What are your S&S ISA charges?

System

The original question did not actually ask for the name of the broker, but it might be useful to know!

jdw2000

Any advice on whether or not I'd be better off with a fixed-fee broker?

TD will charge 0.5% for my £50K SIPP, which is is £250 pa (this is possibly capped at £200, I need to check). And 0.3% for each of my £35K ISA and the £10K unsheltered investment, which is £135pa. All-in-all, £385 per year.

Would I be better off with a fixed-fee platform? I had a look at a price-comparison table and I couldn't make head nor tail of it...

For example, do fixed-fee brokers charge one fee for all your accounts within it (ISA, SIPP, unsheltered), or do they charge their fixed fee for each account?

BLB53

I have £30K in S&S ISA with Halifax Share Deal who charge me £12.50 p.a. which is a platform fee of 0.04%. I am invested in Vanguard LS 60 fund which has charges of 0.24% so total costs of investing are 0.28%

jdw2000

jdw2000 wrote: »

Any advice on whether or not I'd be better off with a fixed-fee broker?

TD will charge 0.5% for my £50K SIPP, which is is £250 pa (this is possibly capped at £200, I need to check). And 0.3% for each of my £35K ISA and the £10K unsheltered investment, which is £135pa. All-in-all, £385 per year.

Would I be better off with a fixed-fee platform? I had a look at a price-comparison table and I couldn't make head nor tail of it...

For example, do fixed-fee brokers charge one fee for all your accounts within it (ISA, SIPP, unsheltered), or do they charge their fixed fee for each account?

Just phoned up TD to clarify. The pension fee is indeed capped at £200 per year. But they do add VAT on all the charges.

So, in short, for a £50K SIPP, and £45K ISA/trading (all in Vanguard funds) I will be looking at £402 per year.

That does seem pricey?

bowlhead99

jdw2000 wrote: »

Just phoned up TD to clarify. The pension fee is indeed capped at £200 per year. But they do add VAT on all the charges.

So, in short, for a £50K SIPP, and £45K ISA/trading (all in Vanguard funds) I will be looking at £402 per year.

That does seem pricey?

Sounds to me like you would be paying the 0.3% custody fee, which does NOT attract VAT, on all £95k worth of Vanguard funds (50k in SIPP, and 45k across the other two accounts): £285
And then the SIPP fee of £200/yr plus VAT: £250.

I make that £535 unless I'm missing something.

I use TD for one of my ISAs and unwrapped accounts and have done for years (don't have a massive lot of 'funds' with them, more shares and ITs). However, when I was opening a SIPP I noticed that AJ Bell was the pension scheme administrator in the background; if you go over to Youinvest which is AJ Bell's own front-end you will get the SIPP services cheaper, which is what I did about 4 years ago.

Youinvest rejigged their fees recently which resulted in removal of some caps and led to increases for a number of investors, in some cases quite large. However they got rid of their separate annual SIPP fee so on a SIPP or ISA you just pay the platform fee of 0.25% to hold your Vanguard funds and that's it. Well, except for a transaction fee each time you buy or sell, but that's only £1.50 a time for buying funds and you are not going to have many of them each year. So your fees would reduce by more than half from the TD level.

So, although I'm a fan of TD for their sharedealing, if you are only holding funds (rather than shares and ITs and ETFs which don't attract the same fund platform fees) it makes sense to look for a lower fee provider if you can. TD also got bought recently by the owners of iii; and iii have a different pricing structure and it remains to be seen the extent to which they would migrate one group of customers to the other pricing structure or vice versa. If they did change the structure you would be able to exit but it might be an annoyance to go down the beauty parade of providers all over again.

If you want to use Youinvest and have a decent amount to transfer to them, you can look on the referrals board and find someone to introduce you as a 'friend' and split the referral fee with you. But don't let some one-off joining bonus influence your decision of where to go. You might find you can save money by going somewhere that is entirely fixed periodic fee plus transaction fee and not percentage based.

jdw2000

bowlhead99 wrote: »

Sounds to me like you would be paying the 0.3% custody fee, which does NOT attract VAT, on all £95k worth of Vanguard funds (50k in SIPP, and 45k across the other two accounts): £285
And then the SIPP fee of £200/yr plus VAT: £250.

I make that £535 unless I'm missing something.

I use TD for one of my ISAs and unwrapped accounts and have done for years (don't have a massive lot of 'funds' with them, more shares and ITs). However, when I was opening a SIPP I noticed that AJ Bell was the pension scheme administrator in the background; if you go over to Youinvest which is AJ Bell's own front-end you will get the SIPP services cheaper, which is what I did about 4 years ago.

Youinvest rejigged their fees recently which resulted in removal of some caps and led to increases for a number of investors, in some cases quite large. However they got rid of their separate annual SIPP fee so on a SIPP or ISA you just pay the platform fee of 0.25% to hold your Vanguard funds and that's it. Well, except for a transaction fee each time you buy or sell, but that's only £1.50 a time for buying funds and you are not going to have many of them each year. So your fees would reduce by more than half from the TD level.

So, although I'm a fan of TD for their sharedealing, if you are only holding funds (rather than shares and ITs and ETFs which don't attract the same fund platform fees) it makes sense to look for a lower fee provider if you can. TD also got bought recently by the owners of iii; and iii have a different pricing structure and it remains to be seen the extent to which they would migrate one group of customers to the other pricing structure or vice versa. If they did change the structure you would be able to exit but it might be an annoyance to go down the beauty parade of providers all over again.

If you want to use Youinvest and have a decent amount to transfer to them, you can look on the referrals board and find someone to introduce you as a 'friend' and split the referral fee with you. But don't let some one-off joining bonus influence your decision of where to go. You might find you can save money by going somewhere that is entirely fixed periodic fee plus transaction fee and not percentage based.

Well, you know TD's fees better than they do. I just called them back up, and it was only because you told me the correct questions to ask that I got to the bottom of what their fees are what attracts VAT and what doesn't. So yes, £535 per year. Thank you very much for clarifying that.


I guess what I have to consider is:

- Part of the appeal for me was having everything (ISA, SIPP and trading account) in one place. TD can do that (albeit with the SIPP linked-in from AJ Bell's site).

- Part of the appeal of VLS was the avoidance of trading fees. But you apparently get hit with that anyway via the 0.3% pa fund charge. ce la vie.

- Is £535 expensive compared to what I'd get elsewhere? Or is it actually quite par-for-the-course for what I am getting and the level of investments I am at? I guess some people on here can share what they think, and other than that it's a case of shopping around.

bowlhead99

jdw2000 wrote: »

- Part of the appeal for me was having everything (ISA, SIPP and trading account) in one place. TD can do that (albeit with the SIPP linked-in from AJ Bell's site).

The TD SIPP service uses AJB's admin people in the background, effectively 'white labeling' a decent pension trustee service for other groups such as TD. However, you still use the TD front end for all your buying and selling.

Yes, it is good to use a provider that can do unwrapped, ISA and SIPP all in one place. Most mainstream platform providers do this. Some niche bargain basement specialists with a focus on cost or a particular type of customer, do not (for example, x-o.co.uk does sharetrading and ISAs but not SIPPs and does not let you hold funds or foreign shares).

However, having a single login is not worth £100 a year on your costs (at least, not to me), so don't be afraid to split it.

- Part of the appeal of VLS was the avoidance of trading fees. But you apparently get hit with that anyway via the 0.3% pa fund charge. ce la vie.

c'est, indeed, la vie.

Effectively holding an OEIC or unit trust (a "fund") means you are not buying or selling on a stockmarket in real time, you just need to be able to access a fund platform to maintain an account to hold your interest in the fund on an ongoing basis and to process subscription or redemption requests and distributions and reporting etc.

So, a number of providers just offer that by charging a percentage fee which on the amounts you're talking about would be 0.25-0.45% from most of them, and call it a platform fee or custody fee. Alternatively, they can price on the same sort of model as a traditional stockbroker with some fixed level of fee to run the account (which might include a certain number of trades a year) and then a charge each time you actually want to do something like buy or sell.

- Is £535 expensive compared to what I'd get elsewhere? Or is it actually quite par-for-the-course for what I am getting and the level of investments I am at?

Well, if you did the maths on the Youinvest charges you would get 0.25% x £95k which is a smidge under £250, plus a few £1.50 dealing charges, and no fixed SIPP charge. So clearly £535 is relatively expensive compared to at least that one rival, for your level of assets. The driver of it is mainly the fact you want a SIPP and a SIPP is a higher level of cost and work for a provider than a simple unwrapped account or ISA.

Some providers have started letting you have a SIPP for 'free' but there are not many - for example AJBell as mentioned via Youinvest (AJBell have a big pension operation and are keen to have people use their own front end so that they earn platform fees and transaction fees); or someone like Hargreaves Lansdown can give you a SIPP for 'free' because they are the most expensive place in town in terms of ongoing platform fees you would be paying for holding your funds (at 0.45%, which will reach eye watering levels as your portfolio grows).

Having fees that are percentage based is less ideal if you have lots of assets. With almost £100k for example it can be a lot of money but you don't have enough to qualify for a lower percentage (e.g. the percentage based providers usually only lower the percentage after £250k). So it can be worth using a fixed-fee base provider instead.

Example of a cheapish one is iweb, http://www.iweb-sharedealing.co.uk/products/self-invested-personal-pension.asp

With them, you pay a fee to establish each account and then a fee for every buy or sell. So that's two big upfront fees for the ISA and unwrapped accounts but then cheap thereafter. For the SIPP they waive the account setup fee but as mentioned, most companies have a big account fee for a SIPP and iweb are no different; £45 a quarter. But then cheap thereafter as you only have trading fees for each transaction and not percentage-based platform fees. I don't use them and relatively few people on here seem to use them for SIPPs, but they are popular for ISAs. They are owned by Halifax but it is separate branding and pricing from the Halifax Sharedealing service.

I guess some people on here can share what they think, and other than that it's a case of shopping around.

A quirky guide updated each year is from Langcat: http://www.langcatfinancial.co.uk/white-paper/directplatformguide2016/ otherwise there is a DIY platform comparison table on the Monevator blog which gets linked here several times a week. Use comparison tools as a jumping off point for visiting the actual provider websites and checking the small print of the ones that sound good because there is only so much nitty gritty that can be fitted into a table or comparison chart. And if you have those 3 separate types of account you want, don't eliminate the choice of using 2 or more providers to lower the overall fee.

Note that fees aren't everything, with some providers you are also paying for service quality rather than bare bones basic admin, and having everything in one place is convenient.

jdw2000

So with fixed-rate brokers you pay their fixed rate for each account... ie, if their fixed rate is £80, you'd pay £160 for an ISA and trading account?

And if you want to add a SIPP you'd pay the £80 plus whatever else they charge?

Inclusive of vat?

bowlhead99

jdw2000 wrote: »

So with fixed-rate brokers you pay their fixed rate for each account... ie, if their fixed rate is £80, you'd pay £160 for an ISA and trading account?

And if you want to add a SIPP you'd pay the £80 plus whatever else they charge?

The 'fixed rate' might be different for each type of account. For example the iweb one I mentioned has a rate of £0 a year for a normal or ISA account but a capped fee each year for a SIPP account. But they have a one-off account setup fee that they charge on the normal or unwrapped accounts and waive for their SIPP accounts.

Another provider might have a totally different fee for each product. Another one might waive a fee on a particular account if you had another account. Another one might have a fee that they waive if you are making ongoing contributions and a certain number of trades per year, which you might do on one of your accounts but not on the other.

Really you just have to read the fees and see what fees are applicable to the accounts that you want for the transactions you want to do. For example, if you are age 30 it doesn't really matter if they have a fixed or a variable fee for a SIPP in drawdown because your SIPP is not going to be in drawdown for almost three decades and if you don't like the fees at that point you will be moving.

So, look at the relevant fees, and once you think you understand them, check that you really do by reading them another time.

Inclusive of vat?

It should say. If it doesn't say +VAT, it's probably included or exempt.

Things that are charged as a percent of an account value will be vat inclusive or vat exempt because nobody wants to calculate a fee as a percentage and then have to multiply it by 1.2 again.

jdw2000

Thanks very much for all that. I am starting to get my head around it now. It really is not very intuitive (for me at least).

I think with TD, at the level of investments I am at, I am not in the worse place right now whilst I research where I need to be. I will thoroughly look at the different options because it is a hassle having to move.

But then again, what's to stop any of them changing their fees at any point? And as you mention, TD/iii are likely to be making changes anyway due to their merger so who knows what each of them will do. Is there a time-frame known for this?

iWeb do look very interesting, so that's a great heads-up, thank you. They look cheap and cheerful for someone like me who will just plonk some funds in and leave them alone for a number of years. I will make iWeb the first one I properly look at.

Having looked at the figures of a few others, TD might be a bit pricey, but it's not like I'm getting shafted either as things stand. And their website and app are quite good.