Investment platform charges – how much do you pay?

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If you invest your money via a platform, you’ll normally pay a charge for doing this. It can be a fixed fee or a percentage of the amount you invest. Find out what investment platform charges are before you use them to invest.

How investment platforms work

If you invest via an investment platform you generally don’t get advice about which funds you should put your money into. Instead, an investment platform will let you buy different investments from a range of providers.

SAVVY TIP: Investment platforms used to be called fund supermarkets when they were first launched. These days, they’re mostly referred to as platforms or investment platforms.

Investment platform charges

The charges you’ll pay depend on the platform you invest through, as well as how often you trade or switch funds.

There are two types of charges you’ll pay if you invest in funds through a platform:

  • Platform charges: These are charges imposed by the platform for buying, selling and administering your investments.
  • Charges that the different funds impose: There are thousands of different funds so we can’t list all of them (!), but at the end of each section on a platform we’ve included a range of theirbest selling funds charges.

SAVVY TIP: Most companies will list ‘bundled’ and ‘unbundled’ (also called ‘clean’) funds on their platform. Bundled means that a fee for the platform has been added into the fund charge. Since 2013, bundled funds have been banned. However, some investors may have money in these funds from before 2013. If you have a bundled fund, platforms will normally give a discount on those charges. Unbundled means the fund just charges its own fees and you pay the platform charges on top. Find out more in my article Clean funds explained: what are ‘clean share classes’ or clean funds.

Investment platform charges
We’ve looked at a range of the biggest platforms and the charges they impose. We have to say at the outset that it can be quite hard (sometimes very hard) to find this information. We think it should be much easier.

Hargreaves Lansdown

Hargreaves Lansdownoffers ISAs, SIPPs and fund and share accounts.

Platform Charges: The way Hargreaves Lansdown sets its charges means that you may pay a different rate or level of charges depending on whether you invest in a stocks and shares ISA, whether you have funds that aren’t in an ISA or whether you have a SIPP (self invested personal pension).

Stocks and shares ISA: The annual charge depends on whether you hold funds or shares in your ISA. There are no charges for opening an account, holding cash or inactivity (namely, an account you’ve not touched).

Funds: The more money you have invested in your stocks and shares ISA, the less you pay in charges. The fund’s charging structures are tiered so that you pay 0.45% of the value of the funds invested on the first £250,000, the charges then reduce in bands. If you invest over £2 million in funds, you pay no charges at all.

Fund dealing charges: There are no dealing charges for buying or selling funds.

Shares: If you have shares in individual companies in your stocks and shares ISA, you’ll pay 0.45% of the value of the money you’ve invested in shares. HL caps this charge at £45 per year.

Share dealing charges: If you buy or sell online or by using the HL mobile app, you will be charged between £5.95 and £11.95 per deal, depending on the product and frequency of dealing. If you use telephone or postal dealing, you will pay a lot more – 1% of the trade value (minimum £20, maximum £50).

Extra charges: There may be additional charges if you want to do other things. For example, if you want to automatically reinvest your money or set up a Direct Debit for FTSE 350 shares and selected investment trusts and exchange-traded funds (ETFs). There are also charges for paper statements; to close your account; to set up automated sales to cover your charges and to transfer out or transfer between accounts. There is a full list of charges here.

Fund & Share Account:

Funds: If you invest in funds, but don’t hold them in a stocks and shares ISA, the charges are the same as for a stocks and shares ISA. You pay 0.45% of the value of the funds invested on the first £250,000, with charges tiered so you pay 0% on the value of funds over £2 million.

Fund dealing charges: There are no dealing charges for buying or selling funds.

Shares: There are no charges for buying or selling standard shares.

Extra charges: These are some extra charges (too many to list), which can be found on the HL website.

Minimum investment level: You can open a Fund & Share Account with £1. The minimum lump sum investment into a stocks and shares ISA or a Fund & Share Account is £100 and Direct Debits can be set up from £25 per investment per month.

SIPP (self invested personal pension): Hargreaves Lansdown is the UK’s biggest SIPP provider. A SIPP lets you invest in a wide range of funds as well as, for example, shares in individual companies.

Funds: The HL SIPP has the same tieredannual charges: you pay 0.45% of the value of the funds invested on the first £250,000, with charges tiered so you pay 0% on the value of funds over £2 million.

Shares: You pay 0.45% of the value of the money you’ve invested in shares. HL caps this charge at £200 per year.

Hargreaves Lansdown has 3,115 different funds. Multi manager funds are more expensive than average funds. Tracker fund annual charges vary from 0.06% to 1.20% (only two funds charge 1.20%). A typical tracker fund charge is between 0.1 and 0.2%. Actively managed fund charges can be 1.5% or more. Their best selling funds this quarter charge between 0.06% to 0.97%, with the average being 0.55%.

Rating: HL’s mobile app is rated 3.7 out of 5 in iTunes, its iPad app is rated 2.2 out of 5.

Cavendish Online

Cavendish Online is a fund supermarket that has over 3,000 funds.

Platform Charges: At the moment it’s online only, and doesn’t have a mobile app. There are three different charges that apply no matter whether you invest via an ISA or a pension.

  • A fund manager charge, which varies according to the fund you want to buy. It’s typically 0.75%.
  • A platform charge of 0.20%, reduced to 0.15% if you have more than £200,000 invested.
  • An ongoing fee of 0.05%.

So, a typical ‘all in’ charge would be 1%. There are no initial charges on unit trusts or OEICs, no annual fees, no charges for switching and no exit fees.

SAVVY TIP: OEIC stands for open ended investment company. It’s an investment fund that’s similar to a unit trust, but it has a slightly different structure and charges.

SAVVY TIP: You can find information about Cavendish Online’s charges on its website.

Rating: Cavendish Online are rated 8.2 out of 10 on Trustpilot.

SIPP: Cavendish Online’s SIPP is powered by FundsNetwork. The annual fee is 0.25%. This is made up of a 0.20% platform fee to FundsNetwork and a 0.05% ongoing fee to Cavendish Online. If the total value of all of your accounts (pension, ISA etc) is more than £200,000, you pay an annual fee of 0.20%, not 0.25%. There’s also the fund charge, which is typically 0.75%, although it can be less (see the savvy tip below).

SAVVY TIP:If you’re investing in tracker funds, a typical ‘all in’ fee would be 0.35% per year. This is made up of a fund charge of 0.10%, the FundsNetwork fee of 0.20% and Cavendish Online fee 0.05%.

To find out more about their SIPP charges, see the website.

Fidelity

Fidelity offers ISAS, SIPPs and fund and share accounts.

Platform Charges: Fidelity charges an annual platform service fee, which you pay each month, based of the value of all your investments.

Stocks and shares ISA: If you invest up to £7,4999.99 as a lump sum, you pay a flat fee of £45 a year. If you invest at least £50 a month, the fee isXX, or 0.35% of the value of your portfolio. If you invest between £7,500 and £249,999.99, you pay 0.35% and if you invest between £250,000 to £1 million you pay 0.20%. There is no annual platform charge on portfolios of £1 million or more.

SAVVY TIP: If you invest in exchange traded instruments including investment trusts, the fee is capped at £45 a year. There are no set up or exit charges and you won’t be charged extra for printed valuation statements. You can read information about all the charges on Fidelity’s website.

Funds: Fund charges start from 0.06%. Some funds have other charges, such as a performance fee or a charge when you buy or sell, or when the fund manager buys or sells.

Shares: There are share dealing charges (including on exchange traded funds and investment trusts) for each time you buy and sell. This includes switching funds and reinvesting dividends. You also pay £10 to buy or sell shares online within an ISA or £30 if you do this over the phone. There are some other charges and you can find a full list of these charges online.

Investment Account:

Funds and shares: If you invest in funds and shares, but don’t hold them in a stocks and shares ISA, the charges are the same as for an ISA.

SIPP: The dealing charge for buying or selling an investment trust or ETF within a SIPP is 0.1%. The charges for investing via funds are the same for a stocks and shares ISA, as outlined above.

Fidelity has over 3,200 funds. Tracker fund annual charges vary from 0.06% to 0.71%. Actively managed fund charges vary from 0.09% to 2.55%. Their current list of top ten best selling funds charge between 0.06% and 0.95%, with the average being 0.73%.

SAVVY TIP: Fidelity has a list of funds on which they have negotiated reduced ongoing charges. The discount will either be a payment that will be reinvested at the end of every quarter into the qualifying funds, or the discount will be built towards the fund’s ongoing charges. You can find out more about Fidelity’s fund discounts on their website.

Minimum investment level: £1,000 for a lump sum or £250 for a top-up. With a regular savings plan, the minimum amount is £50 a month with at least £25 going into each investment. If you invest less often, the minimum investment amount increases to £150 for quarterly, £300 for every six months or £600 if you invest once a year.

Rating: Fidelity’s mobile app is rated1.5 out of 5 in iTunes.

Interactive Investor

Interactive Investor offers ISAs, SIPPs and fund and share accounts. It charges you based on how you invest, as well as the value of your investments.

Platform Charges: You pay a quarterly payment of £22.50, which Interactive Investor turns into £22.50 of trading credits for you. These payments are not refundable and are collected even if your trading credits are not used. The credits do not expire, but the maximum value of credits you can build up is £90. Trading Accounts, ISAs and SIPPs that are held in the same individual name can be linked together.

Stocks and shares ISA:

Funds and Shares: Interactive Investor has over 3,000 funds. The amount you pay in charges depends on how much you have invested. If you have a stocks and shares ISA and want to buy or sell UK shares, funds (unit trusts and OEICs), bonds, gilts and/or exchange traded products online or via your mobile you pay £10 every time you buy or sell if you have up to £100,000. This is reduced to £6 for your first three months or if you are a frequent trader. You pay £40 per trade if you trade £100,00.01 to £500,000, reduced to £36 if you are a frequent trader, and £70 if you trade over £500,000, reduced to £66 if you are a frequent trader.

SAVVY TIP: A ‘frequent trader’ is someone who trades an average of ten times a month. Only online trades done in the UK count towards this ‘frequent trader’ tally.

It costs £1 for every individual purchase made using their dividend reinvestment facility (the minimum dividend value for reinvestment is £10) and £1 for each individual monthly purchase made using their regular investment facility.

There are no exit fees in your first year. There are no fees to set up an account, transfer to or convert share certificates to online holdings. There are other charges though, which you can find in their guide (opens as a PDF).

Investment Account:

Funds and shares: The charges are the same as if you invest via an ISA.

SIPP: There are no charges for setting up a SIPP or for transferring in. The annual fee for having a SIPP is £100 + VAT. It costs £300 + VAT if you want to close it. There are fees if you want to transfer out to another pension provider, for annual drawdown and more.

Minimum investment level: Their regular investing service allows you to invest from £1 per month.

Rating: The Interactive Investor mobile app is rated of 2.9 out of 5 on iTunes.

AJ Bell Youinvest 

AJ Bell was set up in 1995. Youinvest is its DIY investment platform.

Stocks and shares ISA: There are no charges for opening an account, making a one–off or monthly investment or transferring in from another ISA.

Funds: If you have funds in your stocks and shares ISA, you pay less in charges the more you have invested. You pay 0.25% on funds up to £250,000; 0.10% from £250,000 – £1million; 0.05% charge on £1million – £2million and no charge if you have over £2million invested.

Fund dealing charges: If you want to buy and sell investments online, the charge is £1.50 per deal.

Shares: If you have shares in individual companies in your stocks and shares ISA, you’ll pay charges of 0.25%, capped at £30 of the value of the money you’ve invested in shares.

Share dealing charges: If you buy or sell online, you will be charged £9.95 per deal. If you use telephone dealing, you will pay more – £29.95.

Extra charges: There are additional charges, which you can find on their website.

Dealing Account:

Funds and Shares: If you invest in funds and shares, but don’t hold them in a stocks and shares ISA, the charges are the same.

Extra charges:There are additional charges which you can find on their website.

AJBell has around 3,500 funds. The tracker funds’ ongoing charges figures (OCF) vary from 0.06% to 1%. Actively managed fund charges vary from 0.38% to 1.52%.  Funds in more specialist sectors, such as emerging markets, will cost more. The most expensive of these charges 2.45%. Their five best selling funds charge between 0.5% to 1.16%, with the average being 0.71%.

SIPP: There are no charges for setting up your SIPP, paying a single or regular contribution, transferring in from another registered pension scheme or for an account change.

The annual charge for shares (including investment trusts, exchange traded funds, gilts and bonds) is 0.25%, and this is capped at £100. The annual charge for funds (including unit trusts, OEICs and structured products) is the same as above.

Extra charges: There are additional charges which you can find on their website.

Minimum investment level: The minimum investment into the new funds is just £1. You can also set up a regular investment into an AJ Bell Passive fund with a minimum monthly investment of £25.

Rating: AJBell Youinvest mobile app is rated 3 out of 5 in iTunes.   

Alliance Trust Savings

Alliance Trust Savings charges a monthly account fee, which includes four online trades a year. It has a list of their top 20 best-selling funds each month on their website.

Stocks and shares ISA: You pay a£10 a month account charge which includes four online trades a year.

Dealing charges: If you want to buy or sell online is will cost you £9.99 per transaction. It’s £50 if you do this over the phone or by post. If you want to transfer you ISA to another provider it costs £100 plus VAT. They have other charges, which you can find here. If you’ve held an account for five years or more, you qualify for some discounts on the online and telephone charges.

Investment Account:

Funds and Shares: If you invest in funds and shares, but don’t hold them in a stocks and shares ISA, the charges are the same.

SIPP: You pay £17.50+VAT a month if you have a ‘savings’ account, or £23.75 plus VAT a month if you have an ‘income’ account. There are charges if you want to transfer in or out of your SIPP.

Minimum investment level:£50 either as a single lump sum or each time you make a regular payment.

ATS has over 2,700 funds. The tracker funds’ ongoing charges figures vary from 0.06% to 0.38%. Actively managed fund charges vary from 0.39% to 1.53%. Their top five best selling funds in August charged between 0.22% – 0.95%, with the average being 0.65%. The top 20 best-selling funds list is updated monthly and can be found on the ATS website.

Barclays Smart Investor

Barclays Smart Investor took over from Barclays Stockbrokers in August 2017. They post a list of their most popular funds each month on their website.

Investment ISA: Barclays Smart Investor has a single fee for stocks and share ISAs. It will cover the investments held across all of your individual direct investing accounts.

The charges are0.2% per year (online) for funds, 0.1% for other investments. You will pay a minimum fee of £4 per month and a maximum fee of £125 per month. If you buy or sell funds online, you will pay £3 per transaction (or £6 for other investments online), £1 for automated regular investments and £25 for all telephone investments.

SAVVY TIP: You can find information about all the charges on their website.

Investment Account: Charges are the same as if you invest via an ISA.

SIPP: You pay one monthly customer fee to Barclays that covers all your individual accounts as well as a transaction fee every time you buy or sell and investments. You’ll also pay a SIPP administration fee to AJ Bell Management Limited, the administrator of your SIPP. You pay this charge quarterly and it’s collected via your Barclays SIPP Account on their behalf.

You will pay 0.2% per year for funds and 0.1% per year for other investments up to £200,000 and 0% on funds over £200.000. The AJ Bell administration fee is £125 + VAT. There are other charges which you can find on their website (opens as a pdf).

Smart Investor has over 2,000 funds. You can find a monthly list of their most popular funds here.

Bestinvest 

Bestinvest offers ISAs, SIPPs and fund and shares accounts.

Stocks and shares ISA: Their annual ISA management charges are tiered – so you pay a lower percentage the more you invest.

Funds: If you have up to £250,000 invested with Bestinvest, you will pay 0.4%; if you have £250,000 to £1 million you will pay 0.2% and if you have over £1 million there is no charge.

There is a fund manager’s annual management charge, plus additional third party costs which are taken annually by the fund manager from the value of the fund. For new purchases, the ongoing charges figure (OCF) will normally be around 0.9% for equity funds, 0.3% for tracker funds and 0.6% for bond funds.

If you invested money in funds in the past, they may have been bundled (as we explained at the start of the article). Some fund managers charge a higher OCF but use part of it to pay Bestinvest an annual commission. Typically the commission is 0.5% a year but it can be anything between zero and 1% a year. They will rebate any commission they receive to you in full.

Fund dealing charges: There are no dealing charges for buying or selling funds.

Shares: If you have shares in individual companies in your stocks and shares ISA, you’ll pay £7.50 per trade, no matter how many shares you buy or sell (online). If you deal by telephone you pay £75 per trade (eek!).

A list of their charges can be found in their key facts doc (opens as a pdf):

Investment Account:

Funds and Shares: If you invest in funds and shares, but don’t hold them in a stocks and shares ISA, the charges are the same.

SIPP: Tiered fee begins at 0.3% for assets up to £250,000, 0.2% for assets between £250,000 to £1 million and 0% for any over £1,000,000. There is no annual service fee for the BestSIPP if you invest your pension in one of their ready-made portfolios (although the £100 administration fee still applies).

Minimum investment level: For most funds it’s a one-off investment of £50, with some being £100.

Bestinvest currently has over 2,500 funds. The tracker funds’ ongoing charges figures vary from 0.05% to 1%. Actively managed fund charges vary from 0% to 2%. Their ten most popular third-party funds over the last quarter charged between 0.07% – 0.97%, with the average being 0.72%.

Rating: Bestinvest is rated 6.8 out of 10 on Trustpilot.

Charles Stanley Direct 

Charles Stanley Direct offers ISAs, SIPPs and fund and share accounts.

Stocks and shares ISA: Theplatform charge for holding investments is 0.35% per year, with a minimum of £24 and a maximum of £240 per year.

Funds: You pay0.35% per year on the first £250,000 you’ve invested, tiered down to 0.05% per year for funds held between £1 million and £2 million, and above that it’s free.

Shares: You pay £11.50 each time you buy or sell a share.

A list of their charges can be found in their key facts doc (opens as a pdf):

Investment account:

Funds and shares: If you invest in funds and shares, but don’t hold them in a stocks and shares ISA, the charges are the same.

SIPP:There’s an annual administration charge of £100 + VAT, waived if you have combined assets (excl. joint accounts) across the platform in excess of £30,000. There are other charges, which can be found in their Rates and Charges pdf.

Minimum investment level: The minimum investment into a new fund is a £500 lump sum. The minimum amount you can pay into existing fund holdings is £100 and you can invest from £50 per fund per month through a regular monthly payment.

Charles Stanley has 4,053 funds. The tracker funds’ ongoing charges figures vary from 0.06% to 1%. Actively managed fund charges vary from 0.25% to 3% (although 3% is unusual). Their ten best selling funds from the last quarter charge between 0.10% – 0.95%, with the average being 0.50%.

Rating: The Charles Stanley Direct app is rated 3.9 out of 5 on iTunes.

Vanguard

Vanguard offers a stocks and shares ISA and a general investing account. They don’t offer a SIPP, but say that they are launching one at the end of 2018.

Stocks and shares ISA: The annual account fee is 0.15% per year capped at £375 on amounts up to £250,000. There is no charge on amounts over £250,000.

Funds: Ongoing charges figures range from 0.06% to 0.80% per year. The funds also have transaction and other costs and Vanguard says you’ll see the total costs in the charges document if you invest. There are no charges to switch holdings, deal, make payments or exit.

Shares: Vanguard doesn’t offer individual shares for investors.

SAVVY TIP: Vanguard is a digital service so they don’t send printed statements to you. You’ll get an online statement twice a year in PDF form, which you can print. If you need statements more often, then you can generate your own statements to print at home.

Fund & Share Account: If you invest in funds and shares, but don’t hold them in a stocks and shares ISA, the charges are the same.

Minimum investment level: You can invest from £100 per month or add a lump sum from £500.

Vanguard has 73 funds including their blended LifeStrategy and Target Retirement Fund range, index funds, ETFs and active funds. Their tracker funds ongoing charges figures vary from 0.06% to 0.38%. Their actively managed funds ongoing charges figures vary from 0.22% to 0.80%. Their ten best-selling funds from the last quarter charge between 0.06% – 0.24%, with the average being 0.16%.

Rating: Vanguard’s app is rated 4.8 out of 5 on iTunes.

Photo credit: Miguel Á. Padriñán from Pexels

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