TD regular investment ISA charges.

pitza

I have just set up a reg investment stocks & shares ISA with TD direct
consisting of 8 low cost index funds and I will be charged an estimated consideration of £1.50 commission plus 25p stampduty per fund if I invest £50 per month per fund, is this right? because written on Motevator as I understand it TD Funds are free from trading fees (quote -No fund trading fees Unit Trusts and OEICs (i.e. all index funds) trade gratis.
Exchange Traded Funds (ETFs) trade at £12.50, or can be bought for £1.50 through the regular investment scheme.)

dunstonh

I have just set up a reg investment stocks & shares ISA with TD direct
consisting of 8 low cost index funds and I will be charged an estimated consideration of £1.50 commission plus 25p stampduty per fund if I invest £50 per month per fund, is this right?

Thats expensive.

Can you verify that you are buying UT/OEICs or ETFs?

bowlhead99

pitza wrote: »

I have just set up a reg investment stocks & shares ISA with TD direct
consisting of 8 low cost index funds and I will be charged an estimated consideration of £1.50 commission plus 25p stampduty per fund if I invest £50 per month per fund, is this right?

Doesn't sound right to me. I bought some Vanguard and some HSBC "C" Funds a month or so ago, and TD took nothing in commission or duty off the amount I wanted to invest, I got the exact amount of units expected. This was just in my normal account (don't have a monthly regular account), but the trading charges work on the same principles so far as I can see.

Per the TD site
How much does Regular Investing cost?

Commission is just £1.50 per trade when you buy stocks. Funds do not incur commission but there may be a Fund Manager charge, which is a percentage of the value of your investment. This can differ depending on the fund

So TD take nothing directly from you for your fund investments, and the fund manager takes his own charges (some funds have an up-front charge, others are just 0.2% or whatever annually out of the fund's assets)

So who estimated the "estimated considerations" for you, that you quoted?

because written on Motevator as I understand it TD Funds are free from trading fees

Monevator's explanation is in line with the TD website I linked.

As Dunstonh suggests, are the 8 investments you picked, actually ETFs (exchange traded funds) where TD buy and sell them on the stock exchange for you? Yes you do get trading fees and perhaps duty with those. So while you can deal in them for a discounted rate of £1.50 by committing to buy regularly, it's still relatively expensive on a £50 investment.

When people talk about investing in low cost tracker funds they usually mean funds selected from the 'UK Funds' drop-down on the TD buy/sell screens (like HSBC trackers, Vanguard trackers, Vanguard Lifestrategy fund-of-funds, etc). These are currently free to deal at TD. It's just stuff bought through the UK stocks or equities options (including ETFs and investment trusts) which will cost you dealing fees.

pitza

Been in touch with TD and they say its a mistake, I will not be charged!

pitza

TD update: Had a call this morning from TD to say that I will be charged £1.50 per fund even though my funds are all index trackers ( ie HSBC all share index GB0000438233), L&G Global Emerging Markets GB 00B4MBFN60 ) but there is no stampduty to pay and I do not have to trade every month so I can top up my account and trade each quarter. Is this still expensive if I trade £750 each Quarter?

bowlhead99

The way I would think of it would be you're paying a one-time fee of 1.50 for each investment, so if you keep each purchase above £150 each it has only cost you a one-time fee of a percent.

Paying a percent once on all new money and then between 0.2%-1% a year in management fees thereafter, still compares favourably to paying nil up front and then 1-1.5% on more active funds after a bit of rebate.

It originally sounded like you were going to be putting 50 a month into 8 funds so you'd be doing 400 a month or 1200 a quarter. If you're now actually only doing 750 a quarter the £1.50 deal fees will of course feel relatively higher if you split the 750 into 8 small investments of 93.75, than if you split it into 5 investments of 150 and rotate which ones are taking the new money from time to time.

If you do the 5 new trades a quarter and prices don't change (and you don't even make a penny of growth), at end of year 1 you will have done 20 trades in the year for total cost of £30 on £3000 of investment, next year paying £30 on £6000 of investment, year after charge is £30 on £9000 of holdings and so on.

It would be nice if you could avoid fees altogether but you could do much worse than £30.

ccbrowning

HL charges £2/mo for those same funds... This fee is at odds with the monevator article, too - are the no fees just something that start from February or is monevator wrong?

innovate

The TD site says (with my colouring)

Commission is just £1.50 per trade when you buy stocks. Funds do not incur commission but there may be a Fund Manager charge, which is a percentage of the value of your investment. This can differ depending on the fund.

http://www.tddirectinvesting.co.uk/choose-an-account/trading-isa/regular-investing/

Presumably you need to check each fund for a Fund Manager charge.

bowlhead99

pitza wrote: »

TD update: Had a call this morning from TD to say that I will be charged £1.50 per fund even though my funds are all index trackers ( ie HSBC all share index GB0000438233), L&G Global Emerging Markets GB 00B4MBFN60 ) but there is no stampduty to pay and I do not have to trade every month so I can top up my account and trade each quarter. Is this still expensive if I trade £750 each Quarter?

Would be grateful if you could update us if/when you actually put your trades through and let us know whether they took the 1.50 charge or not. All the guidance on the website is that Funds are free to purchase (whether regular investment or 'normal') and I have bought HSBC C class and Vanguard on the non-regular- investment version of the accounts within the last month, and did not pay any kind of trading fee from TD, and did not suffer any initial % fee from HSBC.

As Monevator has picked up on their generous structure and done a whole article on using TD for low cost regular investing, after it was noticed by people here (including myself), it would be a shame if it is not true in reality!

As Innovate says there will be some funds you might like to purchase monthly investing which do effectively cost you some sort of fee (because of the initial manager charges - the vanguard UK fund is one of these with its half percent for stamp or dilution levy), but this wouldn't always come out at exactly 1.50 on a 150 investment and wouldn't be the same on all your 8 funds. I suspect (hope;)) there may have been some miscommunication between you and TD

pitza

TD phoned me again yesterday to confirm that there will be no charge for my 8 funds even though they show up in the regular investments set up page with charges, this is a mistake in the system which they will correct.

ccbrowning

Thanks for the update.

I'm definitely considering moving my HL investments over to them. I'm currently on a Vanguard fund which has £2/mo fee and then two BlackRock funds which have a .57 TER. I could save the platform fee money and also move to some lower TER funds to replace my BlackRock ones...