Alliance Trust Savings is raising its account management charges on individual savings accounts (Isa), self-invested personal pensions (Sipp) and investment dealing accounts from 1 February 2017. It follows brokers such as Barclays Stockbrokers in making changes to its fee structure.
The Isa and investment dealing account management charges will rise from £7.50 a month to £10 a month, but as part of the increase investors will be able to make four online trades a year at no additional cost.
Investors with a Sipp account they have yet to access will see their account charge rise from £15 plus VAT a month to £17.50 plus VAT a month. Those with a Sipp account who are in drawdown will see the charge rise from £21.25 plus VAT a month to £23.75 plus VAT a month. Both types of Sipp account will however benefit from having four online trades a year included in the price.
There have also been changes made to the cost of transferring your Sipp away from the platform. If you opened a Sipp account before 31 March 2017 you will be charged 1 per cent of the value of your account up to a maximum of £150 plus VAT to transfer out. If you open a Sipp on or after 31 March 2017, you will not be charged to transfer your pension to another provider if you are aged over 55. But if you choose to transfer before age 55 you will be charged 1 per cent of the value of your account up to a maximum of £150 plus VAT.
Alliance Trust Savings is also dropping its online transaction charges from £12.50 per trade to £9.99 per trade. But it is putting up the cost of trading over the phone or via post from £40 per trade to £50 per trade. However telephone traders who have held an account with Alliance Trust Savings for more than five years will be able to participate in the loyalty discount for the first time. This will see the transaction cost drop to £45 per telephone trade if you've held an account for five to 10 years, £42.50 if you've held an account for 11 to 15 years, £40 for 16 to 20 years and £37.50 for more than 20 years.
"A sizeable portion of our clients will see no material impact on the value of their investment portfolios or be better off as a result of these changes"
The annual charge for receiving paper documents such as half-yearly statements or contract notes will rise substantially from £5 plus VAT to £25 plus VAT. However you can choose to receive all documents online for free and will only be charged once, if you hold multiple accounts.
Regular trading charges and regular dividend reinvestment charges stay unchanged at £1.50 and £5 respectively.
For any customers who want to leave as a result of the changes, Alliance Trust Savings is waiving its exit charges until 27 January 2017. Transferring out of an Alliance Trust Savings Isa normally costs £100 plus VAT, and transferring out of an investment dealing account costs £60 plus VAT.
"We are restructuring charges for both our direct and advised businesses to better reflect how our customers use our services," says a spokesperson at Alliance Trust Savings. "Our prices remain very competitive, particularly at larger account sizes, and a sizeable portion of our clients will see no material impact on the value of their investment portfolios or be better off as a result of these changes. As a flat fee provider our prices do change from time to time, but they are transparent and fair, and our customers can be certain what they will pay. A percentage fee provider is effectively changing their cash price to the customer all the time - every time a customer adds money to their account and as markets go up and down. We are confident in the products and services we provide, and in the longer term benefits to customers of our fair, flat fee approach."
Jeremy Fawcett, head of direct at platform research company Platforum, says that despite the price rises regular traders and people with substantial portfolios won't fare too badly.
"This is a realignment from the company's perspective that is competitive for the vast majority of people, although people in different scenarios will be affected in different ways," he says. "For a lot of people with fairly substantial portfolios the price has gone up, but it's still pretty competitive compared to any of the options on the market that charge on a percentage of assets. And people who trade a little bit will probably be better off under the new package.
"But it has slightly upset some of the traditional buy and hold investors who felt that was the ethos of Alliance Trust Savings. I think that's a little unfair because it's a business and you can't just give a free ride to a whole load of customers who use the service for their own benefit and pay very little for it."
He adds that as one of the few platforms to offer fixed fees, Alliance Trust Savings may work out cheaper for people with larger pots who like to buy and hold investments, compared with platforms that charge a percentage based fee.
Alliance Trust Savings charges: old and new
|Account||Current charge (no trades included)||*Charge from February 1 2017|
|Investment Savings Account||£7.50 a month||£10 a month|
|Investment Dealing Account||£7.50 a month||£10 a month|
|Sipp - savings||£15 Plus VAT a month||£17.50 Plus VAT a month|
|Sipp - income||£21.25 Plus VAT a month||£23.75 Plus VAT a month|
*Includes four free online trades
Source: the lang cat
Isa charges for holding funds compared by portfolio size and broker*
|AJ Bell Youinvest||£131||£256||£631||£881||£1,381|
|Alliance Trust Savings BEFORE 1/2/17||£140||£140||£140||£140||£140|
|Alliance Trust Savings AFTER 1/2/17||£120||£120||£120||£120||£120|
|Aviva Consumer Platform||£200||£375||£900||£1,525||£1,525|
|AXA Self Investor||£175||£350||£500||£1,000||£2,000|
|Charles Stanley Direct||£125||£250||£625||£1,125||£1,875|
|Close Brothers A.M. Self Directed Service||£125||£250||£625||£1,250||£2,500|
|Fidelity Personal Investing||£175||£350||£500||£1,000||£2,000|
|James Hay Modular iPlan||£90||£180||£450||£900||£1,650|
|The Share Centre||£88||£184||£184||£184||£184|
Source: the lang cat
*Calculated using the main platform custody charges, annual product charges and fund dealing costs, assuming four trades a year.