iWeb vs Halifax Share Dealing Costs

ValiantSon

Hi.

I wonder if someone could confirm a couple of points about the costs of using iWeb and Halifax Share Dealing.

1) iWeb costs £5 per trade. I assume - if buying units in (OIECs) funds - this means each time you purchase additional units whether in a fund you already own or a new fund?

2) Halifax costs £12.50 per trade, but they also offer regular investing at £2 per trade. Can this option be used to purchase units in (OIECs) funds?

If the above are correct, then am I right in thinking that owning a fund and purchasing additional units each month would cost as follows (ignoring initial cost purchase, which I assume would be £5 with iWeb and £12.50 with Halifax):

iWeb = £60 (12 x £5)?
Halifax = £24 (12 x £2)?

I'm looking at this for a S&S ISA that will have sufficient sums invested to make percentage based platforms quite expensive (even if I were to only invest in Vanguard funds on their own platform at 0.15%).

Thanks for your help.

Tom99

[FONT=Verdana, sans-serif]Yes you are correct, you can make a one off regular investment with Halifax for £2.

[/FONT] [FONT=Verdana, sans-serif]The only downside is that there are only 2 or 3 days a month when these deals are put through so you might have to wait a week by which time the price might have changed.

[/FONT] [FONT=Verdana, sans-serif]There is also the dividend reinvestment option which is 2% of £12.50 which ever is the less. That means if your dividends are over £100 each it is cheaper to reinvest them using the £2 regular saver.[/FONT]

Alexland

Alternatively depending on how much effort you want to go to, it might be better (and depending on the values) to hold your next year's ISA elsewhere on a percentage based platform? You don't want too much of your wealth in one place anyway.

ValiantSon

Thank you both for your replies.

The only downside is that there are only 2 or 3 days a month when these deals are put through so you might have to wait a week by which time the price might have changed.

I hadn't realised that the regular investment option with Halifax was only limited to certain days. That certainly adds another factor to consider.

There is also the dividend reinvestment option which is 2% of £12.50 which ever is the less. That means if your dividends are over £100 each it is cheaper to reinvest them using the £2 regular saver.

With accumulation funds that shouldn't be an issue because the dividend is reinvested in the fund by the fund manager, but it is certainly worth knowing for other investments.

Alternatively depending on how much effort you want to go to, it might be better (and depending on the values) to hold your next year's ISA elsewhere on a percentage based platform? You don't want too much of your wealth in one place anyway.

I'm guessing you've suggested this because of the risk of the ISA provider collapsing. Would that actually be an issue, because you have legal ownership of the shares in the fund, so isn't it more a concern that the fund provider collapses? If that were to happen then I would expect another provider to purchase the holdings. I'm happy to be corrected!

Once again, thank you both for taking your time to answer my questions. I appreciate it.

capital0ne

How about II was TD DirectInvesting
You pay £22.50/qtr
Trading £10
Regular Investment £1
Dividend Re-investment £1

The £22.50 will cover 22 re-investment or regular investments per quarter or 2 trades woth 50p to rollover for trading in the next quarter.

This may prove to be better value than iWeb or Halifax.

For me I'm sticking with II right now.

ValiantSon

Thanks for the suggestion. In my case I think they would work out more expensive due to the quarterly charge as I'm not going to be doing a lot of trading, so the effective £90 annual charge would be greater than the iWeb charges from trading. I'm really looking at 3 trades per quarter (occasionally a fourth might sneak in).

They do look like a potentially good platform if you do a lot of trading.

Alexland

ValiantSon wrote: »

I'm guessing you've suggested this because of the risk of the ISA provider collapsing. Would that actually be an issue, because you have legal ownership of the shares in the fund, so isn't it more a concern that the fund provider collapses? If that were to happen then I would expect another provider to purchase the holdings. I'm happy to be corrected!

Yes if the assets are still there I am sure another manager would buy the business from the administrators.

However in the case of fraud (on your account, across the platform or within the fund manager) you may need to fall back on the limited FSCS protection. It's a low probability high impact risk. There's a balance between low fees and covering your risks.

Alex.