Comparison platform charges-Vanguard/IWEB

Tom99

jimjames wrote: »

There is no 0.5% transaction cost, it's a fixed £5.

Year 2 onwards have no fees other than the fund costs

I think the reference to 0.5% transaction cost is that £5 is 0.5% or £1,000, the amount invested in each fund in the example.

Alexland

Tom99 wrote: »

I think the reference to 0.5% transaction cost is that £5 is 0.5% or £1,000, the amount invested in each fund in the example.

The way it's laid out at the top of page 2 on their PDF (with the Farouk Fund Fan example on the last page) the 0.5% is a fund transaction cost perhaps assuming a fund manager that churns the portfolio, invests in illiquid markets or those with high transaction costs such as property. With a Vanguard fund it's unlikely to be anywhere near that high.

https://www.iweb-sharedealing.co.uk/PDFs/CostsAndCharges.pdf

badger09

lindabea wrote: »

Thank you Alexland. So it looks like the example that IWEB give on their website is misleading- perhaps even doing them an injustice by saying that the total charge is £86.00. In fact, the actual cost to an investor after the initial charge is £5.00 for each additional 20K to an ISA. This makes a big difference when compared to the ongoing charge of 0.15% with Vanguard especially as the charge will be on any growth as well as the capital invested.

Thank you very much for putting all this into perspective.

I agree. That example is not helpful.

As the Vanguard platform only offers Vanguard funds, you can ignore the fund charges, as they will be identical whether you hold on Vanguard or IWEB.

So what you are comparing is Vanguard's 0.15% annual platform charge and IWEB's one off account £25 opening fee and £5 transaction charge every time you trade.

If you lump sum invest your annual £20k ISA allowance, then IWEB will cost £30 in year 1, £5 in year 2, £5 in year 3 etc

If you're drip feeding your annual £20k, Vanguard will cost £30 in year 1, £60 in year 2, £90 in year 3 etc (ignoring any rise in value (or fall;)):

If you want to drip feed, the cheapest way would be to use Vanguard for year 1, then after the end of the tax year, transfer to IWEB. Again, use Vanguard in year 2 and transfer to IWEB after the end of the tax year. Rinse and repeat:)

Alexland

badger09 wrote: »

If you want to drip feed, the cheapest way would be to use Vanguard for year 1, then after the end of the tax year, transfer to IWEB. Again, use Vanguard in year 2 and transfer to IWEB after the end of the tax year. Rinse and repeat:)

Or just use Halifax Share Dealing at £12.50 pa for an ISA plus £2 per regular/scheduled trade.

Alex