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The cheapest DIY platforms to buy investment trusts

The cheapest DIY investment platforms for buying investment trusts
The cheapest DIY platforms to buy investment trusts

Savvy DIY investors could pay less to hold investment trusts by choosing the right platform.

Platforms with lower annual charges for holding trusts 

The main cost you pay to a platform is an annual charge, or custody charge, and in many cases, platforms charge less to hold investment trusts, exchange traded funds (ETFs) and stocks and shares than open-ended funds. According to research conducted by the Association of Investment Companies (AIC) and consultancy company the lang cat ongoing costs vary widely.

Of the 26 platforms surveyed, six platforms have no ongoing costs when you hold investment companies; seven have fixed fees ranging from £20 to £120 and the remainder have charges based on a percentage of your assets that may or may not be capped.

Standard transaction costs vary from £5 to £12.50, though 12 of the 26 platforms offer much lower fees (typically between £1 and £2) if you invest regularly.

Hargreaves Lansdown charges 0.45 per cent on all fund holdings but caps its fee at £45 per year for investors buying stocks, shares investment trusts and exchange traded funds (ETFs).

AJ Bell Youinvest also levies a percentage-based fee for fund holdings but caps that cost for anyone investing in investment trusts. It charges 0.25 per cent on non-fund investments capped at £30 per year for investors with a general investment account or Individual savings account (Isa) and capped at £100 for investors buying funds through a pension wrapper.

Barclays Smart Investor also charges investors differently for open and closed-end funds. Fund investors pay 0.2 per cent of the assets held on the platform whereas investors in closed end funds pay 0.1 per cent  of the value of assets held on the platform.

The cheapest platforms to hold trusts on

Some platforms do not charge any custody fee at all to hold investment trusts. Those include SVS XO, X-OIG and Selftrade. Halifax Share Dealing also does not charge an annual fee for its general investment account but levies a fee of £12.50 per year to buy funds within an Isa. Platforms like Club Finance and Charles Stanley Direct waive their fees if investors trade within the month.

The platforms with the lowest flat annual charges to hold trusts in an Isa include iWeb, which only charges a one-off £25 for opening an account and no annual fee after that, and iDealing, which charges £20 per year. Fidelity caps its fees at £45 per year for investment trusts and charges 0.35 per cent per year on amounts over £7,500 beneath that cap.

The cheapest platform for you will depend on the value of assets you hold and the charging structure of the platform you use. Investors with large volumes of assets benefit from flat-fee charging structures whereas those with smaller portfolios are more likely to benefit from a percentage-based model. The benefit of flat fee models are that regardless of the size of your portfolio you pay the same amount, meaning your costs do you not increase along with your assets.

Platforms that charge less to trade investment trusts

Another key cost to consider when buying investment trusts via platform is the trading costs you incur when you buy and sell. You should not trade frequently in investment trusts and should see them as long-term buy and hold investments as a general rule however costs can fast rack up if, as with some platforms, you are paying £9.95 every time you buy and sell.

The cheapest platforms to buy and sell investment trusts include Clubfinance, which charges just £4.95 per trade, iWeb, which costs £5 and X-O, which charges £5.95 per trade. The most expensive include platforms like Charles Stanley Direct, which levies a fee of £11.50 each time you buy and sell a trust, Halifax Share Dealing, at £12.50 and EQ Shareview, which charges £12.95.

Many platforms also reduce costs for more active traders. Those include Hargreaves Lansdown, which charges £11.95 per trade if investors make between one to ten trades in a month but reduces that to £8.95 if more than ten trades were made in the previous month and £5.95 I more than 20 trades were made in the month before.

IG’s cost reduced from £8 to £5 if more than ten trades were made in the previous month.

Generally speaking funds are cheaper to buy and sell than investment trusts and stocks and shares. Barclays Smart Investor charges £3 to deal funds for example but charges £6 to deal in investment trusts, exchange traded funds (ETFs) and stocks and shares.

Make the most of regular investing

Regular investing is a good way to drip feed money into the market and can also significantly reduce your trading costs. Drip feeding money gradually into funds means that you avoid the difficulties of trying to time the market and benefit from pound cost averaging, whereby some months you are able to buy more shares and some less, depending on the trust’s performance in the market. It is a process that lets you smooth out market volatility.  

The key benefit of setting up a regular investing plan is that platforms reduce your trading costs as a result. For example Alliance Trust Savings charges £9.99 per trade if customers have not set up a regular investing plan but only £1.50 per trade if they have. And AJ Bell reduces trading fees from a maximum of £9.95 down to £1.50 where customers have set up regular investing.

The best platforms for smaller and larger Isa portfolios

Investors with £50,000 investment-trust focused portfolios would be best buying Isas from Clubfinance, X-O and iWeb, all of which charge the same amounts regardless of portfolio size assuming they made 12 trades within a year.

The most investors with a £50,000 portfolio making that number of trades would pay would be £343.40, on Saga Investment Service's platform. Strawberry and Charles Stanley Direct are also relatively more expensive for smaller Isa portfoios – both charge just under £300 per year.

Saga is also the most expensive for large portfolios of £500,000 also making 12 trades per year. Saga costs £1,643. Platforms like Bestinvest, Strawberry, Barclays, Willis Owen and Close Brothers Asset Management all charge more for investors with larger portfolios than smaller ones because of their tiered fee structure. It means that the most expensive Isa platform for large portfolios of £500,000 making 12 trades in a year are Saga, at £1,643 and Bestinvest, at £1,590.

The charges you could pay to hold investment trusts

  • Ongoing charges (funds)
  • Admin charges/ custody charges
  • Trading costs
  • Regular investing charge
  • Extra pension charges
  • Set-up costs
  • Dividend reinvestment fees

Platform cost comparison for investment trust portfolios 

DIY PLATFORMCORE CHARGES FOR INVESTMENT TRUST ASSETSEXTRA ANNUAL COSTS FOR PENSION WRAPPER TRUST TRADING COSTS 
IG£0£195£8 per trade, reducing to £5 if 10+ trades in previous month
Selftrade£0£118.80£11.75 (£9.99 for ETFs) reducing to £6 if 20 trades placed in a month (across all accounts).
shareDeal active£0£118.80 (refunded if there is an active share dealing account linked to the pension)£9.50
SVS XO£0na£7.95
X-O£0£118.80 (refunded providing you invest your SIPP in the X-O dealing account.)£5.95
iDealing£20 per annum admin fee per account.£20£9.90
iWeb£25 one-off account opening fee for ISA and dealing account.Assets < £50k : £90, > £50k : £180£5
AJ Bell Youinvest0.25% platform charge for non-fund investment (capped at £30 for GIA/ISA and £100 for pension).No additional charge£9.95 a deal, reducing to £4.95 if there were 10 or more deals in previous month.
TD DirectISA: £30 (waived for portfolios > £5,100 or have regular investing set up)Additional product charge of 0.25% taken twice a year. Minimum of £96 and maximum of £240 per annum.£12.50 a trade reducing to £8.95 if 10-19 trades in previous 3 consecutive months, reducing further to £5.95 if there were more than 20 trades.
Fidelity Personal InvestingPortfolio <£7,500 : £45, >£7,500: 0.35% capped at £45. No charge for trusts held in a dealing accountNo additional charge0.10% dealing charge. Service fee for ETFs and Investment Trusts is capped at £45. Dealing accounts are not subject to this fee.
Hargreaves Lansdown0.45% capped at £45 (capped at £200 for SIPP with no charge for GIA.)    No additional charge£11.95 a trade reducing to £8.95 if  were 10-19 trades in the previous month, reducing further to £5.95 if there were more than 20 trades.
Barclays 0.10% platform charge. Min £48, max £1,500£150£6
Halifax Share Dealing£12.50. No charge for dealing account< £50,000 : £90, >£50k: £180£12.50
The Share Centre£57.60 (£4 per month)£172.80 pa (£12 + VAT per month)Standard option - £7.50 for deals under £7.50, 1% above. Frequent dealing option - a flat rate of £7.50 a trade plus £96 pa admin fee.
Clubfinance £60 (£15 per quarter, no fee if 3 trades made per quarter)na£4.95
Interactive InvestorQuarterly £20 account fee (comes with credit for 2 free trades each quarter).£96 annual fee£10
BestinvestTiered charge on assets >£250k: 0.40%, £250k-£1m: 0.20%, <£1m: 0%          Pension investment is charged at 0.30% for the first £250k rather than 0.40%.£7.50
Saga Investment ServicesTiered charge on assets >£250k: 0.40%, £250k-£1m: 0.20%, <£1m: 0%   Pension investment is charged at 0.30% for the first £250k rather than 0.40%.£11.95
Alliance Trust Savings£10 a month = £120 pa (comes with 4 free trades bundled in). Applies to each wrapper if you have both an ISA and a dealing account.£252 (comes with 4 free trades bundled in)£9.99 per transaction(4 free transactions bundled in with each wrapper)
Charles Stanley Direct0.25%, minimum of £24 and maximum of £240 per year. Waived if you trade in the month.£120 (waived if you hold a total portfolio (across all investment and wrapper types) of £30,000 or more)£11.50
Close Brothers A.M. Self Directed Service0.25% paNo additional charge£8.95
StrawberryTiered charge on assets < £50k: 0.35%, £50k-£1m: 0.25%, >£1m: 0.10%. Min £30 + platform charge of £10  £120£9.50
Trustnet Direct0.25% pa with minimum of £20 and maximum of £200.£96£10 per buy/sell reducing to £6 for the rest of the month if you've paid for 10 full price trades that month.
Telegraph Investor0.30% with a minimum of £20 and maximum of £300 per year.£96 pa. However, the £300 cap is still in force i.e. the SIPP fee effectively reduces the platform cap to £204.£10
Willis OwenTiered charge on assets <£50k: 0.40%, £50k-£100k: 0.30%, £100k-£250k: 0.20%, >£250k: 0.15%    £132 pa fee£7.50
EQ Shareview0.50% pa with a £24 minimum and £90 maximum. No charge for dealing accountna£12.50

Source: The AIC and the lang cat. Investment companies only. ISA wrapper, 12 trades per year evenly spread across the year (one a month). Frequent dealing option used for The Share Centre.

Lowest cost platforms for a £50k portfolio with 12 trades per year

 Annual admin fees for a £50k portfolio held in investment trustsCost of 12 trades per year Annual cost of a £50k portfolio assuming 12 trades per year 
Clubfinance£0.00£59.40£59.40
X-O£0.00£71.40£71.40
iWeb£25.00£60.00£85.00
SVS XO£0.00£95.40£95.40
IG£0.00£96.00£96.00
Fidelity Personal Investing£45.00£60.00£105.00
shareDeal active£0.00£114.00£114.00
Interactive Investor£80.00£40.00£120.00
Barclays £50.00£72.00£122.00
Charles Stanley Direct£0.00£138.00£138.00
iDealing£20.00£118.80£138.80
Selftrade£0.00£141.00£141.00
AJ Bell Youinvest£30.00£119.40£149.40
TD Direct£0.00£150.00£150.00
Halifax Share Dealing£12.50£150.00£162.50
Hargreaves Lansdown£45.00£143.40£188.40
Alliance Trust Savings£120.00£79.92£199.92
Close Brothers A.M. Self Directed Service£125.00£107.40£232.40
EQ Shareview£90.00£150.00£240.00
The Share Centre£57.60£186.00£243.60
Trustnet Direct£125.00£120.00£245.00
Telegraph Investor£150.00£120.00£270.00
Bestinvest£200.00£90.00£290.00
Willis Owen£200.00£90.00£290.00
Strawberry£185.00£114.00£299.00
Saga Investment Services£200.00£143.40£343.40

Source: The AIC, the lang cat and Investors Chronicle 

Lowest cost platforms for £500k portfolios with 12 trades per year 

 Annual costs for a £500k portfolio Annual cost of 12 trades per year Annual cost of a £500k portfolio assuming 12 trades per year 
Clubfinance£0.00£59.40£59.40
X-O£0.00£71.40£71.40
iWeb£25.00£60.00£85
SVS XO£0.00£95.40£95.40
IG£0.00£96.00£96
shareDeal active£0.00£114.00£114
Interactive Investor£80.00£40.00£120
Charles Stanley Direct£0.00£138.00£138
iDealing£20.00£118.80£138.80
Selftrade£0.00£141.00£141
AJ Bell Youinvest£30.00£119.40£149.40
TD Direct£0.00£150.00£150
Halifax Share Dealing£12.50£150.00£162.50
Hargreaves Lansdown£45.00£143.40£188.40
Alliance Trust Savings£120.00£79.92£199.92
EQ Shareview£90.00£150.00£240
The Share Centre£57.60£186.00£243.60
Trustnet Direct£200.00£120.00£320
Telegraph Investor£300.00£120.00£420
Barclays £500.00£72.00£572
Fidelity Personal Investing£45.00£600.00£645
Willis Owen£1,025.00£90.00£1,115
Close Brothers A.M. Self Directed Service£1,250.00£107.40£1,357.40
Strawberry£1,310.00£114.00£1,424
Bestinvest£1,500.00£90.00£1,590
Saga Investment Services£1,500.00£143.40£1,643.40

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