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  • FIRST POST
    • SnowMan
    • By SnowMan 8th Jan 17, 8:10 PM
    • 3,101Posts
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    SnowMan
    Coolly Comparing Investment Platform charges - SnowMan's spreadsheet
    • #1
    • 8th Jan 17, 8:10 PM
    Coolly Comparing Investment Platform charges - SnowMan's spreadsheet 8th Jan 17 at 8:10 PM
    It isn't any longer possible to edit the post linking to my investment platform comparison spreadsheet, so I thought I'd set up a new thread.

    The thread is set up to provide a link to a spreadsheet enabling annual platform charges to be calculated and compared between platforms. This includes both custody charges for holding funds and/or shares/ETFs, and for dealing costs based on the number of annual sales and purchases of funds or shares/ETFs.

    The spreadsheet (version 30 currently) can be downloaded by going to this link and downloading the file.

    https://drive.google.com/file/d/0BxA6Przq6KI1TnZsaEtPZEtCd3M/view?usp=sharing

    The basic idea is that platform charges and fund manager charges are now separated. So the starting point in looking at costs, in choosing an investment platform, is to compare platform costs for your own particular mix of ISAs, dealing account and SIPPs and based on your mix of funds and shares/ETFs.

    The principle is that fund manager costs can be ignored as they cancel out, that is they are the same for each platform. This ignores any 'super clean' funds offered by some platforms, certain 'dirty' funds which have higher charges, and ignores the lack of availability of some funds or ETFs on some platforms.

    The answers are shown as £ figures and percentages (so you can use the latter to add in your average percentage fund manager cost to estimate your total cost).

    Most of the other comparisons I have seen only compare ISA only or SIPP only or dealing account only portfolios. This does not allow for the considerable discounts on SOME platforms for holding ISAs and SIPPs and dealing accounts on the same platform.

    That is why the spreadsheet allows you to add in all the different accounts so these discounts can be considered.

    It is also a good idea to look at options of keeping funds and shares separately. This is why the spreadsheet works out an everything together cost, a shares and ETFs only cost (based on the shares and ETF element only) and a funds only cost (based on the funds element only)

    There is also a column that calculates exit charges by way of re-registration. High exit cost platforms should other things being equal be avoided, because it will be difficult to switch to other platforms following a price increase, without significant cost.

    Some of these platforms (in particular AJ Bell Youinvest) have form for putting up charges without allowing customers the temporary option of a free exit through re-registration (past OFT guidance seems to suggest they can't do this but not everyone will want to take a case through the county courts, and the legal position remains unclear). The Financial Ombudsman Service, in my view, are causing significant customer detriment by not properly assessing fairness in relation to applying unfair terms legislation, and this is compounded by the inaction of the Financial Conduct Authority to deal with this issue.

    The spreadsheet is a continual work in progress but it is just about getting there. Because of the incredible complexity of charging structures and the complicated interactions between accounts there are bound to be a few errors in there.

    I will update the spreadsheet and link when a new version of the spreadsheet is produced.
    Last edited by SnowMan; 19-05-2017 at 9:02 AM. Reason: Version 30 link added
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Page 2
    • racey
    • By racey 18th Apr 17, 8:19 PM
    • 124 Posts
    • 43 Thanks
    racey
    Brilliant spreadsheet tool.
    If I'm reading it correctly, someone with £150k in ISA and £50k dealing ( all in funds) with Charles Stanley would save over £400 a year by transferring to iWeb ( assuming about 10 trades a year).
    Are there any snags in doing this? Are the same funds available in iWeb?
    • bowlhead99
    • By bowlhead99 18th Apr 17, 9:32 PM
    • 6,417 Posts
    • 11,360 Thanks
    bowlhead99
    If I'm reading it correctly, someone with £150k in ISA and £50k dealing ( all in funds) with Charles Stanley would save over £400 a year by transferring to iWeb ( assuming about 10 trades a year).
    Are there any snags in doing this? Are the same funds available in iWeb?
    Originally posted by racey
    Not all the same funds are available, based on previous comments on this forum. You can see a list of what they (IWeb or Halifax Sharedealing) offer on the http://www.halifaxfundscentre.co.uk/ website.

    For example they don't have any PAIFs (so that's an unnecessary 20% tax on your net income from several major UK property funds that you might have wanted to hold directly in your ISA, but have to hold a taxpaying 'feeder fund' instead) ; they are missing a number of popular non-UCITS funds (e.g. Lindsell Train, Blackrock Consensus range, L&G Multi-Index range). However, you could always call them up and explicitly ask them before you switch, to avoid being misled by what is or isn't showing on the site.

    For many people they will be absolutely fine and if a fund isn't available, will select a suitable alternative - there are, after all, a couple of thousand choices. Of course there are only a thousand choices once you realise that an Inc or Acc version of the same fund is still basically the same fund. IMHO, if you are going to switch a £200k fund portfolio to save £400 (about 0.2%) of charges, make sure you are not left with constrained choices on what you can hold (asset allocation and fund selection can easily make a 0.2% difference a year).

    Brilliant spreadsheet tool.
    Originally posted by racey
    Can't disagree with that!
    Last edited by bowlhead99; 18-04-2017 at 9:35 PM.
    • SnowMan
    • By SnowMan 7th May 17, 10:31 AM
    • 3,101 Posts
    • 5,753 Thanks
    SnowMan
    I've uploaded version 29 of the spreadsheet (link in the opening post). In this I've added a sheet called 'SIPP flexible charges' tabling the extra costs of flexibly accessing pensions.

    These costs include drawdown set up costs, extra annual costs while in drawdown, charges for UFPLS payments, and closure costs amongst others things.

    It is simply a table of extra costs of accessing the pension (rather than a calculation of extra annual cost). Many of the flexible access charges such as set up and closure costs are one off charges so don't easily equate to extra annual costs. The user is left to work out what those extra flexible charges might amount to as an average annual extra cost over the period that flexible access is taking place. Put simply

    Total platform cost = main platform cost + extra charges for flexible access.

    The main annual platform cost of holding the investments is estimated by the spreadsheet as it always has done.


    Remember using platform A with no extra charges for flexible access, rather than platform B which charges explicitly for flexible access, doesn't work on cost grounds if the extra main platform costs for platform A are greater than the explicit flexible charges for platform B.

    And conversely using platform A with lower main platform charges than platform B, is on cost grounds not a good option if there are extra flexible charges on platform A (vs platform B) which makes platform A overall more expensive.


    Perhaps those looking to compare SIPP costs can be split into 3 groups

    1. VERY CLOSE TO ACCESSING SIPP: it is important to work out which platform is cheapest taking into account the availability of flexible options, and the extra costs (if any) of flexible accesing their SIPP.

    2. FAIRLY CLOSE TO ACCESSING SIPP: it is important to take into account the extra flexible charges of their platform. If these are high then consider also the transfer costs of moving to another provider to access the pension through another platform. If the SIPP is small and will be emptied in a short period once accessed, also consider any closure charges that apply. These closure charges are often based on the period the SIPP is held rather than the period over which flexible access takes place, so there can be logic to transferring before accessing the pension.

    3. MANY YEARS FROM ACCESSING SIPP: the extra flexible charges are of interest but of limited relevance


    This is my first attempt at detailing the flexible charges, and some of the platforms fee schedules are very unclear or incomplete. So it is particularly important that you use the table only as a starting point for looking at flexible access charges; do your own research.
    Last edited by SnowMan; 07-05-2017 at 10:36 AM.
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    • LHW99
    • By LHW99 7th May 17, 10:50 AM
    • 761 Posts
    • 583 Thanks
    LHW99
    Fantastic work!
    • badger09
    • By badger09 9th May 17, 8:43 AM
    • 4,980 Posts
    • 4,178 Thanks
    badger09
    SnowMan you are a legend
    • Chordeiles
    • By Chordeiles 9th May 17, 5:19 PM
    • 80 Posts
    • 36 Thanks
    Chordeiles
    Hi SnowMan

    What a stunning piece of work ! So glad I found it as I look for a new SIPP (and probably ISA) provider.

    But I'm interested to note that Hargreaves Lansdown have managed to pull the wool over your eyes over the cost of drawdown, which it's true they say is free, but I discovered (only by asking the questions) that it is nothing like free for those with more than £250,000 in a SIPP.

    Here's how it works: Funds between £250,000 and £1,000,000 in a SIPP attract an 0.25% custody charge (as opposed to the 0.45% charge that funds below £250,000 attract). But when one moves into flexible drawdown Hargreaves Lansdown split a SIPP into two accounts, "SIPP" and "SIPP drawdown", and each of these two accounts attracts its own charges !

    Let's suppose I want to take a £25,000 tax-free lump sum this year, but draw no taxable income yet. This means I must move £100,000 into my "SIPP drawdown" account, withdraw £25,000 and leave the £75,000 invested. The £75,000 in the "SIPP drawdown" account now attracts a charge of 0.45% per annum, i.e. £337.50, whereas if Hargreaves Lansdown hadn't dreamed up this ripping wheeze to increase my charges it would still be in the "SIPP" account attracting a charge of 0.25% per annum, i.e. £187.50.

    So to me it looks like I'm being charged £150 for flexible drawdown with Hargreaves Lansdown. On that basis they are close to the most expensive for drawdown, which is (I suppose) where they feel most comfortable.

    The above assumes it's OEIC's I chose to crystallise. Does it help if it was shares I moved into the drawdown account ? No, in fact could be worse, as the £200 cap on charges for shares applies to both of these SIPP accounts (separately).

    With more than £1 million in a SIPP (not me, I'm afraid) then the hit is even bigger. Hey, you can afford it, HL reckon you won't miss it. But your SIPP might be all you've got, you need to make it last, so it's well worth keeping tabs on expenses that aren't one-off but which will apply every year for the rest of your life.

    I kept on asking the questions of HL because I really didn't believe what they were telling me. But in the end I realised they were deadly serious. But not quite serious enough to make this properly clear to their clients until the very last moment when they are about to move to drawdown.

    So I do think it's worth a cell comment in cells E23, F23, G23 of the "SIPP flexible charges" sheet.
    • grey gym sock
    • By grey gym sock 10th May 17, 2:26 AM
    • 4,040 Posts
    • 3,503 Thanks
    grey gym sock
    that's an interesting point.

    i think there are at least 2 ways a platform may handle the case where you crystallize only part of a pension.

    they can (like HL) have 2 separate pots, 1 crystallized, 1 uncrystallized, each containing separate holdings. (e.g. suppose you have a £400,000 uncrystallized pension pot, and then you crystallize £100,000 of it, and take a £25,000 PCLS. now you have a £300,000 uncrystallized pot, and a £75,000 crystallized pot (and the 2 pots may contain similar, or completely different, holdings).)

    or they can have a single pot of holdings, but record that a certain percentage of that pot is crystallized, the rest isn't. (so you now have a £375,000 pot, which is 20% crystallized, 80% uncrystallized (and the pot contains a single set of holdings). these percentages won't change when the value of your investments rise or fall; but will change when you draw income from the crystallized part, or when you crystallize more of the uncrystallized part.

    i think i've seen some reference to some platforms using the separate pots approach. not sure who.

    a single pot is better for minimizing charges. e.g. tiered charges (like HL's). or dealing charges, where applicable - suppose you want to change the investments you hold, in both pots - you would incur 2 sets of dealing charges.

    separate pots could be better if you want to pursue a different investment approach in crystallized and uncrystallized pots.

    (many people will not really need to part-crystallize in this way, so this won't affect everybody. taking a series of UFPLS doesn't get you into this, because the remaining pot is 100% uncrystallized. and just crystallizing the whole remaining pot is also fine.)
    Last edited by grey gym sock; 10-05-2017 at 2:33 AM.
    • infocares
    • By infocares 10th May 17, 9:01 AM
    • 2 Posts
    • 2 Thanks
    infocares
    thanks for the updates
    an amazing contribution..your knowledge is appreciated @ snowman..
    • ColdIron
    • By ColdIron 10th May 17, 9:49 AM
    • 3,162 Posts
    • 3,598 Thanks
    ColdIron
    i think there are at least 2 ways a platform may handle the case where you crystallize only part of a pension.
    Originally posted by grey gym sock
    Is there not an obvious 3rd way? Multiple pots but a single charge on combined assets? I don't know how Charles Stanley split their SIPPs but it is their charging structure for their ISA/unwrapped accounts
    • Chordeiles
    • By Chordeiles 11th May 17, 8:10 AM
    • 80 Posts
    • 36 Thanks
    Chordeiles
    Is there not an obvious 3rd way? Multiple pots but a single charge on combined assets?
    Originally posted by ColdIron
    Seems obvious to me too, ColdIron ! It is a totally arbitrary decision to apply the charges the way HL do. And considering that one is already paying top-dollar for being with HL, the word "greedy" comes to mind.
    • SnowMan
    • By SnowMan 19th May 17, 9:08 AM
    • 3,101 Posts
    • 5,753 Thanks
    SnowMan
    I've added the new Vanguard platform into the spreadsheet comparison. A link to version 30 has been uploaded to the first post.

    Although only Vanguard funds and ETFs can be held on the Vanguard platform, it is still a useful comparison of platform costs for those following an index-tracking investment stategy, hence the inclusion

    They have no SIPP currently (they are planning to introduce one in 2018) so charges are calculated only for dealing and ISA accounts.
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    • Linton
    • By Linton 19th May 17, 10:35 AM
    • 7,913 Posts
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    Linton
    Snowman - I tried to send you a PM but your inbox is full:

    Bestinvest's £120 annual drawdown charge only applies to accounts of less than £100K. For larger accounts it's free.
    • SnowMan
    • By SnowMan 19th May 17, 10:55 AM
    • 3,101 Posts
    • 5,753 Thanks
    SnowMan
    Snowman - I tried to send you a PM but your inbox is full:

    Bestinvest's £120 annual drawdown charge only applies to accounts of less than £100K. For larger accounts it's free.
    Originally posted by Linton
    Thanks. The 8 year anniversary badge message from MSE Badger may have filled up my inbox

    It does already mention that it's free for accounts over 100K in the cell comments, although you don't see the cell comments unless you download the spreadsheet.

    I presume that it is the current amount left in the drawdown pot that determines whether there is more or less than 100K and so whether there is an annual charge? So as the drawdown pot falls below 100K as money is taken out the annual charge is then triggered again? Although if there is uncrystallised SIPP money also presumably that counts towards the 100K also?

    Speaking more generally there is actually quite a lot of information in the cell comments.

    I might think about changing things to use numbered superscripts to individual entries and list the notes below the table, to make it easier to see the full commented info without needing to download the spreadsheet.

    A lot of the SIPP drawdown charge info is far from clear, for example I gave up trying to work out when the £302 closure charge for Interactive Investor applies.

    So any clarifications anyone can provide to improve the accuracy will be useful.

    Thanks again.
    Last edited by SnowMan; 19-05-2017 at 2:08 PM.
    I came, I saw, I melted
    • digannio
    • By digannio 23rd May 17, 2:54 PM
    • 150 Posts
    • 73 Thanks
    digannio
    This is a great tool for honing down your choices of platform. But I've not found the path that easy in going along the path of switching. I've got a S and S ISA through Cavendish and the size of it now merits flat fee rather %. However, lots of it is in L&G Multi Index 5 and neither IWeb nor Halifax carry the fund I have. Also Interactive Investor don't offer the particular class of Invesco Perpetual Global Targeted Income that I hold.

    So if I go with II, I'm left with the choice of selling and repurchasing the Invesco fund (which I don't want to do as I can envisage being out of the market for quite a while if the process drags on, as these things can do) or transfering most of my funds to Interactive Investor but leaving the Invesco fund with Cavendish... not ideal.

    Coupled with the fact that I have some reservations about whether the whole thing will be done properly as some of the transfer forms don't seem to cover a situation of leaving some ISA funds where they are while transfering the rest and I'm tempted to just leave things as they are and just pay a bit more.

    Must admit, I thought it would be a lot more straightforward and I would just find a cheaper platform and be able to transfer the lot over but many of the cheapest platforms (like iweb and Halifax) just don't cover popular investments, like L&G Multi Index, while with other platforms you can't find the same class of funds that you hold.

    All very frustrating.
    • Chordeiles
    • By Chordeiles 26th Jun 17, 4:08 PM
    • 80 Posts
    • 36 Thanks
    Chordeiles
    However, lots of it is in L&G Multi Index 5 and neither IWeb nor Halifax carry the fund I have.
    Originally posted by digannio
    Alliance Trust Savings offer L&G Multi Index 3 through 7. I'm guessing so do Interactive investor. So there are fixed-fee options apart from the Halifax (which is a sad operation whichever of its 3 different names you choose).
    • eskbanker
    • By eskbanker 26th Jun 17, 4:19 PM
    • 4,803 Posts
    • 4,532 Thanks
    eskbanker
    the Halifax (which is a sad operation whichever of its 3 different names you choose).
    Originally posted by Chordeiles
    I know it's commonplace to recommend looking at investing dispassionately so am surprised that anyone would consider the emotional state of a platform when choosing!
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