Investment Fees - what are you paying?

[butchstewie]

Kind of what it says.

We all know fees matter because just like returns and losses they compound and they're usually constant i.e. you pay fees regardless of performance but sometimes based on performance.

I'm one of those typical hypocrites who would tell anyone else to invest in a low cost tracker or multi-asset fund whilst having a chunk of my own investments in expensive active funds.

Without getting specific the drag is enough to matter when you see it on a spreadsheet though because it's fund fees of course you never see them taken directly so it's easy to overlook them and think it doesn't matter so long as the performance is there - until it isn't of course and then you're still paying the fees (Fundsmith leaps to mind as of late).

So just a bit of curiosity - what are you paying and what's the split between advisor/platform/funds?

[trickywoo]

I’m paying 0.2% platform and between 0.12 and 0.2 on funds.

I know I could save on the platform but I prefer an established brand.

[quinny100]

0.15% platform, capped at £375 per year, minimum charge £4 per month.

0.12-0.17% OCF on the ETF’s I use.

I’ve finally persuaded my parents to move their investments to Vanguard. They were paying 1.64% for charges and advice to invest in the providers actively managed 80% equities fund. They were happy to pay it because they’ve “done well” because they’ve gone up most years and Ian (the rep) gave them a call for 15 minutes once a year and advised them to stick with what they’ve got. They had no idea what the charges actually were.

[Tye Green]

HL is an excellent platform if you invest only in ETFs - platform fees are max £12.50 / month and ETF fees are far lower than managed OEIC funds.

can't really see any benefit in managed funds frankly. Fundsmith is the most recent 'star fund manager' who's results have been very poor in recent years yet still charges nearly 1% for it.

I'd recommend HMWO though there are others.

[trickywoo]

This is going to sound really naive but I didn’t realise etf were so cheap on platform fees.

Fidelity is capped at £90 a year.

Are there really no downsides to holding etf?

[butchstewie]

trickywoo said:

This is going to sound really naive but I didn t realise etf were so cheap on platform fees.

Fidelity is capped at £90 a year.

Are there really no downsides to holding etf?

Depends what you call a downside.

• There's often a spread when buying/selling.
• They're often Ireland domiciled (tax implications if holding outside a wrapper).
• FSCS protections are often different.
• Depending on the platform you usually have to buy whole units rather than an amount of pounds worth.
• They're market tradable which is good thing or a bad thing depending your self control

[leef44]

Between my OH and myself we have Vanguard capped at £375 (up to 0.15%), a Hargreaves Lansdown etf ISA capped at £150 (around 0.15%), and Barclays which has recently reduced their fee from 0.25% to 0% (so free platform now )

[jayymannon]

I use Investengine to buy various ETFs so no platform fees. Average ETF cost (TER) according to them is 0.11%.

Edited by jayymannon on Sunday 12th July 13:33

[okgo]

Whatever Vanguard charge for VWRP across SIPP, JISA, ISA - probably not absolute cheapest but not remotely expensive either.

I’ve not seen a compelling enough reason to change it - but I’ve never bothered to really look at the fees in any detail

[Jon39]

butchstewie said:

We all know fees matter because just like returns and losses they compound and they're usually constant i.e. you pay fees regardless of performance but sometimes based on performance.

So just a bit of curiosity - what are you paying and what's the split between advisor/platform/funds?

Yes, you are right, fees can add up and sometimes there are costs incurred within a fund, that do not need to be disclosed.

£45 per year.
Capped charge for self select S&S ISA.
No other fees, so costs kept as low as possible.
I must not say what percentage that is, but am quite happy if they continue that level of charge for a while.

Hargreaves have just ended capped charges.

Recently Barclays announced zero fees for their ISAs. Rather late though.
Their history after buying the Sharelink platform, was first to continue the previous firm's capped fees.
They later decided to scrap that cap, so what do you think happened? After seeing fee increases of possibly 5 or 10 times, customers were quick to leave.
Perhaps they might follow NatWest, who ran a Nil charge for a while, before telling their customers, "Our ISA operation is closing".

Edited by Jon39 on Sunday 12th July 15:11

[trevalvole]

Jon39 said:

Hargreaves have just ended capped charges.

No, they haven't:

"Account charge for shares and other equities
Including Exchange Traded Funds (ETFs), investment trusts, bonds, gilts, and Venture Capital Trusts (VCTs).

Total invested Annual account charge*
Any 0.35% (capped at £12.50 per month)"

https://www.hl.co.uk/investment-services/isa/savin...

[bad company]

I use Scottish Widows, there’s no platform fees for ISA’s or share dealing.

[thekingisdead]

Scottish widows. No platform fee but £5 / trade. I don’t make many trades

Funds range from 0.06% - 0.3% depending on fund.

Majority of my investments in a global tracker which is about 0.15%

[Jon39]

trevalvole said:

Jon39 said:

Hargreaves have just ended capped charges.

No, they haven't:

"Account charge for shares and other equities
Including Exchange Traded Funds (ETFs), investment trusts, bonds, gilts, and Venture Capital Trusts (VCTs).

Total invested Annual account charge*
Any 0.35% (capped at £12.50 per month)"

https://www.hl.co.uk/investment-services/isa/savin...

You are technically correct trevalvole, that a cap still applies.
However, until recently the cap was (I think) £45 annually.
You state that it is now capped at £12.50 x 12 = £150 annually.
An increase of 233%.

Their charges for a reasonably sized portfolio, no longer match their main competition.
Not worth the bother of immediately moving an account, but it leaves a sour taste and future family transactions won't be routed through that account.

We can now perhaps understand the priorities, of their new private equity owners.
Customers second.


EDIT - They have a ludicrously complicated way of presenting their customers cash statement.
When something is simple, some people just have to make it complicated.

Edited by Jon39 on Sunday 12th July 21:19

[VR99]

£90 per year capped platform fees with Fidelity as I only use ETF's. Core ETF fees between 0.12 to 0.15 and have a few 'satellite' ETF's that are 0.3-0.45 although much smaller proportions invested so not too fussed.

I ended up with Fidelity as it was one of the few 'approved' platforms with my last employer. I think it's very good vfm for platform fees when you consider that fee covers all accounts i.e: in my case SIPP, S&SISA and JISA. I rate Vanguard and AJ BELL too, simple no frills platforms and established names. Actually I still use AJ BELL, single etf 0.12 fee. Need to recheck platform fees but it's reasonable as I recall and pay £6 annually to reinvest divi's every quarter.

I don't have a preference between ETF Vs OEIC funds but have mentioned before that multi-asset ETF offerings in the UK are poor (IMO) compared to OEIC's where you are spoilt for choice e.g Vanguard, HSBC, L&G and others all have decent ranges. Hopefully the ETF offerings will continue to expand.

Edited by VR99 on Sunday 12th July 21:51

[Panamax]

Jon39 said:

When something is simple, some people just have to make it complicated.

Such is the stock in trade of the financial services industry. Fancy jargon and deep obfuscation. After all, if the punters found out it's all rather straightforward they might be harder to milk for fees.

Having said that, I believe my platform accurately reports "total fees" once a year. Not just their own fees but all the internal costs within the funds as well. Mine come out a fraction under 1%. Yes, I know DIY would be cheaper but so is painting your own upstairs window frames or getting under your own car on the drive.

[Tye Green]

Jon39 said:

Their [HL] charges for a reasonably sized portfolio, no longer match their main competition.

for larger ETF-only portfolios the additional platform fee becomes a smaller overall % cost and IMO that extra cost is worth it for the superior telephone support

[Jon39]

Tye Green said:

For larger portfolios, the additional platform fee becomes a smaller overall % cost ...

Thank you for your informative guidance.
I wonder if Warren Buffett knows. -

If anyone communicating on a finance forum does not already understand that, then elementary arithmetic tuition is clearly required.

[Greshamst]

Flat fee, so it works out at about 0.017% platform fee which I’m more than happy with.

[C69]

trickywoo said:

This is going to sound really naive but I didn t realise etf were so cheap on platform fees.

Fidelity is capped at £90 a year.

Are there really no downsides to holding etf?

One downside to holding ETFs could be dealing charges.

For example, Fidelity has a dealing charge of £0 for funds, but for ETFs the ad hoc dealing charge is £7.50 per trade.

Of course, whether or not that's going to be a factor depends on how many trades you're likely to do and the overall size of your holdings.