Cheapest platform for Vanguard LifeStrategy funds

eskbanker

dales1 said:

masonic said:

iWeb charges no custody fee at all, so if you don't trade, you'd pay nothing to iWeb.

After this morning's posts, I was considering moving from Hx Sharedealing to iWeb (now with no opening fee).

And I downloaded iWeb's costsandcharges.pdf today.

This states that "Ethan the ETF investor" (like me) will pay 0.2% ongoing charge plus 0.5% transaction charge [on top of the £5 dealing commission].

So it appears to me that iWeb do charge a custody fee (plus a horrid transaction charge).

(I'm sorry if i've misunderstood).

That's a particularly poorly-worded document, and conceals the fact that the ongoing and transaction charges are costed within the fund manager's operations, and aren't payable to the platform, so the only charge you actually pay to IWeb in the quoted scenario is the £5 dealing charge for the purchase.  Both of the other figures are purely notional ones and will vary widely according to choice of fund, but for any given fund they'll be the same regardless of platform choice, i.e. they aren't a differentiator when evaluating platform costs....

masonic

dales1 said:

masonic said:

iWeb charges no custody fee at all, so if you don't trade, you'd pay nothing to iWeb.

After this morning's posts, I was considering moving from Hx Sharedealing to iWeb (now with no opening fee).

And I downloaded iWeb's costsandcharges.pdf today.

This states that "Ethan the ETF investor" (like me) will pay 0.2% ongoing charge plus 0.5% transaction charge [on top of the £5 dealing commission].

So it appears to me that iWeb do charge a custody fee (plus a horrid transaction charge).

(I'm sorry if i've misunderstood).

As stated above, you've misunderstood. These are hypothetical examples of your chosen ETF's fund management charges, not a custody fee. ETFs usually have both an ongoing charge (OCF) and bid/offer spread to consider (plus some other hidden charges not included in those items), in addition to iWeb's £5 trading fee. There may also be a forex fee incurred when your £ investment is used to buy any foreign underlying assets within the ETF. So there are several costs included in the total cost of ownership of an investment, but not a custody fee if you use iWeb.

If you consider trading fees to be "horrid", these can be avoided using a platform that makes its money in other ways, but you cannot expect a firm to provide custody and brokerage services without making any money from customers at all. A variety of charging structures are available, so you pays your money and takes your choice.

dunstonh

dales1 said:

masonic said:

iWeb charges no custody fee at all, so if you don't trade, you'd pay nothing to iWeb.

After this morning's posts, I was considering moving from Hx Sharedealing to iWeb (now with no opening fee).

And I downloaded iWeb's costsandcharges.pdf today.

This states that "Ethan the ETF investor" (like me) will pay 0.2% ongoing charge plus 0.5% transaction charge [on top of the £5 dealing commission].

So it appears to me that iWeb do charge a custody fee (plus a horrid transaction charge).

(I'm sorry if i've misunderstood).

Transaction charges, in this respect, is at fund level.  Nothing to do with the platform.   Irrespective of where you hold the fund, those are the transaction charges.

Do remember that TC is a synthetic charge and not an explicit charge.  It is a creation by the EU that allows different calculation methods to be used that result in different outcomes.  It is also possible that some profit or loss also gets captured by the calculation and that makes it completely pointless.  The vast majority of investors take no notice of it.

GeoffTF

dales1 said:

This states that "Ethan the ETF investor" (like me) will pay 0.2% ongoing charge plus 0.5% transaction charge [on top of the £5 dealing commission].

As has been said these "charges" are notional numbers that iWeb gives, which are not specific to any particular fund. Vanguard's numbers are here:

https://intl.assets.vgdynamic.info/intl/ukpi/documents/legal/vanguard-full-fund-costs-and-charges.pdf

All the LifeStrategy funds have ongoing costs of 0.22%. The transaction costs (not technically "charges") vary from 0.02% to 0.07% depending on the LifeStrategy fund. Vanguard should be using the same method of calculation for all its funds. Other fund managers will use different methods of calculation. Some even quote negative transaction costs, which does not make much sense.