platform fund charges

[500swk]

just recieved my cost disclosures from alliance trust now ii,
total charges comes to 1.24% of portfolio,does seem rather high for an alledged fair flat fees platform.
any other platforms that would be worthy of consideration or are they all high fair flat fees

[bitchstewie]

My experience of platforms (assuming you're essentially a DIY investor) is that costs will vary massively depending on type of investment, amount held, and dealing frequency.

A platform that's super expensive for one persons requirements can be literally dirt cheap for anothers.

[Simpo Two]

500swk said:

just recieved my cost disclosures from alliance trust now ii,
total charges comes to 1.24% of portfolio,does seem rather high for an alledged fair flat fees platform.
any other platforms that would be worthy of consideration or are they all high fair flat fees

What do the charges include?

[cloud_dog]

500swk said:

just recieved my cost disclosures from alliance trust now ii,
total charges comes to 1.24% of portfolio,does seem rather high for an alledged fair flat fees platform.
any other platforms that would be worthy of consideration or are they all high fair flat fees

SnowMan over on the MSE forum has pulled together an excellent spreadsheet to allow you to identify the best provider based on your own requirements.

It allows you to enter the amounts involved, type of investments held, likely number of trades over the year and breakdown the associated costs.

Look here: https://forums.moneysavingexpert.com/showthread.ph...

Download and have a play.

[bitchstewie]

cloud_dog said:

SnowMan over on the MSE forum has pulled together an excellent spreadsheet to allow you to identify the best provider based on your own requirements.

It allows you to enter the amounts involved, type of investments held, likely number of trades over the year and breakdown the associated costs.

Look here: https://forums.moneysavingexpert.com/showthread.ph...

Download and have a play.

I've used this a fair bit.

It's absolutely terrifying how much some "cheap" platforms can cost and how little some "expensive" platforms can cost simply by varying how often you trade or whether you buy funds or trusts and ETFs.

[anonymous-user]

bhstewie said:

A platform that's super expensive for one persons requirements can be literally dirt cheap for anothers.

I'm around the same all-in charges as 500swk, with the bulk coming from active fund managers. Committed indexing might take out 0.5% although a different strategy.

[chip*]

bhstewie said:

I've used this a fair bit.

It's absolutely terrifying how much some "cheap" platforms can cost and how little some "expensive" platforms can cost simply by varying how often you trade or whether you buy funds or trusts and ETFs.

Good point. Apart from cost which is big driver for most, I also consider other benefits such as a fully functional phone app (review performance, ability to transact, market news etc..) and a quality customer support team for anything else I couldn't do on my phone.

Finally, I hope I don't come across as a HL fanboy, but HL are open to negotiation on platform fees if you have a sizeable portfolio, so they are not as expensive as you think.

[500swk]

ii down again this weekend,but from memory
0.1 is platform
0.13 is buying/reinvesting
the rest is ongoing costs which i take to be fund charges although it doesnt specify which ones

[500swk]

cloud_dog said:

SnowMan over on the MSE forum has pulled together an excellent spreadsheet to allow you to identify the best provider based on your own requirements.

It allows you to enter the amounts involved, type of investments held, likely number of trades over the year and breakdown the associated costs.

Look here: https://forums.moneysavingexpert.com/showthread.ph...

Download and have a play.

cheers,i have a play with that

[anonymous-user]

500swk said:

the rest is ongoing costs which i take to be fund charges although it doesnt specify which ones

It's very easy to look up the charges for each of your funds on Morningstar.
For instance, https://www.morningstar.co.uk/uk/funds/snapshot/sn...

Half way down the right side of the page you can see the ongoing charge is shown as 0.75%

[JulianPH]

rockin said:

500swk said:

the rest is ongoing costs which i take to be fund charges although it doesnt specify which ones

It's very easy to look up the charges for each of your funds on Morningstar.
For instance, https://www.morningstar.co.uk/uk/funds/snapshot/sn...

Half way down the right side of the page you can see the ongoing charge is shown as 0.75%

The Morningstar page you linked to is helpful, but the 0.75% ongoing charge figure is only what the fund manager charges.

Morningstar states there is a Transaction Fee of 0.4227% and then contradicts this by stating it is 0.73% and 0.38% (it also states on the charges page that the ongoing charge is 82.41%).

It is no wonder people are confused.

I believe that most people just want to know the total price - and that this would make comparison far more simple.

If I buy a jumper I really do not need to know what the farmer charged for the wool, what the designer charged for the design, what the manufacture charged for producing it or what the retailer charged for stocking and selling it.

I just want to know what the jumper costs me!

If everyone just disclosed the actual cost (and had to give a breakdown of this for those requesting it) than comparison would be much simpler.

My tuppence in the ring, so to speak.

[anonymous-user]

I think it's clear enough. Total charges are these days reported with a breakdown and you can check out individual funds according to taste.

The big difference comes when you're paying 0.9% to an active manager as opposed to 0.2% for a low cost tracker. [Figures illustrative only.] That additional 0.7% is may well double an investors total costs.

To some extent internal transaction charges are an inevitable consequence of buying a prudently diversified fund.

[cloud_dog]

The inclusion of displaying the different types of charges was to ensure full transparency of charges an investor may incur, directly or indirectly. I'm sure most everyone is aware of direct charges/costs associated with their investments but, the powers that be identified that a number of funds / managers (sic), how shall I say this.... had ambiguous or opaque charges that were not specifically highlighted to the individual making an investment, and therefore an investor would not have the full facts in order to make an informed decision.

[JulianPH]

rockin said:

I think it's clear enough. Total charges are these days reported with a breakdown and you can check out individual funds according to taste.

The big difference comes when you're paying 0.9% to an active manager as opposed to 0.2% for a low cost tracker. [Figures illustrative only.] That additional 0.7% is may well double an investors total costs.

To some extent internal transaction charges are an inevitable consequence of buying a prudently diversified fund.

We usually agree, but in this case you cited that Morningstar states the ongoing charge as 0.75% when this was actually just the fund management charge.

The ongoing charge is actually 0.8241% with an annual transaction fee of 0.4227%. That is 1.2468% (all of these figures are according to Morningstar).

Then you have the platform charge...

I think this is wrong and 0.8241% is closer to the mark, but Morningstar doesn't help here.

It contradicts itself further and is, frankly, an absolute mess.

I completely agree with your second point though.

cloud_dog said:

The inclusion of displaying the different types of charges was to ensure full transparency of charges an investor may incur, directly or indirectly. I'm sure most everyone is aware of direct charges/costs associated with their investments but, the powers that be identified that a number of funds / managers (sic), how shall I say this.... had ambiguous or opaque charges that were not specifically highlighted to the individual making an investment, and therefore an investor would not have the full facts in order to make an informed decision.

I have some serious experience that this is not the case. It is also more usually certain financial advisers who hide the full costs from their clients (again, this is based upon a huge amount of experience).

Yes, fund charges are not as simple as they could be (total cost) but this has already been dealt with under MiFID II disclosure.

It is financial advice and platform fees that are still being buried in the real world.

Platform charges (given this is what this thread is about) are displayed in so many different ways as to make any comparison virtually impossible.

This needs addressing. Most people are happy to pay more for something better, but platforms (and financial advisers/fund managers) just need to ensure the total cost is disclosed to all clients and potential clients.

[cloud_dog]

JulianPH said:

rockin said:

I think it's clear enough. Total charges are these days reported with a breakdown and you can check out individual funds according to taste.

The big difference comes when you're paying 0.9% to an active manager as opposed to 0.2% for a low cost tracker. [Figures illustrative only.] That additional 0.7% is may well double an investors total costs.

To some extent internal transaction charges are an inevitable consequence of buying a prudently diversified fund.

We usually agree, but in this case you cited that Morningstar states the ongoing charge as 0.75% when this was actually just the fund management charge.

The ongoing charge is actually 0.8241% with an annual transaction fee of 0.4227%. That is 1.2468% (all of these figures are according to Morningstar).

Then you have the platform charge...

I think this is wrong and 0.8241% is closer to the mark, but Morningstar doesn't help here.

It contradicts itself further and is, frankly, an absolute mess.

I completely agree with your second point though.

I don't know why you have conflated two completely different measures and reflect them as to be confusing?

0.75% is the ongoing charge. Stop. The transaction costs are outside of the ongoing fund charge measure, and this is why they are listed separately. All funds incur transaction charges, some more so and some less so but funds/managers must provide transaction costs.

Regarding the ongoing charge of 0.8241% that you refer to, this is based upon a hypothetical £10k investment, over a 5 year period which includes a nominal growth rate of 5% per annum in the fund. The different charges in this example are estimated.

JulianPH said:

cloud_dog said:

The inclusion of displaying the different types of charges was to ensure full transparency of charges an investor may incur, directly or indirectly. I'm sure most everyone is aware of direct charges/costs associated with their investments but, the powers that be identified that a number of funds / managers (sic), how shall I say this.... had ambiguous or opaque charges that were not specifically highlighted to the individual making an investment, and therefore an investor would not have the full facts in order to make an informed decision.

I have some serious experience that this is not the case. It is also more usually certain financial advisers who hide the full costs from their clients (again, this is based upon a huge amount of experience).

Yes, fund charges are not as simple as they could be (total cost) but this has already been dealt with under MiFID II disclosure.

It is financial advice and platform fees that are still being buried in the real world.

Platform charges (given this is what this thread is about) are displayed in so many different ways as to make any comparison virtually impossible.

This needs addressing. Most people are happy to pay more for something better, but platforms (and financial advisers/fund managers) just need to ensure the total cost is disclosed to all clients and potential clients.

Of all the charges, usually, the platform charges and the IFA charges are the simplest and most transparent. MiFID II have made fund/manager charges more transparent although there still appears to be areas of greyness.

[anonymous-user]

Agreed. It's taken me many years to get a decent grasp of what I call "all-in" charges and the current level of disclosure appears a significant step forward.

I thought I was running at about 1% "all-in" but this year's disclosures show the reality to be around 1.2% (some of the difference coming from transaction charges within funds).