Broker comparison: cheap investment platforms UK

@Kraggash Thanks for throwing some light on these mysterious letters: “P” class, “Y” class, “W” class. I spent a few minutes googling on this today, to no avail, which is an indication of something in this day and age (I mean, where information is not exactly in short supply!). Do you have a link which talks about this? As for logging on directly to Fundsupermarket, I was intrigued and did so… so, if I understand you right, we’re talking about a login page where there’s a picture of a peaceful foresty valley… i.e. very similar to the Cav login page? So I managed to log in there… but the page of my holdings etc. seemed exactly the same. Actually it’s of somewhat academic interest as I’m moving to Motley Fool because of the flat-rate charges, so it makes sense to transfer everything from my percentage platforms (HL & Cav) and consolidate everything at MF really… But it might help someone like Todd…

i made a mistake by submitting my mobile number on ig website.i ended up receiving about 50to 60 calls in a span of one year regarding short trading.

I was looking at the Lloyds Bank charges for their sharedealing accounts (trading and ISAs). The table seems to suggest in the fee notes that if both an ISA and trading sharedealing accounts are held , then the £20 per six months charge for the ISA applies, but the separate £20 per six months for the trading account is waived. So in total £20 per 6 months or £40pa is the total cost, regardless of whether an ISA only, trading only or both accounts are held . So should the wording in ‘fee notes’ say ‘only one £40 charge applies if both ISA and trading accounts are held’. Or have I just misunderstood their charges?

https://www.lloydsbank.com/share-dealing.asp

I’m completely confused about their funds offering. If you click on the green ‘Share Dealing ISA’ or ‘Share Dealing Account’ boxes, that has an openable box titled ‘Funds Supermarket’ where it says you can choose from over 3,000 funds through your share dealing account, and says ‘enjoy low initial charges of only 0.5% with most fund managers’ (what is that all about, most clean funds, in particular trackers are usually 0%, so what funds are they actually offering?), and then if you click on ‘find out more’ that takes you to another page that says under the FAQ tab that funds cost £10 to trade (vs £11 for shares). It also says there in relation to the initial charge ‘some are even offered at 0%’ so is that 0.5% comment earlier just a red herring?

Can anyone clarify?

@Snowman I agree with you on the description of the Lloyds Share Dealing platform fee description.
As for the “0.5%” initial charge, put that down to the bank having too many subpages on their website and not keeping them properly up-to-date. I would be astonished if they were charging anything other 0% initial charge on most funds and applying only the standard initial charges on the funds where those are still applied by fund managers. The giveaway is the “We have negotiated initial charges of only 0.5% with most fund managers and some are even offered at 0%.” statement that I see on one of those pages – that smacks of old school as I very much doubt that Lloyds have any “negotiated” initial charges these days.

I am an existing client of Alliance Trust Savings with 2 online execution accounts.One personal £40 k,second UK reg Ltd Co £1.2m.
With a months notice they are going to apply a £375 pa charge per portfolio, on top of the existing £120 platform fee.
This will effectively swallow entire years dividend income on the personal portfolio.
Enquiry TO ATS lead to suggestion “you might like to find a new provider ” and waiver of opt out charge if before June 1. (5 weeks )
Problem.I am ex Pat .Despite UK Bank accounts, 30 years same address.It seems IMPOSSIBLE to find online provider without a UK post code and a recent utility bill..Any suggestions welcome.There must be thousands of us in same situation.

@Gordon – What’s your citizenship(s) and country of residence? Do you have a UK ISA and/or SIPP or is it just a sharedealing account? It makes a big difference if you are US, European or ‘other’. Most platforms will require you to be UK resident, but not all (e.g. iDealing I believe). Never pretend to be resident if you are not. Might have worked in the past, but not these days.

@Gordon – An interesting and relevant article: http://www.telegraph.co.uk/investing/isas/ask-expert-can-still-have-isa-move-abroad

Readers may be interested to know I was contacted by Youinvest this morning after previous feedback that I wanted Two Factor Authentication as an option, to ask if I wanted to test it out!
How close this is to general release I don’t know, but my experience so far has been seamless. I’m pretty pleased with this, I must say.

Out of interest, do any others on the list above offer 2FA?

Are you sure about the share centre? I am non-UK resident and opened an account with them just over a year ago. They asked for a certified copy of my passport in addition to the 2 other forms of identification specified on the application form. They also asked for my tax identification number for the country in which I am resident. Take a look at their application form. It still looks pretty non-UK resident friendly to me. Why not phone them to check, as they suggest?

Ah! Yes. I know that HMRC does this as does Investec. Which is fine until you change your mobile number!

DW

iWeb have a username & password, then ask a security question from a selection chosen when you register. Does this qualify as 2FA?

@Ruby,
Pleased to say you are absolutely correct.I have also spoken to them–no problems,
You can only apply on line if you are UK resident–otherwise there are some forms to download.
Thank you for taking the trouble to put me right.I am very relieved as I thought we were forced to stay put.
Presumably you are satisfied as a customer to forward the link ?
Regards,

@Gordon As a Brit living overseas in Malaysia, I use TD Direct Investing International which is based in Luxembourg and have found it very good. The only thing is that it’s been recently sold to Interactive Investors so don’t know what implications it will have for the cost and service. Nice perk with Luxembourg is that capital gains are not taxed (nor are they in Malaysia).

Hi Gordon, just wondering if you have a Danish preferred broker/platform? I’m in Denmark – actually have account with HL in UK which I brought with me, don’t think they allow you to open them from abroad though, but I’m looking for something similar here now.
Also interested in any similar Monevator-type blogs with DK focus too. I speak/read Danish, just haven’t found anything similar here.
Cheers!

@Helen,
My son and Son in law are both with Nordnet.It is very simple i think you can use your nemID.
I am not too sure of their terms (I advise but try not to pry !) But certainly they do not have much money at stake -but as i say to them if you do not have much it can hurt more ! I love the freedom of execution only dealing (and the price) and i am old enough to remember when all you had was the days closing price and a percentage ( buy and sell) to add to injury.
The Danish stock market does not interest me so much though.I have noticed that if you got 10 investors together their combined portfolios would have 80% of the same shares.London SE has so much more to get your teeth into.
I think there is plenty of blogs, threads,whu, etc though if you are interested. To be honest i am not too interested in most of it,
but that is because I am not dealing 5 shares each time.No doubt there is something to glean from it but i think you are better to use your own common sense,i subscribe to Investors Chronicle and a big fan of Simon Thompson.

@Roy
There is TD Direct investment platform which is the UK branch. I believe you have to be UK resident to use.
However there is also TD Direct International platform which is based in Luxembourg. Expats can use that.

http://int.tddirectinvesting.com/td-difference/empowering-expatriates

I’m thinking about it myself. I have my ii which I opened while resident and I can legally put money into to that (its not SIPP or ISA wrapper). However as my pot has grown I’m thinking it might soon be worthwhile opening an off-shore trading account and put my monthly investments there for a few years. Need to weigh up the pro’s / cons of the TD International.

Yes, I use X-O for my SIPP. Their customer service is pretty responsive and the user interface is perfectly acceptable IMO. Just a point to note, though, which you are probable aware of – they are exclusively a share dealing site, so no funds. I can find ETF alternatives for all the funds I would otherwise buy, but obviously if you just want a Vanguard Lifestrategy fund you’ll need another provider.

I’ve used X-O for a long time for ISA and sharedealing. Very good value for money. I’ve traded LSE shares, ETFs and ORB bonds with no problems. Website is very basic, payments in via debit card, payments out and transfers require you to send an email. SIPP appears to be managed by Gaudi to keep costs down, but I have no direct experience.

@Jamie
I have been looking at X-O as well for an ETF only ISA. I sent them an e-mail this afternoon with a list of ETF’s to make sure that they carried them, received a reply within the hour! If every thing they do is as efficient they might be worth considering, but I’ll wait to see what other posts have to say .
While I’m here, I opened an ISA with iWeb in April and just bought a couple of funds and did not pay any dealing charges I’ve just topped them up and still no charges. Lifetimes brokerage for £25?

Jamie

Fidelity charge 0.35% for a SIPP with no other charges if you just buy ETFs & investment trusts.(£5 dealing charge) Vanguard have an all world ETF that fits the bill.
CSD are waiving their SIPP fees if you have £30,000 over all investments. .0.25% fee & a good range of funds.

Some comments on Fidelity:

1) They have a limited range of Investment Trusts (better than it was but still limited), and they use Bloomberg ticker/code for them. e.g. Aberdeen Asian Income fund (AAIF) become AAIFL! CTY becomes CTYLL etc Only site in UK I have come across that does that: potentially confusing. If you search their site using the code, it comes up with nothing.

2) If you do a fund switch, the amount just dissappears from your account for a few days. No way to easily track what is happening. Does not show up on on pending orders etc. Your account total just shows a lower figures for a while.

3) If you access Fidelity via Cavendish, you still get the old charges (I believe) – flat 0.25%, irrespective of ETF or ITs.

4) I understand from other sources that ETFs amd ITs are traded once per day, like funds, rather then real time.

I have used Fidelity for many years, (although have migrated most of my investments away) and have always had a feeling of frustration in the way they do things.

K

I forgot a few more:
5) their website is infuriatingly slow.
6) often, website buttons/functions do not work if you use Firefox. If you complain, “Firefox is not supported”
7) I have yet to find a simple way to see a record of dividend payments
8) If you sell all holdings in a fund, you cannot see a record of transactions in that fund anymore.

K

Something to be aware of with Alliance Trust Savings is that if you sell holdings and want to move the cash out, the only way to get it out without waiting weeks is to pay £20 for a same-day CHAPS transfer.
There’s no charge for BACS transfers, but they take 2-3 weeks! (Most of that must be delays with internal admin setting up the transfer.) That’s a ridiculous delay.
It isn’t just a one-off glitch. I spoke to them and they said their internal target is to complete BACS transfers at the latest within a month, but faster if possible. (No mention of this in their Platform Guide.) They acknowledged that this is a pretty poor show.

I found ATS were not much better paying in either.
If you live abroad they will not accept a debit card payment even though i wanted to use a UK bank and it was my nominated account.
Also made a CHAP payment of £250k and they took days to allocate it to my account.”It is done manually from a printed list” was the best I got.Positively Dickension.
Question to anybody : ATS (and now i have moved) Sharecentre show no gain/loss on their platforms.I have to constantly check my average buying in price.In fact i use the Investor Chronicles subscriber platform for regular scrutiny.Is it as i suspect because if a client is maybe buying in on a regular basis in smallish parcels the fees show an immediate loss,only after some time does an investment begin to look worthwhile.It is really irritating if making a speculative trading purchase.

Vanguard UK have launched their brokerage at https://www.vanguardinvestor.co.uk

Unfortunately the fees are not what I was hoping for: 0.15% up to £250,000…

I have a 6 figure sum invested in Vanguard ETFs in my SIPP and yet according to these figures it’s cheaper to hold them with AJ Bell Youinvest instead of directly with Vanguard. Not that Vanguard are able to offer a SIPP yet. Also, Vanguard UK is not a mutual company like Vanguard USA. Oh, and they don’t allow US citizens to open an account. I’m not impressed…

@kragash – thanks for the qualitative feedback, that’s often overlooked when making these decisions.

The lang cat take on it:
http://www.langcatfinancial.co.uk/blog/thats-not-a-moon-thats-a-space-station-vanguard-launches-the-rebellion-weeps/

Does anyone know if the DeGiro spin-off DeZiro https://www.deziro.com/uk/ is likely to take off ever? They aim to offer fee-free trading and say that in ten years “.. the idea of having ever paid for online trading will be preposterous” https://www.finextra.com/news/announcement.aspx?pressreleaseid=61023

I’m tempted to sign up to be on their intial subscriber list, but hestitate as I can’t so far discover what or where the ‘custodian entity’ is where investments are held, supposedly making them totally ring-fenced. DeGiro even go so far as to say a 20,000 Euro investor compensation scheme offered by the Dutch government “.. is unnecessary for clients of DEGIRO due to the presence of the custodian and cash fund.” Hmm….

@premierfella thanks muchly for digging into this. I think you are right that it will be advert supported – I think it says so on their website. The TOC document is pretty clear about the relationship between the ‘entities’ and in the para after the one you quote they state (or claim…) “…the positions in Financial Instruments and money are segregated from the capital of DEGIRO and remain available for the customers of DEGIRO, even after insolvency of DEGIRO.” Yeah, right…

I guess this is pretty much what a lot of financial investment firms do though. I subsequently (re-)discovered there is a monevator article that covers this topic, which are also called nominee accounts so for people following this thread in years to come start here http://monevator.com/nominee-accounts/ in which the accumulator concludes “My best advice: Consider all the risks, diversify your holdings among a few brokers to reduce your risk, understand your right to compensation, and move on.”

@TI – Selftrade’s email on 4th May was titled ‘Trading in International ETFs” and said:

“We wrote to customers in May 2016 to advise changes in our pricing tariff which introduced an additional charge of 0.5% on trades in overseas securities. This has, until now, only been charged on overseas equities but will, with effect from 1 June 2017, be extended to include Exchange Traded Products. I am writing to you, as a matter of courtesy as you hold, or have recently held, a stock which will be affected by this change. If you sell the stock(s) on or before 31 May 2017, no additional charge will be levied.”

I asked them to confirm that the cost was only at the time of purchase (i.e. this wasn’t a platform charge). They replied today with:

“… can confirm that it only applies to the Purchase & Sale of eligible ETF’s, and is not an ongoing platform charge similar to the Funds Platform Fee. It will only be charged at the point of the trade taking place.”

I suspect the new charge will appear near the ‘Additional charge for overseas securities’ under ‘Other Dealing Fees’ shortly:

https://selftrade.co.uk/our-services/our-charges

Not quite sure of the judgement posted for Halifax SIPP. Looks ok to me.

@TA – Sorry, all I can add is that apparently I hold stock caught by the change. I hold CSP1, VJPN and VMID.

One minor correction to the Vanguard entry: free ETF dealing is twice daily.

This is based on the FAQ titled “Beyond the annual account fee, are there any other service (platform) charges?”

It says: “First, ETF dealing. As with dealing in and out of Vanguard OEICs and unit trusts, our standard ETF trading service is free. ETF trade instructions are batched and dealt at 10am or 2pm depending when we receive instructions. If you would prefer to buy or sell a Vanguard ETF at a live market price, there is a small dealing fee of £7.50 per transaction to cover our brokerage costs. “

Thanks for the hard work. Still puzzled by the judgement against Halifax Sharedealing SIPP however.

For the over 50s, Saga’s Share Direct has a Nominee Dealing Account and a Shares ISA, provided by Equiniti Financial Services. For shares/ETFs there is currently no platform fee and online trades are £11.95 (lower charges for regular investment, dividend reinvestment, or high volume of trades). Works for me as a home for my Vanguard ETFs.

Not to be confused with Saga Investment Services, which is provided by Tilney Bestinvest and has a different charging structure.

GRG June 6, 2017, 3:30 pm
Now that the ii, TD deal has gone through and TD is being merged with ii they are both going to use the ii pricing structure, I will now be paying an account fee for my ETF only ISA. With TD there was no charge for holding ETFs so it looks like a move, as being a very infrequent trader the two free trades per quarter has no appeal. I’ve been looking at Saga Share Dealing & X-O as these don’t charge platform fees or inactivity charges. If anyone has had any dealings with them any information would be welcome.

*A frequent trader rate or bonus is also available.

@ Charlie there is a link to a welcome message and video by Richard Wilson on the TD account login page.

There’s a thread over at MSE discussing TD Direct changes:
http://forums.moneysavingexpert.com/showthread.php?t=5540088

There’s mention of moving to IG Group, which I think would be worth adding to the Monevator table. For share/ETF portfolios there’s no platform fee so long as there is some account activity within a timespan of 2y – receipt of dividends counts as “activity”. There’s no fees for transferring in or out, a dealing charge of £8 and even some cashback available in return for transferring investments to them.

I’m pretty sure someone else has already brought up IG in the 1600+ comments here. They’re more known for roulette, sorry I meant spread-betting, but they now do “boring” S&S ISAs, SIPPs and dealing accounts too:
https://www.ig.com/uk/investments/isa/share-dealing

// Aside: I’ve had several “500 Internal Server Errors” when posting comment here recently. Posting comments still works but I just get dumped to an error page afterwards…

Apologies. I seem to have not refreshed recently enough to see the comment immediately above mine. Take it as a seconding of Charlie’s comment!
(I also got a 500 after posting.)

If you have funds as opposed to ETFs then you’ll pay 0.3% on first £250,000. If you trade ETFs then you’ll pay dealing charges. I think the ‘excitement’ over Vanguard is that they have weighed in with a good offer, although not the best as you rightly say, and they have a track record of pushing down costs over time. So they’re likely to get better and put the squeeze on any platform that thinks they can sit back and milk it.

Further to my comment from April 27 this year, Youinvest appear to have now gone live with their two-factor authentication, giving all customers the option now.

Jamie, wouldn’t Halifax or iWeb be better?

Halifax would be £12.50 to buy + £12.50 to sell = £25
iWeb would be £25 signup + £5 to buy + £5 to sell = £35

@Jamie – Or buy and sell it with IG, which has no set-up fee and costs only £8 a trade (or, if you’re a gambling man, only £5 if you make the minimum of one spread bet a month). That’d be my choice for simplicity.

I invariably buy accumulation units in any fund that I have to hold outside a tax wrapper, to avoid liability to income tax on the dividends.
Only if the capital gain on this particular OEIC is likely to exceed the annual CGT exemption and the owner is a low (or nil) income tax payer would it make sense to divert some of the growth into dividends by buying income units. Isn’t the holder’s highest rate of income tax likely to exceed the rate at which they’re liable to CGT, anyway?

@DianaW – my understanding is that dividends automatically reinvested in accumulation units are subject to income tax in exactly the same way as dividends paid out in cash on income units. In either case the dividends need to be declared on the self-assessment tax return. The dividends automatically reinvested on accumulation units effectively amount to new capital purchases and increase the base purchase cost for CGT assessment purposes. It is this tracking of these frequent purchases which is a bit painful CGT reporting, as well as the pain of paying income tax on dividends not actually received directly as cash. The advantage of accumulation units is the lack of reinvestment expenses of the dividends but there is no tax advantage to these units.

Not declaring accumulation unit dividends for income tax under self-assessment would not be legal tax avoidance but illegal tax evasion, I believe.

@DianaW. Charlie and Mike are correct – there’s no getting around dividends whether they come from Inc or Acc funds. Your broker should send you an annual statement which details what you need to declare. I’m with Hargreaves Lansdown and they do this with admiral clarity, usually a couple of months after the financial year end.

Of course, in the old days you had tax credits and now you have the Dividend Allowance. So depending on your income/tax/investments status you may not be owing any tax. The dividends still need to be declared, though…

Cheers

Richard

Looking for a little help from people with sharp eyes, the table is good, but I’m looking at several brokers with similar prices and trying to find the best choice for my circumstances.

I’d like to transfer an employer stakeholder pension into a SIPP (approximately £32k). I’ve also got a £3k SIPP with Best Invest that I’d consider consolidating, but the fees for transferring look to be a deal breaker).

Would Close Brothers be my best bet? I will be adding to the SIPP to supplement a new DB pension, but it will only be a few £k a year for the foreseeable future.

Any thoughts appreciated!

Does anyone have thoughts shout Cavendish asking to make a bank transfer of SIPP investment in your their account. I ffound it weird that they don’t withdraw the amount ftom the account themselves. I contacted Barclays where I hold current account and was advised not ti make a transfer because it becomes my responsibility if something goes wrong. Whilst if they withdraw from my account bank can help me. Is it a normal practice for Cavendish?

I’m new to the game of DIY investments so apologies if this has already been clarified.

Due to the organization I work for many of the brokers are off limits. I’ve ruled out HL due their costs being higher, this leaves with me with Self Trade on the % front and Alliance Trust on the fixed fee.

As I already have a SelfTrade account (holds some Barclays stock I acquired as part of a share save scheme from years ago) I’m leaning towards remaining with them for now, until my investments are over 50k.

I’m yet to decide on whether to go down the LS route or a more DIY portfolio holding several funds. If I was to go with a LS product and drip feed monthly what kind of fees would I be paying monthly with Self Trade? 0.3 percent of the total invested per year up to 50k. Dealing funds – 0 – Is dealing funds counted as me investing whatever amount per month into the LS? How about the ‘Regular Investing’ fee of 1.50 – is this the fee I’ pay each month for money invested into LS? If I wasn’t to go down the LS route and choose several funds to drip feed into each month, would I have to pay 1.50 for each fund I add money to?

@A Different Richard
Is tax payable on dividends on Acc funds within an ISA?

We have retired and we are trying to ‘increase our income’.
We are fully invested in ISAS.
From an Inland Revenue perspective – are dividends, from shares, unit trusts, OEICs, EFT’s treated in the same way.
For tax return purposes – which date is used – i.e the date the dividend declared, the date it is paid or the date it reaches your account.
Thank you in anticipation
Paul

Hi Alex, I will check but I’m aware of colleagues that were ‘forced by the compliance team to move their investments from the Halifax platform when they joined recently. I work for a large American investment bank, the list of permitted brokers is circulated to us quarterly.

Hi Bruno.

Good find, are they part of Barclays Stockbrokers as I the approved list specifically says Barclays Stockbrokers. I’ve dropped compliance an email to see what they say.

Looked up Bruno t on the directory… is the 2nd letter of your surname a?

Cheers

Hi

Really need to some help.

Working abroad from august for two years and after I’ve maxed out my current account I want to invest in some sort of pension or stocks and shares account but I’m non-resident so I can’t open an ISA or contribute to my existing one and can’t open a Vanguard account.

Can anyone suggest a good option for me to save some money away?

Thanks in advance.

@Todd
I’m currently working abroad. You’re correct you cannot make any contributions to ISA accounts during the period you are non-resident. Unfortunately DIY platforms are few and far between for expats. Instead you will find an array of ‘off-shore’ saving products (usually insurance linked), with horrendous charges all pushed by ‘IFA’s’ with zero regulation and even less morals (shouldn’t tar all with the same brush but the good ones are few and far between. I wont bore you all with my story, but suffice to say my advice is stay well clear!

TD International are one option to look at. Then there is also Saxo. I dont know much about either of them so cant recommend one-way or the other. What I would suggest however is to consider just keeping a normal trading account with your current platform. Yes this will of course subject to tax, but if you are only taking a two year posting and are drip feeding each month, you may find any dividends earned in that account will be less than the allowance anyway. You can always transfer to your SIPP or ISA when you return and are entitled to make ISA contributions (depending on if you make maximum contributions usually or not). That may mean CGT but if you are a long-term buy and hold investor you probably find you won’t be using you £11,000(?) CGT allowance each year anyway.

Im going to check Saxo and TD International out over coming months as I’ll soon be at a stage where I’ll need to cap my standard trading account.

Good luck

Am I missing something here?

x-o.co.uk charges no annual platform fee – surely that has to be a huge bonus for most investors (plus there is no entry fee).

Why would anyone bother with the flat fee or percentage fee brokers?
I appreciate it’s not possible to hold funds with x-o.co.uk – personally that doesn’t bother me (or maybe I just don’t fully understand the relative pros of index funds over ETFs…)

I’ve read Lars Kroijer’s ‘Investing Demystified’ and am trying my hardest to implement a ‘rational portfolio’.
As far as I can tell, this can be implemented completely using ETFs.
The infrequent trading of this passive approach means the lack of free trades with x-o.co.uk doesn’t concern me too much.

I’ve got an ISA, SIPP and trading account to transfer, currently held with Hargreaves Lansdown (oh dear!)

I think I will go with x-o.co.uk (providing they have the ETFs I want) unless I really am missing something here.

Thanks Passive Pete,

I had a little interaction with x-o.co.uk, it made me laugh, but hasn’t really put me off them.

I sent a quick two line email:
“I am thinking of joining x-o (transferring my ISA, SIPP and trading account).
I would like to know the full list of ETFs that you offer – where can I get this information?”

They responded:
“Thank you for your email.
We are an execution only broker and do not offer the service you have requested.
All clients are advised to research the stock they wish to invest in. You can buy and sell shares in most companies that are listed in the UK. This includes dealing in equities, bonds, warrants, ETFs, investment trusts, shares listed on the IRS (International Retail Service) and CDIs of US stocks.
Please note that you cannot deal in foreign shares that are listed on overseas markets. If you wish to invest in a CDI of a US stock you will need to complete a Form W-8BEN before you can trade.”

I’m still none the wiser how one can find out which ETFs they offer before actually signing up with them. I appreciate they are an execution only broker and offer a no frills service and must keep costs to a minimum, but I thought I might get a more helpful response – I wasn’t asking them to be my financial advisor. 🙂

Ruby,
I have my SIPP with X-O and haven’t experienced any issues with their service. In terms of ETFs, I would be surprised if they didn’t offer every ETF listed on the LSE. You’re probably aware but their answer was lifted from FAQ 12 – shame they couldn’t answer your actual question!
You could open a normal dealing account with no obligation just to check whether you can trade in the ETFs you want, you’d have to go through the usual KYC and AML checks though. If you list your tickers I can check for you, if you like?
And no, I can’t believe how cheap they are! I first used them to first convert then sell paper share certificates, which was a fraction of the price of the nominee service.

Thanks all, I’ve set up a trading account with x-o.co.uk so I can check things out 🙂

Hi all,

I have what I imagine is quite a basic question. How do you pay the platform and OCR fees? I’m still in the research stage and new to investing, and from reading the above I would want a percentage fee broker. I’m thinking Cavendish Online due to being similar to Charles Stanley which the S&S portfolio uses but without the exit fee. However I don’t really understand how the buying side works. If I put money in monthly does it go into an account with the broker, and I can then distribute the money into my funds from there, in which case the broker takes their fee from that account? Or do they sell some of your units to cover the costs?

Thanks in advance

@Liam
Typically your money credits a cash account with the platform/broker and fund transactions are made via that.
Platform fees will usually be taken from your cash balance with the platform – fund units would only be sold if you didn’t have sufficient cash to cover them when they fall due (and there is often some penalty charge involved if that happens).
The OCF relates to the fund itself – direct fund charges are accounted for in the fund pricing, which is why they are often seen as a “hidden” cost (so OCF is not something to worry about in terms of the cash balance at the platform).

Thanks @Kraggash. That is some crazy way of working at Fidelity – I know monthly fees are probably a drop in the ocean for many of their clients but that must surely drive those who manage their portfolio based on % weights nuts! I wasn’t aware that any platform did that, but if Fidelity do it I guess there may be others.

@premierfella
Yes, it is not so much the amount: I like to keep a close track of my holdings ‘offline’ (using MS Money), and with fund + ISA account for both self and wife, that was 96 (48 x 2 as each transaction is a sell, then pay fidelity) extra transactions per year to track. Each non- ISA transaction gave rise to a capital gain/loss.,,,,

@ Liam

No, Fidelity will show it as one transaction, a ‘sell’ of some of your largest fund.

However, my records have to show it as a ‘sell’ (money into cash) and then a ‘debit’ (pay cash fee to Fidelity)

A question for anyone who is using or has used cavendish / fidelity.

I set up my funds within my ISA using cavendish online, although my account is with fidelity, when I want to add to my funds do I do it using the dealing & new accounts option on fidelity website, or go back to cavendish online, because I believe they charge different platform fees?

Thanks

@Liam
I do not think it matters, as your account will be marked as going through an intermediary, but for clarity probably best to go through Cavendish. Note, once you go through Cavendish portal, a cookie is added to your browser, so if you try to go to the Fidelity site, you are redirected to thje Cavendish ‘skinned’ version.

As an aside, I was a long term direct Fidelity customer, and latterly went through Cavendish to reduce ongoing costs. For some reason, when I access the Fidelity site, I can choose if I wanted to use the ‘direct’ or ‘via intermediary’ version. The former is a much updated site, and allows you to easily see e.g. capital gains realised so far in the current tax year and other good stuff which does not appear on the Cavendish/indirect site.

While I am at it…. when I moved to Cavendish, the call centre response was downgraded a bit. Did not worry me, as I seldom used it. However, I have noticed that now, if you send a secure message to Fidelity, you get a call back from an Indian call centre. If you are not vailable, they leave a number to call, plus a six digit extension number, plus a six digit issue code…. If you ignore it, they send the secure messaging response….

I’m trying to find which platforms charge the least for UFPLS. It’s easy to find the cheapest annual platform fee but what we really need to know is charges when you start taking your pension.

@Liam
In the past I have noticed a discrepancy in the immediate transaction details when the deal has just been done. I noticed that the details later (eg in the document they post on line, which follows a few days after the transaction) was correct. If I remember correctly, it was down to a difference in the number of significant digits after the decimal point provided for the fund price.

I would be interested to know their answer!

Any clarity on the II and TD Direct merger and how it affects their pricing/platform/products yet?

I’m just at a stage with my ISA where it would be more beneficial to transfer my funds from CSD to a fixed fee platform and am eyeing either Halifax SD, II or TD Direct…

@Kraggash

I have a reply (via secure message after ignoring 3 phonecalls and voicemails from an Indian call centre!).

Basically I was doing the calculation the wrong way round. I was multiplying shares held (to 2 decimal places) and share price (to 4 decimal places) when actually I should have done transaction value divided by share price (to 4 decimal places). I assumed as they gave shares owned to 2 decimal places that was finite if you like, when actually shares held is the number that runs to many many decimal points. I hope that makes sense, I’ve written this out a couple of times to try to find the best way to explain!

I might be missing something but Vanguard does not appear cheaper where it matters ie. ETFs than Hargreaves Lansdown, since there is no platform fee on HL for ETFs. Of course you’d generally only want to use Vanguard for ETFs so you’d pay the 0.15% platform fee plus the ETF annual charge of say 0.12%. With HL you just pay the 0.12% plus the share dealing price of £11.95 so assuming you’re investing enough, it would be more cost effective. Or have I missed something?

Yeah looks like you’re right Andy. Had never noticed that outside of a ISA/SIPP then HL are actually a competitive flat-fee broker. Why do you say that you would only want ETF’s from Vanguard though? Their funds are very popular too e.g. Lifestrategy.

Also one reason the funds may be preferred is that the ETF’s are domiciled in Ireland and the Irish compensation scheme only covers up to €20,000 where as the funds are UK domiciled and covered up to £50,000 by the FSCS.

X-O have been fine for me so far, the only slight problem was that it seemed to take them a long time to accept a payment into my SIPP.

There are plenty of income focused tracker funds and ETFs. Personally I like iShares UK Dividend (IUKD), but there are others like the SPDR S&P UK Dividend Aristocrats. Most of the WisdomTree ETFs (which I like a lot) are dividend focused and cover most regions of the world. Just be aware that the dividends are not necessarily “healthy”. High dividends can be caused by companies that have gone “ex-growth” or shares that have dropped heavily in value, or so-called “value traps”. Also, don’t get too focused on “income” being the same as “dividends”. You can make your own income by selling shares to make withdrawals, especially within a tax wrapper. The above mentioned ETFs use differing levels of ‘quality’ filters to try to avoid duds, or use broker forecasts of forward dividend yield (which can be wrong). But, I actually prefer a well-designed filter to an expensive manager deciding which dividend shares to hold. My only fear is that with interest rates being so low, dividend-paying companies are all the rage and so could be over-valued.

@Mike, Monevator has a list of good low-cost funds and ETFs. JustETF.com has a good “screener” for different types of ETFs. Your brokerage will probably have an ETF screener also. I subscribe to both Money Week and Investors Chronicle, but you need to ignore most of the financial news “noise” and be skeptical of anyone trying to make money using your money. You can’t go far wrong by just choosing one of the Monevator sample portfolios. There’s no such thing as a perfect portfolio, but it needs to be simple enough and diversified enough that you are not tempted to trade too much or panic when there is a crash or high volatility. I spend a lot of time researching, but trade very rarely. No,
I’m not in the business, but I have a bookshelf full of personal finance and investing titles. Doing nothing is hard, but usually the best course of action.
Yes, I avoid synthetic ETFs. I prefer my money to be invested in the things I’m actually tracking.

Thanks to both again.
@TheInvestor… in fact I had stumbled on one of these pages on “deaccumulation” and suspected it had something to do with the sort of thing I was wondering about… but the page in question, on investment trusts, is kind of beyond my understanding, and I’ve heard enough about ITs to make me just want to stick with dead boring alternatives. But now I see there’s a whole section on “deaccumulation” and I shall endeavour to understand as much as possible. In fact “deaccumulation” isn’t necessarily where I’m at: having had discussions with my dad about this kind of thing, it seems that maybe income-focused stocks (as opposed to growth-focused) should possibly form a fair part of anyone’s portfolio. Anyway, I’ll look forward to the promised article.

@premierfella
Well, I see the splash on the landing page, but I see no details. or indeed any mention, of cashback anywhere else on the site!

One thing missing above is that Bestinvest charge an additional £50 account closure for (J)ISAs and £75/£175 for SIPPs depending on how long you have had your account. This is on top of the £25 per line charge.

Is the comment on Halifax Sharedealing SIPP correct? Maybe it’s me but don’t see why the less than £50 k comment applies?
However, timely article and thanks for the good work.
Ps, any chance of you having another look at the HSBC global strategy funds at some time: they have added to the range and reduced costs. Your 2012 article wasn’t in favour but maybe things have changed 🙂

Could someone clarify a couple of things for me. iWeb charge £5 for dealing funds but make no charge for regular investments so if I want to make monthly investments into my funds does it cost me £5 per month, or do I store up the cash & invest in a fund every quarter?
Second thing is Vanguard who have a zero charge for dealing ETFs twice per day but charge £7.50 at other times. Completely baffled by this one.

TD Direct have told me via Twitter that “The current percent based platform fee is being removed and replaced with a flat commission, the same as trading shares.” when they move over to Interactive Investor.

Do all brokers take the dealing commission from the amount you are investing? If so, why is this done rather than billing a debit card?

Youinvest give you the option with normal trades to include or exclude the charges [not with Regular Investment though].

@CisforV can confirm iWeb and TD Direct both take it from the amount being invested. As my investments are in an ISA I would much rather they bill my debit card than take it from my ISA. As you say, it doesn’t seem right!

@Charlie sorry no experience but IG looks interesting at £8 a trade and no platform fee. I have only just opened a TD Direct account so it’s a bit of a pain that I’ll have to move it when they move to the ii pricing model. I was thinking X-O.co.uk at only £5.95 a trade?

Cheers for that @Mr Optimisitc. They look intriguing, and the new OCFs look tasty, though after re-reading the original article, they didn’t go down too well with @TA last time round (though I haven’t compared closely to see if things have changed).

Appalling inaccurate feedback from the Interactive Investor “help” desk over several months!
I have been repeatedly been informed both on the phone and every 3 months that the £80 admin fee on my ISAs was being taken from my account associated debit card and then having this confirmed after the event.
However, the “help” desk have just actually discovered that they have been misinforming me and the £80 admin fee has, in fact, been taken from the ISA investment itself.
Obviously, if you want to maximise your investment in the ISA, this is the last thing you want.
The “help” desk have also now finally informed me that they can only take the £80 ISA admin fee from the associated debit card when the total investment in the ISA is less than the £80 investment charge!
Only if the debit card will then not cover the £80 admin charge will they draw this to my attention.
Do they have the slightest conscious awareness of what they are doing all day, every day?

I’ve still been unable to find a low cost online broker where i can buy some Vanguard funds from where i reside (Gibraltar). Would anyone here be able to recommend a reputable, low-cost platform? Many thanks!

I closed accounts with II due to several mistakes by their customer services – ranging from the trivial to really quite serious – I completely lost faith in their basic competence.