Low cost Stocks & Shares (Investment) ISAs: The Best Currently Available List!

Special_Saver2

I am tempted to use Cavendish / Fidelity Fundsnetwork for new ISA contributions given the low charges, but I think I will hold off transferring my unit trusts / OEICs from Cofunds for the moment.

I want to see what happens to charges after RDR before I start moving any money from Cofunds. Also, to transfer from Cofunds to Cavendish / Fidelity will involve selling and re-purchasing all my funds as there is no re-registration option. Some of my funds have a bid-offer spread such that if I sell and re-purchase them, it would take a few years before I re-coup the cost through lower annual management charges. If RDR forces platforms to allow fund re-registration (avoiding selling and re-purchasing) then it will be worth the wait for me.

SS2

TDM850

Interesting point for those looking for some leverage in their S&S ISA. Dual listed stocks such as Xcite Energy (XEL), Dragon Oil (DGO) and Asian Citrus Holdings (ACHL) can be held in a Stocks & Shares ISA. Tax year closes soon - a Traders Own S&S ISA account costs nothing, cram it with dual listed stocks and trade at £6 per trade flat fee, online, iphone or over the telephone. No management, quarterly or inactivity fees either.

koru

It would be incorrect to assume that Cavendish is now necessarily always the cheapest way to hold funds in an ISA. It depends on which funds you want to hold and how big your holding is and how long you intend to hold the funds.

For instance, if you hold Aberdeen Asia Pacific fund through Cavendish the rebate of commission is 0.5% per year, so the effective AMC is reduced from 1.75% to 1.25%. In contrast, if you hold the same fund through Alliance Trust Savings, they rebate 0.85%, so the effective AMC is only 0.9%. (Looks like they are rebating platform commission as well as trail, in which case they are unlikely to be much affected by the platform review currently underway.) Now, with ATS there's a dealing fee and also an annual fee for the ISA wrapper, so Cavendish might still be cheaper overall. But you really need to work out the situation for your own circumstances.

Some people who have a big holding in this Aberdeen fund and/or have big holdings in other funds that are cheaper with ATS would be better off with ATS. Others will be better off with Cavendish, because the rebate on many funds is the same as with ATS and you save on the dealing fee and annual ISA fee. And some might be better off holding some funds through one platform and other funds through the other platform, though obviously this is more hassle.

(Another issue is that in some cases Cavendish/Funds Network may not have the fund you want. For instance, they don't seem to offer any Troy funds. I'm guessing that Troy don't pay platform commission, given that they definitely don't pay trail commission, unless you are silly enough to buy the I class units which have a higher AMC.)

Rollinghome

koru wrote: »

(Another issue is that in some cases Cavendish/Funds Network may not have the fund you want. For instance, they don't seem to offer any Troy funds. I'm guessing that Troy don't pay platform commission, given that they definitely don't pay trail commission, unless you are silly enough to buy the I class units which have a higher AMC.)

Nor of course do HL offer any Troy funds other than as commission-paying I class units with the higher AMC.

Worth noting too that Cavendish/Fidelity in some cases offer classes of units with lower AMCs than HL.

For example HL offer M&G Optimal Income class X with an AMC of 1.5% and rebate of 0.1%, net 1.4%, whereas Cavendish/Fidelity offer Optimal Income class A with an AMC of 1.25% and rebate of 0.5%, net 0.75%, - so saving 0.65%.

jimjames

koru wrote: »

(Another issue is that in some cases Cavendish/Funds Network may not have the fund you want. For instance, they don't seem to offer any Troy funds. I'm guessing that Troy don't pay platform commission, given that they definitely don't pay trail commission, unless you are silly enough to buy the I class units which have a higher AMC.)

One I am having great difficulty finding anywhere other than HL is the Lindsell Train UK equity fund. It has 0.65% AMC which is presumably why HL impose the £2 monthly fee and also don't recommend it despite them giving glowing reviews of the managers when they launched a brand new fund with no track record but a high AMC.

koru

Rollinghome wrote: »

Nor of course do HL offer any Troy funds other than as commission-paying I class units with the higher AMC.

Worth noting too that Cavendish/Fidelity in some cases offer classes of units with lower AMCs than HL.

Agreed. I'm sure there are a few exceptions, but I will stick my neck out and suggest that in the vast majority of cases the vast majority of fund investors could find a lower cost platform than HL. Sometimes this will be ATS, sometimes Cavendish/Fidelity, sometimes Bestinvest, sometimes A N Other. Personally, I use all three, because each is cheaper for different funds and/or different wrappers.

I now have zero investments with HL, and I am sure that most (but maybe not quite all) of their clients would be better off if they looked around and realised that there are cheaper alternatives. Amazing, really, because this is a FTSE-100 business that would crumble overnight if it were not for the ignorance/inertia of most of their clients. Then again, the same could be said for many other big businesses, such as AOL and Talktalk, who routinely come bottom in surveys of customer satisfaction with broadband providers and have done so for years.

koru

jimjames wrote: »

One I am having great difficulty finding anywhere other than HL is the Lindsell Train UK equity fund. It has 0.65% AMC which is presumably why HL impose the £2 monthly fee and also don't recommend it despite them giving glowing reviews of the managers when they launched a brand new fund with no track record but a high AMC.

I would say that £24 per year as a platform fee for HL to purchase this and hold it for you is pretty good value. I would be surprised if any platform could beat this, because there cannot be much scope for Lindsell to be paying any significant commission or platform fee with that level of AMC. On a £10,000 investment, this increases the AMC to 0.89%, which is still lower than almost all active funds. If the investment is much lower than this, there might come a point when you would be better off choosing a different fund.

Edit: I seem to be saying that this is one of those few situations where HL might be the best deal!

westy22

Special Saver 2 - have you had a look yet at the new Barclays Stockbrokers site after their tie-in with Fidelity FundsNetwork? It would appear that they are going head to head with HL on price and flexibility. https://www.barclaysstockbrokers.co.uk/Pages/index.aspx

qwer78

I am a longstanding ISA investor and like many posters am keen on low costs - but not to the extent of hidden costs such as higher spreads, high fees for things like rights issues, charges that might rise over time, or high fees for telephone dealing when you cannot execute your trade online. Does anybody have bad experiences of unexpected costs with the cheapest providers.

My ISA's with Abbey Sharedealing. Historically they have been good value if you have a very small or very large ISA and their fees have been consistent for over a decade. They have been very good at handling corporate actions without charging. Furthermore, if I cannot buy or sell an ETF online, because I am dealing in a greater quantity than the automatic platforms provide, then they deal by telephone at the online price. I am also happy with the safety of their custody facilities. Customer service is knowledgeable and they have experienced dealers.

I wonder if it might be worth putting telephone dealing charges in the comparison table?

Special_Saver2

westy22, thanks for pointing out the Barclays account. I have just had a look through their pages on funds. From the introductory page and this page, it looks like the partial trail commission rebate is only valid from 20th February 2012 to 31st December 2012. As this is only a temporary offer, I am reluctant to add it to post 2.

westy and qwer78, I will consider putting Barclays and Santander in post 3 when I do my update this weekend.

qwer78, if you look at the entries in post 3, most of them contain the telephone dealing rates. I will make sure that they all have the telephone rates when I do the March update for this thread this weekend.

SS2