iWeb's Dividend Reinvestment Fee

RolandFlagg

"Dividend reinvestment purchases are charged at 2% of the dividend value, and capped at a maximum of £5 per stock."

I take it that if I buy Vanguard or iShares ETFS that accumulate the dividends within the ETF and do not distribute, then this fee does not apply?

Thanks.

Alistair31

You are correct

underground99

RolandFlagg said:

"Dividend reinvestment purchases are charged at 2% of the dividend value, and capped at a maximum of £5 per stock."

I take it that if I buy Vanguard or iShares ETFS that accumulate the dividends within the ETF and do not distribute, then this fee does not apply?

Thanks.

If the funds are accumulation versions that don't distribute to your IWeb account, then IWeb don't have any money to reinvest for you, so there's no way they could charge you a fee for providing a reinvestment service.

RolandFlagg

Thanks.
They work out cheaper than Vanguard's own platform then, who have a 0.15% platform fee (as long as you keep dealing at iWeb to a minimum).

Alexland

Yes with a big enough account valuation then iWeb can be cheaper once you have mentally written off the setup charge. Vanguard's platform fees are more suited to small accounts. 

underground99

RolandFlagg said:

Thanks.
They work out cheaper than Vanguard's own platform then, who have a 0.15% platform fee (as long as you keep dealing at iWeb to a minimum).

True, all of the platform comparison stuff just depends on how much you have and how many times a year you might buy or sell.

For a £20k investor, the 0.15% a year at vanguard is £30 which would pay for a trade every other month at IWeb (albeit, after the initial account opening fee which equates to several years' annual fees so couldn't be ignored by someone who doesn't already have an account).

And the Vanguard one would go up over time as the balance grows, and would restrict you to only using Vanguard products, so would become less attractive as your holdings grow. If you were starting with £100k, IWeb would be a more compelling offer; while in the £1k- £10k range it probably wouldn't.