In an uncertain world there is only one factor influencing investment returns that you can have complete control over - the charges you pay. So it is a huge pity that comparing the pricing options to buy, sell and hold investments is still a chore.
Many investment platforms have become better at explaining their costs. However, it is still easy to be bamboozled by the layers of fees platforms charge, which can leave you none the wiser about where you will get the best value.
With that in mind, we have analysed the platform options and tried to pull out exactly what you will be paying in a number of common investment scenarios.
THE FULL PICTURE
With help from platform consultancy The Lang Cat, we have examined 27 platforms that offer Isas. This is almost the entirety of the platform market: The Lang Cat reckons these 27 account for more than 95 per cent of the picture.
Below and in a separate article we list each of the platforms in separate 'traffic light maps' for Isas and Sipps. We list prices in both percentage and absolute terms for several portfolio sizes.
Note also that we have included the price of two full fund switches in each entry (two sells and two buys), as well as pulling that cost out and putting it in a separate column.
The colours are straightforward: red means most expensive, moving through orange, yellow, greenish-yellow to green for the cheapest. This is not meant as any kind of endorsement; it relates to relative price only.
When choosing a platform you should look at its entire offering, rather than just the headline price. While some people want to invest in the cheapest way possible, many are more concerned with value.
You might not mind paying a little extra for a service that delivers what you want, whether that is research and sophisticated portfolio analysis tools, support on hand should you need it, or a simple-to-use website that always works.
There are also potentially other charges that we haven't included, such as exit fees if you decide to move elsewhere.
For example, Hargreaves Lansdown, in both its Isa and its Sipp, charges £25 per holding to transfer out as cash, and £25 per holding to transfer out as stock (an 'in specie transfer').
Many platforms also charge you to reinvest dividends. Halifax Share Dealing, for example, charges 2 per cent, up to a maximum £12.50, to reinvest dividends in its Isa account.
Fund charges have also been excluded. If you know which funds you want to buy, bear in mind that some platforms have lower charges on some funds than others and this will affect the overall cost.
The tables assume that you are buying and selling traditional investment funds - open-ended investment companies or unit trusts.
Charges can vary if you choose to hold investment trusts, exchange traded funds, shares or directly traded corporate bonds.
Moreover, not every platform offers access to every type of investment you might require, so do check beforehand.
Before you decide which platform to use, it is also worth considering whether you will need help selecting your investments from the thousands of fund options that are out there.
While platforms do not offer independent financial advice - although the companies offering them may have an advice service - many platforms offer a choice of ready-made portfolios.
NO PRICE WAR
Since Money Observer last examined the investment platform market (June 2015), costs have hardly changed.
Most existing providers have tended to stick with what they already had and new entrants, such as Aviva Consumer Platform, Saga Investment Services and Santander, have come in with similar fees. There has been no pricing war.
'The levelling out of charges suggests that fees are unlikely to go much lower - they have hit a floor,' says Terry Huddart, market analysis manager at The Lang Cat.
This is down to the economics of running a platform business. Any further cuts in charges will make it difficult for the platforms to make money: only a provider that is willing to forgo short-term profitability to grab market share is likely to come in with cheaper fees.
So far none has proved willing. The colour coded tables assume the price of four trades per entry.
WHO'S THE CHEAPEST?
With the above caveats in mind, it is possible to draw some firm conclusions. As a general rule, if you have large sums to invest, a platform that charges a fixed fee is likely to work out cheaper.
Those with smaller portfolios may well find that a service charging a percentage of your investment is more cost-effective.
Halifax Share Dealing and Alliance Trust Savings continue to charge the highest prices to trade: £50 for four trades compared to £125 for 10 trades last year.
However, they both charge competitive fixed annual fees, which means even with the dealing fees they start to look better value on larger sizes of portfolio.
In fact, on portfolios of £50,000 and above Halifax Share Dealing becomes the cheapest option, charging just £63 on a £1 million portfolio, for example.
Things work in the opposite way at Chelsea Financial Services. Like the majority of platforms it does not charge at all for trades; however, its relatively expensive annual percentage fee means that from £50,000 plus it becomes the most expensive Isa option. It charges 0.6 per cent up to £250,000.
On larger portfolios the fee falls slightly - to 0.58 per cent at £500,000 and 0.54 per cent at £1 million - but it still has the highest costs in our sample. It charges £5,375 at £1 million, making it £5,312 more expensive than Halifax Share Dealing, the cheapest for this amount.
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