X-O (Jarvis) online platform to close in the summer

Hoenir

filbert1884 said:

Why are so many opening an account with a provider (iWeb) that charges £5 per trade and pays no interest on cash balances in a S&S ISA? What am I missing?

This is an FCA requirement now.  Platforms historically generated around a third of their income from this source. Hence why fees charged were miminal. The rules have been changed. Vanguard didn't introduce a much higher base level of monthly charge for fun. This is going to be a constantly evolving landscape. As platforms will be happy to lose (offload) unviable trading accounts. 

GeoffTF

buglawton said:

IWeb's costs table of the major competitors. They don't include Trading212 presumably because it's not big enough.

https://www.iweb-sharedealing.co.uk/charges/competitor-charges.html

"Why have we picked these competitors?

The five other brokers in the chart represent the five largest stockbrokers in the market, they also offer a service which is similar to the one IWeb offers (e.g. they don't charge a subscription fee for access to their full range of assets)".

 

Trading 212 has been excluded because it does not support OEICs or Unit Trusts, and the comparison is with the average iWeb customer who holds them. (A mathematical curiosity is that the "average customer" would hold some, even if most of their customers do not.)

GeoffTF

Hoenir said:

filbert1884 said:

Why are so many opening an account with a provider (iWeb) that charges £5 per trade and pays no interest on cash balances in a S&S ISA? What am I missing?

This is an FCA requirement now.  Platforms historically generated around a third of their income from this source. Hence why fees charged were miminal. The rules have been changed. Vanguard didn't introduce a much higher base level of monthly charge for fun. This is going to be a constantly evolving landscape. As platforms will be happy to lose (offload) unviable trading accounts. 

Vanguard has always paid interest on cash balances. It has been said that iWeb escapes the requirement to pay interest because it does not charge a platform fee, but I do not know whether that is true.

SnowMan

Hoenir said:

filbert1884 said:

Why are so many opening an account with a provider (iWeb) that charges £5 per trade and pays no interest on cash balances in a S&S ISA? What am I missing?

This is an FCA requirement now.  Platforms historically generated around a third of their income from this source. Hence why fees charged were miminal. The rules have been changed. Vanguard didn't introduce a much higher base level of monthly charge for fun. This is going to be a constantly evolving landscape. As platforms will be happy to lose (offload) unviable trading accounts. 

I am not aware of any requirement for platforms to pay interest on cash balances. What is your basis for saying that?

The FCA did send a dear CEO letter on 12th December 2023 to investment platforms about concerns in relation to interest retained by platforms on cash deposits held with platforms. While that seems to be discouraging the retention of interest on cash holdings, it is much more nuanced than you are suggesting here. It was only the practice of paying no interest on cash holdings and also charging customers for cash holdings (for example applying the platform percentage charge to cash also), so called 'double dipping' that didn't have this nuance to it.  

Hoenir

GeoffTF said:

Hoenir said:

filbert1884 said:

Why are so many opening an account with a provider (iWeb) that charges £5 per trade and pays no interest on cash balances in a S&S ISA? What am I missing?

This is an FCA requirement now.  Platforms historically generated around a third of their income from this source. Hence why fees charged were miminal. The rules have been changed. Vanguard didn't introduce a much higher base level of monthly charge for fun. This is going to be a constantly evolving landscape. As platforms will be happy to lose (offload) unviable trading accounts. 

Vanguard has always paid interest on cash balances. It has been said that iWeb escapes the requirement to pay interest because it does not charge a platform fee, but I do not know whether that is true.

X-O charged no fees other than trading on ISA and GIA. 

The greatest challenge is software upgrading. Probably why Jarvis decided to pull the plug entirely a while back. 

Vanguard introduced interest in January 2023. The FCA hs been onto this topic for some years now. 

GeoffTF

Hoenir said:

GeoffTF said:

Hoenir said:

filbert1884 said:

Why are so many opening an account with a provider (iWeb) that charges £5 per trade and pays no interest on cash balances in a S&S ISA? What am I missing?

This is an FCA requirement now.  Platforms historically generated around a third of their income from this source. Hence why fees charged were miminal. The rules have been changed. Vanguard didn't introduce a much higher base level of monthly charge for fun. This is going to be a constantly evolving landscape. As platforms will be happy to lose (offload) unviable trading accounts. 

Vanguard has always paid interest on cash balances. It has been said that iWeb escapes the requirement to pay interest because it does not charge a platform fee, but I do not know whether that is true.

X-O charged no fees other than trading on ISA and GIA. 

The greatest challenge is software upgrading. Probably why Jarvis decided to pull the plug entirely a while back. 

Vanguard introduced interest in January 2023. The FCA hs been onto this topic for some years now. 

I have just checked one of my old statements. Vanguard paid £0.01 interest into my SIPP on 01/03/22.

UncleK

GeoffTF said:

filbert1884 said:

Why are so many opening an account with a provider (iWeb) that charges £5 per trade and pays no interest on cash balances in a S&S ISA? What am I missing?

Because you pay nothing if you do not trade or hold a cash balance. If you trade rarely, it costs very little. iWeb is owned by Lloyds Bank, so your investments should be safe. If you have many times the compensation limit, safety matters.

I think you've put it in a nutshell for many people, Geoff - plus the dividends paid away mentioned later by others. Of course, others may want different things, but I'm sure that's a popular need.

filbert1884

sjw1 said:

filbert1884 said:

Why are so many opening an account with a provider (iWeb) that charges £5 per trade and pays no interest on cash balances in a S&S ISA? What am I missing?

Because many people have shares in <insert company name here>, have no wish to pay a monthly fee and just want to be able to sell them at a reasonable rate when they want to?

Open to suggestions though....

My point is there are platforms that charge £0 per trade, and £0 platform fees, so why are people signing up to a platform that charges £5 per trade?

filbert1884

Section62 said:

filbert1884 said:

Why are so many opening an account with a provider (iWeb) that charges £5 per trade and pays no interest on cash balances in a S&S ISA? What am I missing?

I have no plans to buy or sell anything, and if I did it would be one 'sell' order which at £5 would currently be cheaper than X-O's £5.95.

I don't keep enough cash in a S&S ISA for long enough to worry about the interest on it, and with no ongoing monthly fees there's no need to keep a cash float for the fees to be taken from.

The question I ask myself is why didn't I transfer to iWeb sooner... the only thing I can think of is the now scrapped £100 joining fee which would have made it a bad move.  Then maybe I got a bit lazy and was happy to stay with X-O, because there was no monthly cost in doing so.

Ok, make sense, but why not choose a platform that charges £0 per trade?

filbert1884

Each to their own, and everyone needs to do what they feel is right for them.

I have made what I now see as "mistakes" in the past, which I have learned from.

I only invest in shares and ETFs, so a platform that offers other types of investments isn't important to me, and I like that any cash I am holding (which is there only for a short while until I invest it), earns daily interest. I also like that I can buy & sell with £0 commission, and dividends are paid out on the day they're meant to be. 

I have been moving my portfolio steaduly out of X-O and Freetrade over the last 2 years, and this move has pushed me to move the remaining shares I have in my ISA and GIA with X-O, without fees.

Good luck all, and I hope you all end up on a platform that you are happy with.