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  • FIRST POST
    • Ellie78
    • By Ellie78 10th Nov 19, 12:20 AM
    • 64Posts
    • 58Thanks
    Ellie78
    Fund dealing/trading costs explanation needed
    • #1
    • 10th Nov 19, 12:20 AM
    Fund dealing/trading costs explanation needed 10th Nov 19 at 12:20 AM
    If I pick a platform where dealing/trading charges are taken how does that work?

    Say I have a pension/S&S ISA with one multi asset fund in it. Is adding monthly payments into that fund classed as dealing/trading? Or would I only have to pay those charges if I say added another fund?

    Just trying to weigh up monthly/yearly costs of different platforms/funds and I can't seem to find a straightforward explanation!
    Mortgage - 49,127.98 / 44,227.98 / 39,000 / 36,000 / 33,270 remaining
    2019 OPs - 15,620.23
Page 1
    • Linton
    • By Linton 10th Nov 19, 3:04 AM
    • 11,384 Posts
    • 11,811 Thanks
    Linton
    • #2
    • 10th Nov 19, 3:04 AM
    • #2
    • 10th Nov 19, 3:04 AM
    Any purchase or sale is a transaction with possible charges. Whether the fund is a new one for you or not makes no difference.
    • AnotherJoe
    • By AnotherJoe 10th Nov 19, 8:04 AM
    • 16,244 Posts
    • 19,480 Thanks
    AnotherJoe
    • #3
    • 10th Nov 19, 8:04 AM
    • #3
    • 10th Nov 19, 8:04 AM
    If I pick a platform where dealing/trading charges are taken how does that work?

    Say I have a pension/S&S ISA with one multi asset fund in it. Is adding monthly payments into that fund classed as dealing/trading?
    Yes. You are buying additional units. It might also apply if you are buying extra from dividends. Sometimes (often?) there is a reduced charge for that. EDIT; And as Albermarle says there may be dealing charges for one type of investment and not another. Funds vs shares/ ITs for example are often treated differently.
    Or would I only have to pay those charges if I say added another fund?
    No distinction whether its new or existing.
    Just trying to weigh up monthly/yearly costs of different platforms/funds and I can't seem to find a straightforward explanation!
    Originally posted by Ellie78
    Note that there is often a charge for holding as well as dealing, indeed holding charges will often be higher than dealing.and charges will often differ for holding different types of investment, let's say between a fund and shares for example.
    Also note that sometimes regular purchases (aka dealings) are cheaper than one offs, if for example you have a "standing order" to buy 100 a month ofa fund.
    Look for snowman's spreadsheet which will calculate the costs for you.
    Last edited by AnotherJoe; 10-11-2019 at 10:40 AM.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • Albermarle
    • By Albermarle 10th Nov 19, 10:23 AM
    • 1,748 Posts
    • 1,126 Thanks
    Albermarle
    • #4
    • 10th Nov 19, 10:23 AM
    • #4
    • 10th Nov 19, 10:23 AM
    Some platforms/personal pensions/ISA's/SIPPS do not charge for buying and selling funds, such as multi asset funds ( although they all charge for buying/selling exchange traded products ) . However as a general rule the ones that do not charge have a higher overall platform charge .
    https://monevator.com/compare-uk-cheapest-online-brokers/
    • Ellie78
    • By Ellie78 10th Nov 19, 11:04 AM
    • 64 Posts
    • 58 Thanks
    Ellie78
    • #5
    • 10th Nov 19, 11:04 AM
    • #5
    • 10th Nov 19, 11:04 AM
    Thanks for clearing that up!

    I'm trying to decide if going with a more well known fund via a platform with more charges will work out better in the long run than the limited choice offered by a very cheap no charges platform.

    I'll take a look at Snowman's spreadsheet and see if that helps.
    Mortgage - 49,127.98 / 44,227.98 / 39,000 / 36,000 / 33,270 remaining
    2019 OPs - 15,620.23
    • IanSt
    • By IanSt 10th Nov 19, 12:10 PM
    • 363 Posts
    • 273 Thanks
    IanSt
    • #6
    • 10th Nov 19, 12:10 PM
    • #6
    • 10th Nov 19, 12:10 PM
    I'm trying to decide if going with a more well known fund via a platform with more charges will work out better in the long run than the limited choice offered by a very cheap no charges platform.
    Originally posted by Ellie78
    You might well find that you'd be best to start off with a percentage based platform with low/zero charges for fund purchases for the first few years and then transfer across to a fixed fee platform when that starts to make a significant saving.

    E.g. my DW started off an ISA with a monthly plan with Fidelity (so there was only the 0.35% annual platform charge with no dealing costs for her monthly purchases of funds) but she has now transferred the funds across to iweb where costs are 5 per deal but there are no other annual platform charges (though you do have to pay 25 the first time you open an iweb account).
    • Albermarle
    • By Albermarle 10th Nov 19, 2:33 PM
    • 1,748 Posts
    • 1,126 Thanks
    Albermarle
    • #7
    • 10th Nov 19, 2:33 PM
    • #7
    • 10th Nov 19, 2:33 PM
    You might well find that you'd be best to start off with a percentage based platform with low/zero charges for fund purchases for the first few years and then transfer across to a fixed fee platform when that starts to make a significant saving.
    The only rider to that is if you were not invested in funds/OEIC's but in shares/Investment Trusts/ETF's.
    The main % based providers ( HL, AJ Bell & Fidelity ) all cap their annual charges on these products at low levels , so they are competitive with fixed fee providers in this instance.
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