Cost of S&S ISA on the Vanguard platform versus iWeb

FinancialIdiot

Were I to put £30000 into an S&S ISA by transferring from an existing cash ISA, and to choose just the VLS60 fund (portfolio) and then hold it for maybe 10 - 15 years (or longer if necessary to try to achieve a reasonable return), is it correct that choosing iWeb as the platform would make more sense than using the Vanguard platform?

With Vanguard it seems I would pay the ongoing 0.15% pa platform charge and the ongoing fund charge (0.22% pa) and nothing else.

With iWeb I would pay the one-off £25 charge when opening the ISA and the ongoing fund charge (0.22% pa) plus a one-off £5 charge to obtain my chosen fund (VLS60)(?) and nothing else after that (so iWeb would make only £30 from me or £55 if also taking account of the £25 transfer out charge)? I must surely be misunderstanding something about what iWeb would charge?

ColdIron

No misunderstanding, from a purely platform cost PoV IWeb are good for a lump sum buy and hold ISA. If you make a single purchase it would be £25 + £5 in the first year, nothing during intervening years and £5 to sell. Ignoring growth, a fund with Vanguard Investor would be £45 every year and nothing to sell. If the value of your fund were to double it would cost ~ £90 pa and still £0 with IWeb

The OCF is the same regardless who you hold it with so you can eliminate it when making platform comparisons

[Deleted User]

Via Snowmans' excellent spreadsheet. 30,000 into one fund into an ISA and no dealing year on year. You don't physically pay the ongoing fund charge separately, that's included in the valuation. (EDIT - to change incorrect assumption on fund size)

csgohan4

Iweb is a good punt, will eventually get my SIPP through them when I am ready, no frill service, good if you know what your doing,  Shame thy don't offer LISA

FinancialIdiot

Deleted_User said:

... 300,000 into one fund ...

Oh, if only. Sadly I'm not that intelligent (or lucky or criminally successful). Thanks for drawing my attention to the spreadsheet, though. Also thanks to other posters.

I'm suspicious now that iWeb sounds too good to be true - is there nothing simple about investing?

ColdIron

IWeb have a different charging structure for SIPPs. £90 or £180 pa plus dealing costs. There is an additional £180 annual charge when you take an income via Flexi-access drawdown. In some circumstances this is easily beaten by people like Hargreaves Lansdown with no drawdown charges and a £200 cap for investment trusts and ETFs. Horses for courses

https://www.iweb-sharedealing.co.uk/charges-and-interest-rates/sipp-charges.asp

FinancialIdiot

ColdIron said:

IWeb have a different charging structure for SIPPs. £90 or £180 pa plus dealing costs. There is an additional £180 annual charge when you take an income via Flexi-access drawdown. In some circumstances this is easily beaten by people like Hargreaves Lansdown with no drawdown charges and a £200 cap for investment trusts and ETFs. Horses for courses

https://www.iweb-sharedealing.co.uk/charges-and-interest-rates/sipp-charges.asp

Thanks for drawing my attention to this (though I guess it's also for csgohan4). A personal pension is the next (but one) difficulty I've got to deal with (and maybe not via iWeb).

csgohan4

ColdIron said:

IWeb have a different charging structure for SIPPs. £90 or £180 pa plus dealing costs. There is an additional £180 annual charge when you take an income via Flexi-access drawdown. In some circumstances this is easily beaten by people like Hargreaves Lansdown with no drawdown charges and a £200 cap for investment trusts and ETFs. Horses for courses

https://www.iweb-sharedealing.co.uk/charges-and-interest-rates/sipp-charges.asp

Drawdowns are one aspect but to lose 0.45% of your pension a year via  HL  is eye watering, unless you have purely ETF's in your portfolio which is another discussion
https://www.hl.co.uk/pensions/sipp/charges-and-interest-rates

Indeed alot of the providers provide discounts for ETF and IT holders. Do they provide more commission to the platform or easier to maintain for them?

milton1970

Did I read somewhere that iWeb use AJ Bell for SIPP management/administration? Maybe explains the annual fees ?

eskbanker

milton1970 said:

Did I read somewhere that iWeb use AJ Bell for SIPP management/administration?

Yes, https://www.iweb-sharedealing.co.uk/products/self-invested-personal-pension.asp

Our SIPP is provided by AJ Bell, one of the leading pension providers in the UK.

ColdIron

csgohan4 said:

ColdIron said:

IWeb have a different charging structure for SIPPs. £90 or £180 pa plus dealing costs. There is an additional £180 annual charge when you take an income via Flexi-access drawdown. In some circumstances this is easily beaten by people like Hargreaves Lansdown with no drawdown charges and a £200 cap for investment trusts and ETFs. Horses for courses

https://www.iweb-sharedealing.co.uk/charges-and-interest-rates/sipp-charges.asp

Drawdowns are one aspect but to lose 0.45% of your pension a year via  HL  is eye watering, unless you have purely ETF's in your portfolio which is another discussion
https://www.hl.co.uk/pensions/sipp/charges-and-interest-rates

Which is why I said 'in some circumstances' and 'Horses for courses'. If you choose to use their most expensive option it's going to cost you more. My drawdown SIPP with HL is predominantly ITs and an ETF and I consider it very good value. My income GIA, also with HL, is 100% ITs and at £0 pa is about as good as it gets. I use IWeb for my growth funds GIA/ISA which only costs a handful of fivers dealing costs when I do my annual bed and ISA. If you will allow me another adage: you cut your coat according to your cloth

Indeed alot of the providers provide discounts for ETF and IT holders. Do they provide more commission to the platform or easier to maintain for them?

Commission has been illegal since the Retail Distribution Review. As ITs and ETFs are exchange traded instruments (much like company shares) there is no mechanism for them to provide a cheaper ongoing charge or share class to platforms as happens with funds