Platform Charges - ETFs vs OEICs

Qyburn

Hi,
Just something I keep wondering. Across most platforms, ETF charges are higher for buying and selling, but many cap their custody charges for ETFs but not for OEICs. I know its not universal, but I don't think any are the other way round with lower custody charges for OEICs and lower dealing charges for ETFs.

Just wondered what the reason for this is, why ETFs should be more expensive to trade but cheaper to hold.

GeoffTF

OEICs and Unit Trusts used to pay trail commission (except for index trackers). The regulator banned that. Most platforms responded by charging a platform fee instead. The regulator mandated that the fee should be the same for all funds, so they charged it for index trackers too. ETFs are shares. A platform fee was not usually charged for shares, because Crest registered shares could be held in certificated form. It is also more expensive for platforms to support OEICs and Unit Trusts,

cloud_dog

Qyburn said:

Hi,
Just something I keep wondering. Across most platforms, ETF charges are higher for buying and selling, but many cap their custody charges for ETFs but not for OEICs. I know its not universal, but I don't think any are the other way round with lower custody charges for OEICs and lower dealing charges for ETFs.

Just wondered what the reason for this is, why ETFs should be more expensive to trade but cheaper to hold.

Flat fee platform providers like Interactive Investor or iWeb.

Chordeiles

I'm very happy with the flat fee charges at II, but I did get a minor disappointment when I realised some iShares (and others) pay dividends in dollars (even though share quoted in GBP), and the II FX charge is rather higher than (for instance) HL.  I now use https://www.dividenddata.co.uk/ to check what currency the dividend will be paid in (iShares are particularly unhelpful on this subject).
Likewise I bought a tracker (on LSE) (CSPX) which was quoted in dollars whilst I was at HL, then transferred it to II, and eventually sold it, it was bit of a shock to see the FX charge !
I note that II frequently have offers "trade US shares for free".  Of course they do, they are making more on FX than they ever would on share dealing in the US !
Look, there is no way this makes II anywhere near as expensive as HL (for a portfolio of 100K upwards for example).  But there still are a few wrinkles to beware of.  In the same way that I used to keep shares in my ISA and funds in my SIPP at HL, to best take advantage of their strange charge capping structure.

masonic

Chordeiles said:

I'm very happy with the flat fee charges at II, but I did get a minor disappointment when I realised some iShares (and others) pay dividends in dollars (even though share quoted in GBP), and the II FX charge is rather higher than (for instance) HL.  I now use https://www.dividenddata.co.uk/ to check what currency the dividend will be paid in (iShares are particularly unhelpful on this subject).
Likewise I bought a tracker (on LSE) (CSPX) which was quoted in dollars whilst I was at HL, then transferred it to II, and eventually sold it, it was bit of a shock to see the FX charge !
I note that II frequently have offers "trade US shares for free".  Of course they do, they are making more on FX than they ever would on share dealing in the US !
Look, there is no way this makes II anywhere near as expensive as HL (for a portfolio of 100K upwards for example).  But there still are a few wrinkles to beware of.  In the same way that I used to keep shares in my ISA and funds in my SIPP at HL, to best take advantage of their strange charge capping structure.

Any reason you didn't opt for CSP1 priced in £? The iShares website gives all of the stock market listings for their ETFs and associated trading currencies.

I've just completed a S&S ISA transfer to HL from II, and am looking forward to paying £45 pa rather than £144.

Albermarle

In the same way that I used to keep shares in my ISA and funds in my SIPP at HL, to best take advantage of their strange charge capping structure.

Fidelity and AJ Bell  have similar 'strange' capping structure.

With the former it is £90 for the whole platform, including SIPP and ISA.