa and trading one?

(anyone know the answer to the same question but concerning halifax?)

@The Rhino
All iWeb accounts are accessible via their online portal, including Sipps.

@The Rhino
FYI, Lloyds also use AJBell.

I think it would be useful to add this information to the table, for those seeking to spread risk.

@K – haha, and Lloyds own halifax and therefore iweb too – what an incestuous financial world we live in?

My other observation based on JBs comment, is that it is amazing the *massive* premium you can pay for owning funds rather than shares/ITs/ETFs at all the % fee platforms.

Its sort of outrageous really, its hard to see how its in any way justifiable, its just an historical anomaly, i.e. look how we used to make these huge sums secretly from your investments via trail commission – but at least its there in plain sight now for you to decide whether you want to stump up or not

A little intrigued by the comments/feedback about A J Bell (as the platform provider) vis risk exposure ….

My understanding is that if the market facing providers have outsourced the back office function then the customer/investor’s contractual relationship for regulatory purposes is still with the market provider (i.e. Halifax/Lloyds, iweb, etc.) and not the back office outsourced platform service provider (i.e A J Bell).

Meaning if AJ Bell went under sure there will most likely be service distruption and it MAY take a little time for an invetor to get access to their investments but the market provider would have to find a replacement platform provider pretty sharpish.

@ivan – yes fair point, but its still interesting to compute the effective cap on funds vs ETFs for the various brokers

HL ISA for instance,

ISA ETF cap – £45 pa
ISA Fund cap – £3500 pa

granted you have to have an impossible sum in the ISA to hit that cap..

I don’t think the brokers could have logically/rationally/pragmatically come up with this method of pricing their wares without the historical influence of the shady commision practices of yesteryear. It smacks of desperately trying to retain previous profitability levels completely irrespective of the *actual* costs involved in the services they are providing, i.e. what admin they are actually having to undertake on their clients behalf.

But really, this is all known, and not news to anyone..

PS I do think ad valorem charges have their place to help out the early small pot investors, I just think the caps are ludicrously high. If the % brokers got the caps right then they’d shut down the fixed fee brokers overnight..

@Ivan – hey woah there – I’ve got a SIPP with HL, what are you saying about me?

haha – i’ve hit the tipping point and have to get out pronto – hence my flurry of posts

i remember the good old days when HL gave me everything for free

well i think that TI has alluded to the fact that he doesn’t necessarily pinch on the old platforms too much, i vaguely remember a comment about how only a few were profitable or something like that and he didn’t fancy putting anything into one that was operating at a loss?

there probably is an argument for size/stability/profitability for long-term piece of mind, and if its only costing you a few additional k on a portfolio of a couple of mill or so then maybe its rational?

but me, i’m an inveterate pincher so off I go – maybe I will live to rue the day?

R. E. HL, for ETF or IT only portfolios they are basically no different on cost to all the other platforms. I also have to say having used 6 of the above platforms HL are the only ones where I have had no hassle (and if there is a problem it’s been sorted promptly). When we are talking about life savings, having your money with a broker you can trust can’t be undervalued – I’m unfortunately suffering this now with one of the other brokers.

For sure, for ITs/ETFs its a no brainer. go with someone like HL

For funds its a tricky one to bottom out, and you only know with the benefit of hindsight whether you did the right thing. As you say, something goes wrong and you feel a fool for penny pinching over such a big-deal, but if it doesn’t, you feel a mug for prob paying out maybe 6 figures over the odds over your investment lifetime.

I’ve used HL for 8 years and they’ve never put a foot wrong. I’ve used iweb since RDR and they’ve never put a foot wrong.
I also use bestinvest, selftrade/equiniti and youinvest for various other things and they’ve all been absolutely fine.
I used II once just for a ‘practice’ portfolio, i.e. no money, and they screwed everything up instantaneously.
Others here say they’ve never had a problem with II..
Its hard to know whats obviously best…

Hi all great website.

It has lead me to look at switching my mainly tracker based SIPP into iShares ETF’s. Currently on the Fidelity platform with around £50k and saving regularly. At 0.35% fund charge this amounts to around £175 per annum, compared to the capped annual £45 on ETF/IT charge.

I’m all set to pull the trigger but then read on here that the ETF’s are domiciled in Ireland so are outside of the FCA compensation scheme. A little worrying given the time horizon of the investments (prob another 12-20 years). My thought was to switch to someone like II and hold funds but the charges (including switching charges) look a fair wack – obviously a lot less than if I were to lose the pension pot however.

ETF’s are relatively new and the concentration I would have with one provider is also a worry.

Question. Am I just being irrational or should I just pull the trigger and get on with it?

@BGV – how many ETFs are you planning to use?

@BGV – only beef i have with the etf approach is its not very ‘fire and forget’

would i be right in thinking monthly contributions, each month calculating what the rebalance should be, each month incurring 4 x trading charges?

also having to check for dividends and deal with them appropriately maybe every quarter?

contrast that to 1 LS fund in acc. units, set it up and check back in in 40 years time..

@The Rhino

Yes reinvestment and rebalancing would be needed. I prefer the balance though compared to the LS funds – I read Lars book and liked his more global approach.

As for the regular investment fees, these are only 0.1% on Fidelity so very cheap.

I guess I just need to bite the bullet for now. Once the pot is larger I guess I have the option to switch to a fixed fee platform for funds.

@ Rhino & BGV
You may already realise this, but using a DIY mix of ETFs instead of Vanguard LS fund saves you not only in terms of platform fee, but also gets you a lower OCF. LS has an OCF of 25 bp; a DIY mix averages about 15bp, depending what mix you go for.

I wouldn’t worry about rebalancing too often. There’s nothing magic about the precise mix of assets in the LS funds. If you spend a few months with, say, 40% in US equities, instead of 42%, that could just as easily be a better mix. I’d try and stay roughly in proportion to the size of each market, but I wouldn’t worry about small variances.

theres also the other angle, what if you are paying into your SIPP via salary sacrifice, i.e. your employer is paying it via a direct debit?
You going to go to them with the result of your spreadsheet and tell them how they need to modify what to buy every month?
Unlikely, I would say..

What about you come up with a 4 ETF portfolio in the BGV style, work out whatever asset allocation floats your boat, then:

1. pay into SIPP via salary sacrifice monthly in cash
2. let cash build up
3. once a year (say start of new tax year) you make 4 transactions with the accumulated cash to hit your desired asset allocations via the 4 ETFs
4. lather rinse repeat

that sounds quite lazy to me, and therefore a possibility, im quite tempted as i could stick with HL

is there a flaw?

@The Rhino

The only downside I would see is that you would be out of the market for large chunks of time in cash.

This is why the Fidelity proposition looks attractive. 0.1% dealing charge is cheaper than HL and you can specify percentage split on monthly deposits, so quite easy to balance a portfolio mix.

I think the £45 Sipp cap is the same as HL?

Getting over the compensation worry this certainly seemed cheap option, notwithstanding that they tend to have only the more common ETFs on the platform. These would cover most people’s needs I should think though.

with the % split on incoming capital would you keep that fixed each month and then try and correct any deviation in asset allocation say once a year with some additional trades?

@ Rhino

Yes that would be the plan to set up the allocations and just do a once a year rebalance. Say you switched the entire portfolio circa £50k it would only work out at £50 at the current 0.1% charge. Add in the £45 capped holding fee and it’s still way cheaper than 0.35% on the same amount.

@The Rhino

I guess it depends on objectives and what you believe. The Lars theory is an All World Index Tracker and a minimal risk asset i.e. Gilts.

I started an ISA (funds) along these lines use the HSBC All World Tracker Fund and a basic Gilt Tracker. This is probably the simplest.

There seem to be more Developed World Trackers than All World so adding an Emerging Markets element maybe takes it to 3.

Inflation linked bonds seem to be a little out of favour from recent posts on here but there seems to be an argument for adding a small Corporate bond element. So 2 or 3 for ultra simple or 3-4 with the Corporate bond element.

Of course there are plenty on here who know more than me and may think that adding in other elements help add additional diversity (property, smaller companies, gold etc).

This is a really useful table – and more complete than the “compare fund platforms” site.
I’m looking to move into a fixed-fees platform, away from Cavendish, given the size of the portfolio. On paper, it looked pretty clear that e.g. iWeb would be cheaper.

But I’ve run into real difficulties with the range of funds available. When I checked, neither iWeb/Halifax/Lloyds nor Interactive investor/MotleyFool seem to have two funds I use quite a lot. One is the Vanguard UK government bond index, the other is the Vanguard global bond index GBP hedged.

Interestingly, they do offer Vanguard “long duration” UK government bond index… but I’m really not keen to switch into that. The other passive UK gilts option was Blackrock UK gilts all stocks tracker, which gets a good review on Morningstar but with the caveat that it lends out securities up to 50% of NAV.

And for global bonds, I couldn’t find a GBP hedged tracker.

I’m really surprised. Aren’t these fairly banal fund choices? But perhaps I’m missing something.

@haphazard – have you actually asked iWeb etc if they provide the funds you want? I remember iWeb had a really poor list of funds but actually provided a lot more. Sometimes it’s hard to search if you don’t actually have an account.

Thanks everyone for the comments!
It does look like ii have it, I didn’t find it when I looked. Perhaps I should go with them… though there has been quite a lot of negative comment before on their customer service. Have those of you with them found them ok?
Failing that I will give iweb a ring, as soon as I can find time during a working day!

well, since you ask…I have used both, but left II due to numerous problems with customer service. I haven’t had any problems with iWeb, although their website is undoubtedly less attractive. They have a live webchat which works quite well. I think I’ve phoned them as well. On the whole though, I don’t do very much with the account so not much to go wrong!

Could someone more intelligent offer their two cents for my situation? I have over 50k split between Cavendish and Fidelity using only ISA allocation amounts. I use 5 Vanguard funds and try to purchase whatever is cheapest/balance things out every quarter, admittedly this doesn’t always happen as I’m an idiot. Given the size of my pot and infrequent trading, I think I should switch to iWeb, would anyone care to agree or disagree based on the above? I should mention I’m 29 and this is basically retirement funds, I don’t intend on using it for decades, same target with new funds to use up my ISA allowance each year.

Well, I phoned iWeb in the end (local number, through to human being) and they did tell me that they had the two funds I was looking for – though I still couldn’t find them on their website. Maybe it is just that the full search options are not available until you have actually signed up.
At any rate, I am now ploughing through the terms and conditions. I did wonder a bit about the idea that investments might be registered, not in a nominee account, but “in the name of a sub-custodian located outside the UK” – this seems to apply only to investments “subject to the law or market practice of a jurisdiction outside the UK”. I take it that includes funds domiciled e.g. in Ireland. Not sure how concerned I should be about that. For all I know, my current platform does the same thing!
As a beginner DIY investor, understanding the small print platforms produce is quite a challenge.
@ Nick we may be doing similar platform switches around the same time! They told me it would take 3-4 weeks.

@HH – I checked for those funds from ‘within’ iweb (i.e. logged in) and couldn’t find them either so it must be some issue with the website. Sounds like its always worth phoning with iweb..

@HH

They def do not show, logged in or not. I have searched on name, ticker SEDOL etc.

I have found iWeb often do not have some investments I am in interested in, even though listed on the AJ Bell (YouInvest) site. They sometimes have a reason e.g. the investment did not meet iWeb standards (whatever that means). When I joined, they did say that if funds are missing and there is a demand, they would add them

Anyhow, I would double-confirm with iWeb that they do the funds, and ask why they do not show.

I’m looking to set up a SIPP for my limited company, probably ETF only, and transfer in my existing pension. Currently, the shortlist is:
iWeb (already have an ISA account with them), AJ Bell or X-O Sharedealing. Any thoughts on customer service/range of ETFs available for these three?

This might be old news, but perhaps worth sharing since fund choice will be an important platform selection criterion…

I was recently trying to look at some of the Vanguard funds mentioned in the passive portfolios on here. I use Halifax and they don’t come up in a search (e.g. Vanguard Lifestrategy or their Global Small Cap tracker). But it seems they are available, just not searchable.

I received this reply from Halifax:

“This is to confirm that we do trade ‘Vanguard Global Small Cap Index Fund Class Accumulation’ (sedol: B3X1NT0) as well as ‘Vanguard LifeStrategy’ funds. The list of funds on our website is not an exhaustive list.
If you have any funds that you wish to invest in but cannot find on our website, please do email us with their ISINs or sedols so we can check their trading’ status.
I hope I have been able to help you with your query, however should you require any further information please do not hesitate to e-mail me at any time or alternatively call us on 03457 22 55 25.”

Ah, actually found them now:
https://register.fca.org.uk/ShPo_FirmDetailsPage?id=001b000000MfHYVAA3

Interestingly, they are authorised separately from Halifax and the main banking group:
https://register.fca.org.uk/ShPo_FirmDetailsPage?id=001b000000MfGrKAAV

I stand to be corrected but as far as I understand, charges at AJ Bell You invest were revised late last year and they now only levy a 0,25% custody charge without any further account charges on portfolios up to 250K. The table appears to show an initial 0.25% charge with an additional 0.25% charge on Sipps for example. Am I missing something?

… its not indicating 0.25%+0.25%, it is indicating each 0.25% applies to the two subsets of investments only (funds and “non-funds” investments).

Good spot, Gav. Thank you!

I had to fill in the same form before I could trade exactly the same “Complex Instrument”, despite the fact I’d already held it for years. However, this is not unusual, some platforms have restrictions on certain types of securities or funds. For instance, I believe HSBC InvestDirect does not allow you to purchase any kind of Exchange Traded Commodity, even “physically backed” versions. In a way, they have a point. Even physical ETCs are in fact “derivatives”. Whilst your investment is linked to the price of a pot of gold, you don’t actually own the gold itself. You are relying on a number of counterparties to back the investment. Still, it would have been nice of AJ Bell to have warned me in advance, seeing as they knew I held the fund. I missed the fact they’d sent me a secure message to say I was now able to buy/sell the fund, by which point my asset allocations had shifted and I decided to buy a different fund instead to rebalance my portfolio.

anyone successfully making regular investments with an iweb sipp? I know you can set up monthly contributions via a direct debit, but I’m struggling to see a mechanism in their literature whereby you can make regular monthly investments with those contributions. Would be a pain if you had to go in and manually purchase each month.

Likewise, would be interested in the answer to the same question for halifax

With regard to the lack of a regular investment option with iWeb, that does sound inconvenient – especially if its a feature that they previously had and have now taken away.

Personally, that wouldn’t bother me though. I currently use ETFs exclusively and have also recently decreased my annual contributions. So investing every month would incur excessive trading charges. Instead, I have an automated monthly cash contribution but I don’t actually buy a share until I have enough to justify a large enough order. At which point I can also spend any accumulated dividends and only buy the allocation that has dropped below target. It means on average I’m able to restrict myself to about one trade a month, including both buys and sells. Obviously with iWeb’s £5 trading charge there is less to worry about, but it depends how many funds you hold how often you need to rebalance or trade for other reasons. Also, my method is more “hands on” and increases the temptation to “time” the market, so requires more discipline.

@JB you’ve got me thinking now that I could take the ‘manual purchase’ hit if I decreased frequency to quarterly purchases

this has the additional benefit of being able to time the purchase to just after the quarterly fees have gone out, so you could buy just the right amount of units, and you’ll never not have enough in the account to cover the fees

I can live with doing it manually 4 times a year, but not 12 times a year

JB I think you may have swung the pendulum back towards the iweb SIPP with your insights – it had most definitely swung away as of this mornings protracted discussions..

With regard to Fidelity fees, is there also a 0.1% dealing charge on buying/selling investment trusts and ETFs? Also, can you hold compnany shares directly? It doesn’t seem clear on the charges sheet….

Thanks Guys, yes, I asked Fidelity and they pointed that out, you beat me to the post. Once I have reinvested the transfer sum the £45pa will soon reimburse me for the 0.1% dealing costs v HL’s £200pa fee. HL were intransigent on what I felt was a reasonable request, but then their loss is my gain.

@Rhino

IWeb automation

I am pretty sure you can’t automate stock purchases in IWeb and Halifax from cash in your account but you can automate what happens with dividends to be paid out, reinvested to sent to a particular bucket. Reinvestment is 2% of amount invested or £5 whichever is lower

That tool is a bit out of date, as SVS is now XO.

@Rhino

Different front-end, same options unfortunately

sent off the iWeb SIPP application today so will be saying goodbye to HL
can someone please now tell me why its a bad idea, as Sod’s law dictates this can only come to light *after* you have committed to it

@Neverland, @The Rhino – I can’t comment on IWeb, but in a Halifax SIPP you can set up automated stock purchases from the cash account. A pension provider that didn’t offer a ‘fire and forget’ service would be too much hassle for me.

Yes, the II SIPP is £96/yr + £20 a quarter for the platform (which can used towards trades, inc. those for your ISA* or partner’s ISA). The mechanism to feed the SIPP is a bit clumsy and slow; I find one off contributions easier than the regular deposit process. *You can’t use it for Junior ISAs though, which is annoying.

Is TD Direct the cheapest for ISA portfolio of ETFs & ITs ?

I have been looking to move my ISAs from previous years out of Hargreaves to make some savings on the fees. Came across TD Direct, although it’s not discussed much here on this forum.

It seems TD Direct have an annual ISA account fees of £36 – but these are waived if you have more than £5k. So for all practical purposes, these fees are zero.

And if you have mutual funds, then there are platform fees of 0.30%. But if you only invest in ETFs and Investment Trusts, then there are no ‘platform fees’ .

So in effect, apart from trading charges to buy those ETFs / ITs, there are no additional charges ? Event those can be minimised to £1.50 a pop if you choose regular investing. If you limit regular investing to 2 ETFs every quarter, then over the course of the year, you could limit your fees to just £12 ?

Seems too good to be true ? Am I missing something ?

@Abhi
your correct in what you say about TD this is basically what I do except I invest lump sums at the beginning of the tax year to make the money work for me.This covers the extra £12.50 dealing charges(hopefully). ii haven’t taken over TD yet to my knowledge, but it’s coming and I worry about the charges when they do. It may be a case of iWeb here I come.

Two quick questions about iii that I can’t seem to find an answer to:

-Regular investing fee – Does the £1.50 regular dealing option apply to funds as the table suggests? – iii’s “Portfolio Builder” page says “Invest in shares, ETFs and Investment Trusts”; no mention of funds – http://www.iii.co.uk/shares/portfolio-builder

-Non-ISA funds – Just trying to understand whether iii has the funds I want. Vanguard’s relatively new global all cap tracker is listed on iii’s website, but the “UK ISA” field says “no”. Any reason why iii would offer funds only outside an ISA wrapper that are ISA-eligible on other platforms?

Thanks!

Cavendish Online have just cut their SIPP fee as well as general charges for portfolios over £200,000.
SIPP is now 0.25%, down from 0.3% (https://www.cavendishonline.co.uk/pensions/).
SIPPs, ISAs or Investment accounts with over £200,000 of holdings now cost 0.2%.

Thanks for this useful table. I’m new to investing. Can you please briefly describe the following terms?

Dealing: Funds
Dealing: ETFs, ITs, & shares
Regular investing

Thanks

@CT

The fund / product provider fee, in this case Vanguard, is deducted via an accrual in the share / unit price on a daily basis. You aren’t coughing up for it on a particular basis, it just acts as a drag on performance of the product (to get into detail, some products charge fees to income, others to capital, based on the investment objective – ie. if aim is provide capital growth, fees will be taken from income).

You have always paid it, regardless of how your chosen platform provider chooses to bill you for their service (be it fixed cost, as you experienced previously with Selftrade, or in the new world of your 25bps fee).

Whether you should move or not, purely on a cost basis, will depend on the size of the assets in your SIPP. There will be a point where a fixed cost broker (see table above) will make more economical sense than a percentage-fee broker.

… and one option is an ishares core ftse100 etf with charges of 0.07% and yield of 3.65%.

Check that the broker you intend to move to holds the investments that you want. Fidelity allows 79 ETFs and 92 ITs. Full list is here;

https://www.fidelity.co.uk/investor/funds/fund-supermarket.page#LEGAL_STRUCTURE_CAT%7CETF

I saw this related to iWeb security measures:

http://www.iweb-sharedealing.co.uk/about-iweb/security.asp
“You can be assured that we review our security arrangements on a regular basis. Whilst we have incorporated many security features, and bearing in mind the majority of fraudulent cases are due to carelessness with passwords for example, we have no control and accept no liability over the computer or enviroment you choose to use to access the Internet i.e. at work, internet café etc.”

I don’t know if it sounds right for them to accept no responsibility. Your PC is easily hacked these days regardless of the virus protections that you use. There are various things that brokers can use to avoid a hack (like using part of a password to authenticate like HL and CSD) or multi-factor authentication. If the broker doesn’t care about implementing a proper auth mechanism, then they can’t blame the user. It’s wrong to say that the broker does not have control over the way user logs in. In fact, they dictate how the user should login.

Secondly, they can for example, avoid storing both the nominated bank account details and the debit card details corresponding to the same account with them. This way a hacker cannot withdraw funds to the nominated account and then use the debit card to flush out your bank.

So, how does iWeb do the authentication anyway? Does it request a password or part of a password? Does it use a multi factor mechanism? Does it store your debit card details?

@PA
With Youinvest I’ve got my regular investments set up, and as long as there’s cash in the account they go ahead. I don’t have a direct debit or standing order set up, I just pay in with my debit card when I can.
You seem to be implying that if I paid money in, I could only use the regular investment option in that month on the platforms you’re talking about. Am I understanding that correctly?

I use TDDI for their regular monthly investing service, I don’t use it every month.
It requires a DD setup initially but you can then set that DD to zero and just use cash on account that you’ve transferred and/or accrued from dividend payments.

Regarding fund ISA/SIPP eligibility by platform, my understanding is that eligibility is determined by the fund but the platform can choose which funds are available on each of their products. e.g some commodity funds are ISA and SIPP eligible, but some platforms disallow them completely, whilst some require further suitability checks. However, to the point of your question, I would check first with the fund provider to see if it’s eligible. If it’s also available on your platform, then I can’t see why it wouldn’t still be eligible. The fund or platform info might just be out of date. It can take a while for new funds to become fully eligible.

@PA – I use iii regular investment option. It is true that for it to work you have to set-up a regular payment but its not a pain to do its just an option on the portal and you can modify the date and amount at any time, although it funds the account from a debit card not a DD so maybe they changed the rules for new accounts? I regularly change mine if I have a few extra bob I want to chuck in can be stopped and started again with a few minutes on the website.

Also you can set either a fixed amount or a percentage of whatever is in your cash balance to invest. I modify which funds/ trusts / ETF’s nearly every month. If you use the ‘percentage’ settings it invests according to that for any value of cash in the account. So for example when I got my nice dividend payments in Jan when my regular investment went through in Feb it invested the dividend income plus monthly DD amount into the investments according to my set ratio. Finally you dont have to invest the entire amount of your DD or cash if you dont want.

Hey I’m not iii biggest fan; they have their short comings especially around some of the customer service (though i think its got better) – however I certainly find the regular investment easy and cost effective. As the quarterly charge of £20 is used as trading credit, at £1.50 per regular investment transaction I buy into 4 x different investments a month, meaning my transaction charges are almost exclusively offset.

Overall chosing a platform is tricky – so many things to consider. Hope the information above proves useful to someone though!

For II, you do not need a direct debit in place to use the regular investments. Any cleared cash in either a trading account, ISA, or SIPP on the 23rd of the month will be invested for that respective account based on your fixed amount or percentage choices.

The cash could be from a direct debit, tax refund, dividends, one off contribution or transfer for example.

@John – Many thanks for pointing out how to bend the TDDI regular investing service into reinvesting cash already on account. That totally passed me by and I don’t think I’d ever have worked it out for myself.

Sorry, forgot to add the URL

https://www.lloydsbank.com/investments/investment-isa.asp#collapse2-1449907223154

@Linda, do you want their “share dealing isa” instead?
https://www.lloydsbank.com/share-dealing/share-dealing-isa.asp

@Wolfster
Re – iWeb authentication They start with a username & password then they ask you a security question fom a choice of 4 different facts
about yourself.

Is this a super deal from Virgin or have they just forgotten to mention the individual charges on each fund?

#http://uk.virginmoney.com/virgin/isa/popups/ongoing-charges-figure.jsp

I am looking for a platform for both SIPP and ISA investment in funds. I would like to use the same platform for both is possible.

I have over £ 100,000 to invest in SIPP funds and over £ 50000 into ISA or ‘ open market ‘ based funds.

Can anyone tell me which platform may best suit me?

This is probably a v naive question… but with most fund managers you can open an account with them directly. Usually they’ll obviously want you to put a large sum in to do so, and I’m sceptical that even then the charges would work out lower than going through one of the more competitive platforms… Not least because there are doubtless different arrangements for “retail” transactions and “institutional” ones. But I wonder if Mr Monevator has anything to say about this?

Thanks @CisforV @Linda

Just one point that newbies may not notice. If you regular invest small amounts into a large number of shares, then that will be looking for trouble, because the reduced fee won’t apply when you want to sell them all. Take an extreme case, like if you regular-invest say, 100 pounds in 100 lines @1.50 dealing price, totalling 150 pounds in dealing fees, then the total cost of selling the 100 lines @10 pounds/line will be 1000 pounds on a total capital value of 10000 which will be a huge 10%.

In other words, you can ‘regular-buy’, not ‘regular-sell’.

@Wolfster not true. You can certainly invest in some ITs via TDDI a regular investment plan e.g. Aberforth Smaller Companies Trust. I suggest you contact them to confirm availability if there are specific trusts of interest to you.

@DanE
For funds under £25000 Charles Stanley Direct are worth a look & their customer service is excellent.

@Nick
Haha… apologies if you’re a regular to this site… it’s just that by that comment you don’t appear to be. This whole site is dedicated to the concept of *passive* investing and *always invest never speculate*. There are pages and pages on this site where Mr Monevator (or Mr Accumulator?) explains his thinking.

When you consider that Warren Buffett himself has said that 90% of his estate should go into, basically, index trackers, this might give you pause for thought (though as Mr Monevator himself says here http://monevator.com/warren-buffetts-most-personal-bet-yet-on-index-fund-investing/, this could be interpreted as the ultimate in self-praise, i.e. “after me there will be no active fund managers worthy of the name”, a bit like Mohammed, who said “after me there will be no more revealed religion”).

My own two cents/Euros/threepenny bits: bung all £15.2 k into one of the several UK-available funds which tracks the US S&P 500. The Trump effect is irrelevant over the long-term; the long-term decline of the £ against USD perhaps less so, particularly with the Brexit nonsense. You probably don’t have time to open an account with a new platform right now, but that’s another thing that’s well worth reading about here (i.e. for next tax year): http://monevator.com/compare-uk-cheapest-online-brokers/

@charlie, Thanks. I have settled into my existing CSD account for now. I might contact TDDI later, but I wish they would just put the list on their website (like HL do). Anyway, the info was from here: https://www.tddirectinvesting.co.uk/rates-and-charges . They say it’s for ETFs and FTSE350, but they don’t explicitly mention ITs.
—
£1.50 To buy FTSE 350 or ETFs by monthly
Regular Investment facility
Minimum monthly regular investment of £25 per stock. Buy trades are
normally made on the third Wednesday of each month. Sales are charged
commission at the normal rate.
—

@Linda, ditto on CSD customer support.

@John, yes, I get that, it’s good for investing into a small number of lines. Maybe less than 5 as a newbie. I should have said ‘large number of lines’ (instead of ‘shares’) in my comment. But if you use it as a tool to diversify into several individual lines, with a small amount in each line, that would be a bad idea.

Secondary question,

why ETFs over funds? Simply because it’s executed right away? I know funds have been in the game longer but pretty much everywhere except Monevator seems to recommend ETFs over funds?

Thank you,
Nick

@Nick
They seem fairly similar. Slightly different make up, slightly different returns and slightly different fees.
See http://www.hl.co.uk/funds/fund-discounts,-prices–and–factsheets/search-results/v/vanguard-ftse-uk-all-share-index-accumulation and http://www.hl.co.uk/funds/fund-discounts,-prices–and–factsheets/search-results/v/vanguard-ftse-uk-equity-income-index-accumulation
Cheers
Richard

@Nick
The Vanguard funds track different indices. The clues are in the names. If you follow HL links and then go to the KIID links you’ll get a simplified explanation of the different indices. They are not just ‘slightly different’. The All Share Index tracks about 580 stocks; the Equity Income Index tracks a subset of about 120 higher yielding stocks but beware the quality of some of those stocks – and the higher fund charge.

@Nick you said “paying a premium for US is putting me off”. Can you tell me what you mean by “a premium”? Sincerely, I’d like to know if you know something about US index trackers which I don’t.

My suggestion was to buy something like this http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000OOB0 … (NB Mr Monevator here http://monevator.com/low-cost-index-trackers/ doesn’t appear to recommend a US Index tracker particularly: no doubt something on this page would be likely to be a good buy too…)

Two cheap platforms – Moneyfarm and Nutmeg- have never been mentioned on the Monevator site. Would anybody recommend them? I would appreciate some feed back.

@Nick Oh I see. Before “seeing the light” re trackers, courtesy of Mr Monevator, I did in fact put 90% of my investments into US active funds, specifically well before June 23 (just in case ALL the pollsters were wrong). Including Berkshire Hathaway B, at £100 a share. So, OK, I can afford to be a bit smug and I see your point. There’s nothing to convince one that timing must be disregarded better than having been very lucky with timing. In fact Berkshire Hathaway B has now gone down from a peak of $175 to $166, and the S&P 500 is down from a peak a month ago, so maybe this “premium” perception should just be, er, ignored? If not what about a world-based tracker perhaps? Mr Monevator recommends them. I take it you know tomorrow is your last day…

@Nick – I think you may be over-complicating things. The higher costs of LifeStrategy compared to a DIY arrangements will have little or nothing to do with currency exchange costs. You will be exposed to currency risk and exchange costs as soon as you own any part of any company that is in any way exposed to overseas factors. This will include virtually every company in the FTSE100. The only way to avoid foreign currency exposure is to own UK cash or government bonds – at which point you could argue you are overexposed to the UK pound. We can’t get away from the fact that the pound has dropped recently, so most other countries will cost more to buy. However, if you had a globally diversified portfolio then your assets should have actually benefited from the rise of the dollar and other currencies relative to the pound. I personally try to ignore any currency movements and don’t even bother with hedged versions of funds. No one can predict currency movements over even short timescales. Just stick to the cheapest and most diversified funds and don’t worry about what currency they are held in. Most global funds are denominated in dollars, but the underlying assets will consist of every currency under the sun.

This needs to include IG and Saxo.

@Todd Just a point about ETFs: ETFs can be trackers… but you probably knew that. As ever, Mr Monevator/Accumulator “has a page for this:” http://monevator.com/etfs-vs-index-funds-differences/ At the end there he says he recommends funds for drip feeding, and generally. She/he’s also got a page of specific recommendations for low-charge tracker funds: http://monevator.com/low-cost-index-trackers/… 11 of these are World trackers. Cavendish is a good choice for the sort of sums you’re talking about. Personally, with somewhat bigger sums involved, I’m moving away from Cav to a fixed-charge setup… and having moved from Hargreaves Lansdown to Cav I have to say the latter’s online platform is not impressive: it takes days for money to appear when you pay in for example. But as the someone on the phone said when I asked why Cav doesn’t change to a better platform, “you get what you pay for”. Refreshingly frank. Still, it does the job.

iWeb have just refused to accept 2 of my funds because they are “Institutional”
Can anyone explain why this is? Also, is there a different version of each institutional fund
that would be acceptable?

@Todd I’m sure Mike will reply in time but here are my thoughts. Your going with funds because it’s cheaper than using ETFs for small regular contributions. If you want a single fund then you need to consider the allocation of the funds you’re considering. Vangard LS 100% has a home bias meaning that 25% is held in the UK (to mitigate the effects of adverse exchange rate movements). World trackers will hold 6-7% in the UK. VLS 100 also holds a small allocation to emerging markets, as does the HSBC world tracker listed on the low cost tracker page. So, ask yourself do you want home bias and/or emerging markets? If you don’t mind or don’t know then it’s hard to go wrong with VLS 100. IF you want to have control over the allocation to UK, developed world ex-UK, and emerging market then you’d need 3 separate funds.

@Todd. On that page (http://monevator.com/low-cost-index-trackers/), the 11 funds starting with the ones under the heading “World Equity”… all of these are “world” trackers of one category or another. I don’t know why you are particularly attracted to VG LifeStrategy (http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000MLUQ)… it’s got a 5-star rating from them and the rate seems low (0.22%) and may be a perfectly good choice. Personally I tend to rate the judgement of Mr/Ms Monevator (“Accumulator”/”Investor”) pretty highly… although obviously you never know whether people are receiving money to plug a particular fund of course (I’m not aware whether Mr Monevator has anything to say on that subject about his own site…).

@Dan thanks. Well at the moment I have a help to buy ISA towards a house which I’m not sure is really worth it. Now I’m ready to open another ISA – S and S wondering whether an SIPP is also worth it. If you are in my shoes what would you do with 10k and want to invest – just an S and S ISA or also a SIPP?

@Todd it’s difficult to suggest without knowing your circumstances. If you’re not sure then at least an ISA doesn’t tie up your money until retirement (I’m guessing that your < 55). H2B suggests you may be saving for a deposit, in which case you may want access short term, particularly if there is a welcome correction in house prices.

@Dan, my circumstances are as follows: for the last 3 years I’ve worked through agencies without a pension and for the last 18 months I’ve worked overseas, again without a pension. I’m 27 and do want a house in the next 5 years hence my help to buy isa. However, since accruing around 20k in savings I want to put a side 10k into investments and also for my pension since I don’t have one. Maybe I will have one in the not too distant future when I secure something permanent. Therefore I’m wondering whether having an SIPP and S&S ISA would be a wise move. Doing my homework I’ve worked out funds are better than ETF since my investments are small and an online platform such as Cavendish or CSD are low cost. I am now not sure what fund to go with. Do you have an personal recommendations other than VLS. I’m pretty happy taking a risk and going with VLS100, but not sure if there is a more suitable fund or better fund.

@ Mike – that’s really great advice. I think that’s a good perspective. Ok, so tell me, what fund would you recommend? I can only think of the VLS100 or the 80/20.

Just a quick one about tax on pensions, the 20% is better than it seems.

You pay income tax on everything you put into an ISA but it isn’t taxed on the way out. Of course, Lifetime ISA is effectively tax free on the first £4,000 per year as it gives you 25% back. The same as if you’ve hadn’t paid out 20% tax in the first place. But you have to put that towards property or pension to keep the bonus.

Anyway, a pension lets you withdraw 25% tax-free. That’s a great deal. You are then taxed on your annual income as per any other taxpayer, meaning: you pay 0% on the first £11,500 i.e. your personal allowance. So it’s not true to say that the 20% tax break is reclaimed later. Some of it is, sure, but you make a massive gain on the rest. If you’re a 40% taxpayer then there’s every chance you’re a 20% taxpayer by the time you retire. Again, the tax break isn’t clawed back. If you get an employer match and don’t contribute to a pension then you’re giving up free money.

Todd, I realise that these circumstances may not apply to you right now, or aren’t a priority, but I’m putting it out there because pensions are very easily overlooked or dismissed. I did it myself for too long!

@Todd Also, a final point about trackers: this may be obvious to you, but to many it seems that it really does need to be explained: a tracker’s value does not merely reflect the numerical value of an index… for the simple reason that all the companies in which you are investing are constantly distributing *dividends*, which end up in your pocket, or are more often reinvested into more stock. So if, for example, you put £1000 into an S&P 500 tracker and the next day the index plummets by half, the thing to do is to carry on investing as per your considered plan. The Monevator approach is absolutely right: slow and steady. The index will eventually get back to where it was, but that’s only one factor: your tracker will get back from £500 to £1000 well before that… because the companies in it are constantly generating dividends.

@Todd… yes, great. There’s one final hurdle to overcome in this investment mullarkey: identifying your fund. Cavendish does not put the ISIN number on the page with its funds (I sent an email to them about this a couple of weeks ago asking them to do so and they wrote back to say “we’ll try”, but also that if you go to their research page [https://www.cavendishonline.co.uk/investments/fund-research/] you can download a PDF by clicking on the word “funds” in that first paragraph. This list of the funds they offer *does* give the ISIN. Unfortunately this particular fund isn’t there… There are four funds which begin with “Fidelity Index World Fund”… This is often the way with these “recommendation” things, and a fund which sounds virtually the same but isn’t might not be what you want, might have a worse charge structure, etc. Complete minefield, and totally unhelpful and unnecessary. Using the ISINs of these funds you can look up the details on morningstar.co.uk and find out the charge structure. e.g. for “Fidelity Index World Fund P-Acc”, ISIN GB00BJS8SJ34: http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000SRPN, annual charge 0.13%, which is even lower. But Mr Monevator would have to confirm that this fund is “just as good” as the one he listed. I never know what “P fund” and “W fund” mean. Again, Mr Monevator might…

I’m hoping someone could help me clarify my thoughts on which broker to pick.

Let’s say I have 100k with CavendishOnline in an ISA made up of 8 index tracker funds with monthly savings plan for each one that I rebalance once a year.

I think this is not the best place to have it as it’s percentage based fee and will cost me more than flat fee broker. What would the best one to transfer across to? I believe I-I or Motley Fool looking at the table but if someone with experience could give their input, that would be hugely appreciated. I’m unsure if the £10 dealing fee applies for monthly savings plan. I’ve never transferred across before so I’m not quite sure how it would work with the funds as well. I assume I can’t just transfer to a different broker and keep exactly the same funds as the new broker might not have the same funds on offer. Does it then just transfer the whole lump sum across and I then select and allocate the funds again on the new broker?