Best platform?

Devenish

Hello,
My wife and I have about 150K GBP to invest across ISAs and General Investment accounts. Our research so far points to accessing the Fidelity Fundsnetwork via Cavendish Online which has a 0.05% advisor fee (although they don't offer advice), 0.20% platform fee and the fund AMC on top (typically 0.75%, I think) - thus about 1% charge in total. We have no experience of investing in this way other than having recently selected funds in Aviva's Stakeholder Pension offering via a broker. Given our limited experience, we need good customer service. Do you think our direction is reasonable or would you suggest a better platform or way of investing?
Thanks in advance.

Jane_B

We found The Share Centre the best option for us, with a similar value of savings to what you mentioned, they offer fixed fees which worked out cheaper than the percentage based ones when we were looking last year. We have an ISA, and a share account with them. Customer service wise they are great too, really helpful and everyone I have spoken too when calling up has been friendly. Their funds performed really well last year, which is what we hold most of our savings in at the moment.

TCA

Do you know what you want to invest in? i.e. which funds, shares, ETFs, investment trusts etc.... I'd decide this first before you choose a platform.

dunstonh

Our research so far points to accessing the Fidelity Fundsnetwork via Cavendish Online which has a 0.05% advisor fee (although they don't offer advice),

Its not a full wrap platform but a fund supermarket. It has out-of-date software (compared to others) and is clunky to use. You are effectively getting what you are not paying for.

and the fund AMC on top (typically 0.75%, I think) -

Remember that the AMC is obsolete. No-one goes by AMC any more. It is just there for legacy reasons. OCF is the measure.

We have no experience of investing in this way other than having recently selected funds in Aviva's Stakeholder Pension offering via a broker.

Aviva's plan is available at 0.4% all in. So, you are looking at doubling your charges.

Given our limited experience, we need good customer service. Do you think our direction is reasonable or would you suggest a better platform or way of investing?

You need to understand that Cavendish is a white labelled version of a fund supermarket that was originally built for advisers to use. However, its software hasn't kept pace and it's now a bit of an antique that advisers are not using it much. So, you are looking at a fund supermarket (rather than wrap platform) that is clunky, not very consumer friendly and rather basic. All the other fund supermarkets have gone to full platform status or are transiting this year. All the old ones stuck on legacy software are in the process of moving software. This year is seeing three of the big players move to FNZ software. Not Fidelity though.

Time for you to decide what value you put on functionality, quality and support. Do you want cheap quality and pay peanuts or do you want added quality?

BLB53

Do you think our direction is reasonable or would you suggest a better platform or way of investing?

With the sums you intend to invest I would suggest a flat fee broker such as Halifax Share Dealing would be the better option. They charge £12.50 p.a. so on £150K that is negligible compared to brokers who charge a percentage.

Here's an article on DIY Investor which may help
http://diyinvestoruk.blogspot.co.uk/2016/05/selecting-your-diy-online-broker.html

redux

TCA wrote: »

Do you know what you want to invest in? i.e. which funds, shares, ETFs, investment trusts etc.... I'd decide this first before you choose a platform.

I think this is relevant. Some might be expensive for funds, but good value for shares including investment trusts. Flat rates or percentages or a mixture, for initial purchase or regular savings including dividend reinvestment, any annual fee, all make some differences.

For instance I'm just looking at merging two pension funds, moving one or both. The annual admin/holding fees will save up to £300 (which if I can do it for 15 or 20 years will create about £300 pa income) and dealing charges on mainly investment trusts are broadly similar on my last 3 candidates.

ColdIron

Some platforms are cheaper for small sums, some cheaper for larger sums. Some are better for frequent trading others for long term buy and hold. Some are more cost effective for unit trusts, funds etc while others excel at investment trusts, company shares and ETFs. Some provide bags of information and hand holding for novice investors, others much less and more suited to horny handed investors with decades under their belt. You really need to clearly define your objective(s), find an investment or mixture of investments that satisfy your needs and then, and only then, find a platform that can best provide those investments and price may not the only metric. Choice of platform should be your last decision, not your first

Audaxer

BLB53 wrote: »

With the sums you intend to invest I would suggest a flat fee broker such as Halifax Share Dealing would be the better option. They charge £12.50 p.a. so on £150K that is negligible compared to brokers who charge a percentage.

Yes, if you have a large amount to invest like £150k, and planning doing very little trading (as each trade costs £12.50) Halifax Share Dealing is hard to beat.

If you are not an experienced investor, then investing in a low cost passive globally diversified multi asset fund like one of the Vanguard LifeStrategy range of funds (OCF 22%) or the HSBC Global Strategy range on funds (OCF 17%-21%) is worth considering. So added to the £12.50 platform charge for HSD, your total costs would be very low.

Bear in mind that each individual is only covered up to £50k by the Financial Services Compensation Scheme for both the platform and the fund house in the event of a major fraud affecting your investments. Although I have been reliably advised by other posters on here that the risk of this is very minimal, it is worth knowing if you are investing large sums.

ValiantSon

BLB53 wrote: »

With the sums you intend to invest I would suggest a flat fee broker such as Halifax Share Dealing would be the better option. They charge £12.50 p.a. so on £150K that is negligible compared to brokers who charge a percentage.

Here's an article on DIY Investor which may help
http://diyinvestoruk.blogspot.co.uk/2016/05/selecting-your-diy-online-broker.html

I'd agree that flat fee is probably better on those sums of money than a per centage platform, but Halifax might not be the best option. iWeb is cheaper than Halifax and is, in effect, the same platform with a different colour scheme. Halifax charges £12.50 for each trade, whereas iWeb charges £5. There is a £25 opening fee with iWeb, but that could quite quickly be offset by the significantly cheaper trading fees.

Compare platforms here: http://monevator.com/compare-uk-cheapest-online-brokers/

(Other comparisons are available, but I prefer this one as it allows you to see all the charges and work out what is best for you, rather than relying on someone else's assumptions).

Jane_B wrote: »

We found The Share Centre the best option for us, with a similar value of savings to what you mentioned, they offer fixed fees which worked out cheaper than the percentage based ones when we were looking last year.

The Share Centre have an unusual mixed fees model. They charge a per centage on trades, subject to a minimum fee. Depending on how much you are investing at any given time this could work out in your favour or against. The fees are 1% or £7.50 minimum on trades under £750, plus a £1.80 per month fee (£21.60 per year). If somebody invested £10,000 with them, for example, it would cost £100 for that trade! That is extortionate!

TCA wrote: »

Do you know what you want to invest in? i.e. which funds, shares, ETFs, investment trusts etc.... I'd decide this first before you choose a platform.

Agreed. Before deciding on the platform you need to decide on what you are actually going to invest in. The MSE article directs people to find a platform and then find their investments, but this is very flawed (it really isn't a particularly good article). The most important thing is finding your investments and then looking for where you can hold those investments at the best price (factoring in any perceived customer service benefits).

rathernot

iWEB are almost certainly the cheapest if they have the investments you want.

If you're investing in a dozen funds every single month that will very quickly shift to a fee based platform.

Alliance Trust also look decent as fixed fee platforms go but again the number of trades makes a big difference.

Glen_Clark

Good place to start is the best buy page of this website: https://www.moneysavingexpert.com/savings/cheap-online-sharedealing?_ga=2.14774326.1017526747.1498207934-1345294851.1496851258