Most Isa and Sipp investors should use a DIY investment platform. This allows you to hold a range of investments from different providers within your individual savings account (Isa) or self-invested personal pension (Sipp) tax wrapper. However, choosing a platform if you are starting out investing is difficult because you have to consider the funds held, the number of trades made and a whole host of other activity-related charges.
For investors who are finding it difficult to compare prices of investment platforms, the table below provided by The Platforum, an independent research firm that specialises in investment platforms, is the best indication of costs that we can find. It shows the costs of holding Isa and Sipp portfolios of differing amounts with 11 of the leading platform providers.
The £10,000 portfolio is an Isa only; the others are half Isa, half Sipp. For the £500,000 portfolio, the holdings are split 50:50 between funds and shares. The charges include the underlying funds’ annual management charges. The lowest costs for each portfolio size are highlighted in blue .
However, many investors hold a range of investments and the comparative cost of using different platforms may be significantly different to those illustrated below.
Platform cost comparison
| DIY investment platform | Size of portfolio (1) | |||
| £10,000 | £50,000 | £150,000 | £500,000 | |
| AJ Bell Youinvest www.youinvest.co.uk | £121 | £654 | £1,662 | £2,695 |
| Alliance Trust Savings www.alliancetrustsavings.co.uk | £206 | £790 | £1,598 | £2,407 |
| AXA Self Investor (4) www.axaselfinvestor.co.uk | £116 | na | na | na |
| Barclays Stockbrokers www.barclaysstockbrokers.co.uk | £116 | £579 | £1,737 | £3,178 |
| Bestinvest www.bestinvest.co.uk | £121 | £579 | £1,738 | £3,608 |
| Charles Stanley Direct www.charles-stanley-direct.co.uk | £104 | £642 | £1,685 | £2,928 |
| Chelsea Financial Services www.chelseafs.co.uk | £141 | na | na | na |
| Fidelity (2) www.fidelity.co.uk | £116 | £579 | £1,737 | na |
| Halifax Share Dealing www.halifax.co.uk/sharedealing | £143 | £632 | £1,530 | £2,338 |
| Hargreaves Lansdown (3) www.hl.co.uk | £121 | £605 | £1,815 | £3,285 |
| Interactive Investor www.iii.co.uk | £161 | £648 | £1,456 | £2,265 |
| TD Direct Investing (5) www.tddirectinvesting.co.uk | £113 | £713 | £1,928 | £3,115 |
| The Share Centre www.share.com | £218 | £902 | £1,710 | £2,518 |
Source: The Platforum, as at 2 April 2014
Notes:
(1) Scenario assumptions
£10,000 in funds within an Isa with four transactions per year
£50,000 in funds split equally between and Isa and a Sipp with 10 transactions per year
£150,000 in funds split equally between an Isa and a Sipp with 10 transactions per year
£500,000 - £150,000 in an Isa and £350,000 in a Sipp, each with half equities and half funds, with 10 transactions per year
The funds used are those that appear most on the buy lists of major UK platforms:
•Artemis Income
•AXA Framlington UK Select Opportunities
•First State Asia Pacific Leaders
•M&G Optimal Income
•BlackRock Gold and General
•M&G Recovery
Where we have not yet had details of specific fund charges, we have used the charges found most commonly for the above funds.
(2) With Fidelity you are unable to hold funds and shares in the same account (in a single Isa or Fidelity Sipp).
(3) Hargreaves Lansdown has used its purchasing power to secure discounted rates on a number of funds - for the funds used in our analysis, this discount is 0.048 per cent and is recognised in the above table. Some of these discounts are made by unit rebates, which would be taxable for funds held outside a tax wrapper.
(4) AXA Self Investor doesn't have a Sipp. For new Isa investors, there are no fees until 1 May 2015. Here we have used the pricing that will apply from then onwards. Until then the annual fee would only be the cost of the underlying funds, which would come to £80.83.
(5) TD Direct Investing reduced some of its charges on 1 April. The table incorportates these changes.
