Platform fees

2016Convert

Hi there

Thanks for contributing to the board and invaluable advice for a start.

I've got £40k sitting unnvested in a Barclays Smart Investor account(clueless financially wise.But I have used the Stocks and Shares ISA amount for the past 2 tax years). I've done nothing with it as I purely don't know what to do. So, thinking of handing it over to AJ Bell, Vangard or Hargreaves Lansdowne to manage.

What confuses me is the impetus on the platform fees of 0.45etc and Hargraves Lansdowne being expensive and Vangard cheaper. Hargreaves Lansdowne have better past performances(in managed portfolios) than Vangard and AJ Bell so would this not negate the fees? I'm aware I can't go off past performance and I am looking to invest this money and not touch it for at least 20 years(with another £20k in April to go with it so £60k in total) so looking at long term investment and growth and not income.

Any advice and explanation welcome.

Thanks

Lokolo

HL and AJ Bell have a larger investment range than Vanguard. They also charge more, although I think AJ Bell will be cheaper than HL for you.

To say that HL have better past performance isn't something you can say. HL are like a supermarket, that offers branded products. Some of these products are better than others, some are in a different category. So yes, some can negate the higher fees.

Vanguard offer only Vanguard products (a bit like M&S/Waitrose/Aldi only offering own brand). They are cheap and basic.

If you are happy to invest in products that can potentially beat the market (Active funds), then Vanguard are not a choice for you. However, if you are happy to just invest in the market, Vanguard is good and cheap (Passive (tracker) funds)

HCIMbtw

I probably won't!use the right terms here but you have a platform fee and a fund fee, both eat into your potential gains. The fund fee wont change based on the platform you use, but the platform fee is variable dependent on who you have an account with and how much you hold.!

IWeb will be one to consider in your scenario, you pay £25 to set up the account and then £5 per trade into funds with no ongoing platform fee. If you were for example looking!at moving the £40,000 in two lump sums into S&S ISA and a passive fund (2 payments of!20,000 in different tax years) then this would likely work out better than other options,!£35 upfront no ongoing platform fee.!

If you are wanting to break down £20,000/£40,000 into multiple funds through many small trades, e.g. £4,000 in this vanguard fund, £4,000 in this HSBC fund, then IWeb might not make much sense, but for one or two passive trackers it is about the most economical.!

There is a large selection of funds so worth looking at..!

I've not been saving long at all, I just use vanguard for monthly direct debits!as the platform cost is so low, if/once i've built up £20k plus i'd plan to transfer to IWeb if platform fee's operate the way they do now.!!

SonOf

What confuses me is the impetus on the platform fees of 0.45etc and Hargraves Lansdowne being expensive and Vangard cheaper.

The average whole of market platform charge is under 0.30% nowadays. So, HL is expensive.

Restricted providers/platforms are often cheaper as there are limitations. You would nearly always buy a whole of market option ahead of a restricted option if they were the same price.

Hargreaves Lansdowne have better past performances(in managed portfolios)

Performance doesnt come into play with platforms. They are administrators. Not investment houses.

Audaxer

As you are making two lump sum payments and leaving it for 20 years, you would be better putting the £60k in a fixed fee platform and in a low cost world tracker or a low cost globally diversified multi asset fund. For example Halifax Share Dealing only charge a platform fee of £12.50 a year for an S&S ISA, irrespective of the value. You would also pay £12.50 for each of your two trades.

quirkydeptless

Audaxer wrote: »

As you are making two lump sum payments and leaving it for 20 years, you would be better putting the £60k in a fixed fee platform and in a low cost world tracker or a low cost globally diversified multi asset fund. For example Halifax Share Dealing only charge a platform fee of £12.50 a year for an S&S ISA, irrespective of the value. You would also pay £12.50 for each of your two trades.

iWeb is run by Halifax, but free to hold and £5 to trade, so once you've paid the £25 to open it what is the Halifax platform offering that's better for the extra cost after two years?

juststuff123

"I've done nothing with it as I purely don't know what to do. So, thinking of handing it over to AJ Bell, Vangard or Hargreaves Lansdowne to manage."

Can't work out how to do quotes!

None of these platforms manage your money for you. You still have to decide what funds or stocks you want to purchase, when and how much.

If you really are hopelessly stuck, perhaps an IFA would be a better route? They will be able to give you guidance.

Audaxer

quirkydeptless wrote: »

iWeb is run by Halifax, but free to hold and £5 to trade, so once you've paid the £25 to open it what is the Halifax platform offering that's better for the extra cost after two years?

I was just pointing out that a better platform for the OP would be a flat fee platform and in my view Halifax Share Dealing is good option. I agree that iWeb is another option the OP could consider in view of the costs. I've read that the iWeb platform is pretty basic but I've also read a lot of investors are perfectly happy with it.

2016Convert

Thanks for all the replies. I have a SIPP that was sorted through a FA and thats going into Old Mutual Wealth. I just wanted a alternative to that some will probably seek another FA to sort out.

Thanks

SonOf

I have a SIPP that was sorted through a FA and thats going into Old Mutual Wealth.

You should not use an FA. OMW, which is a personal pension, not SIPP, was once a good platform with cutting edge software. Now it is long in the tooth and its pricing is not competitive with other IFA options. It is mostly used by FAs now (not IFAs) as its owned by a company with its own salesforce.

OMW is still cheaper than HL but it no longer competitive with the other major intermediary advised platforms.

will probably seek another FA to sort out.

make sure its an IFA. Not an FA.