Trading fee loophole with regular investments?

LeifGR

Selftrade offers (as does iii) a regular investment scheme, with a £1.50 per trade fee instead of the normal £12.50. The trade-off is that you need to relinquish control over the date that the trade takes place.

Now they state that you can change your instructions every month, and my interpretation is that you could use this to place what would in effect be a once-off trade and then cancel the instruction, saving £11 compared to the normal trading fee.

Have I missed something or is this a possible loophole? I recognise that using this frequently and consistently would be dishonest and that they may react to this by removing the facility, but if you just use this now and then I can't see a problem.

blinko

i cant see why you couldnt do that, the main drawback being timing eg once a week thing but then again if you are investing long term it wont really make a difference

premierfella

I think you will find that there are plenty on here and another well known investment message board that use the regular investment schemes (in my case iii) in exactly this way for "buy and hold" investments.

With iii I think you can set up a "regular investment" buy instruction but still cancel it as late as the day before the purchase is due to be made (which obviously reduces the chances of the price being too far out of line with your anticipated buy price unless a "BP" type event happens).

Lokolo

If the idea is to build up a portfolio then it's great. It's just not great for day trading.

xrjtg

It's not especially unethical either. The cost savings to them come from placing everyone's orders at the same time, and they still exist for one-off "regular" trades.