- Investors could save an average of £55.54 a year by switching, according to Andrew Hagger of Moneycomms
Fund ISA holders with £30,000 invested through one of the leading platforms could save up to £230.25 a year by switching the same portfolio to a cheaper provider, according to new analysis1 by personal finance expert Andrew Hagger of Moneycomms.
In one of the most comprehensive mystery shopping exercises ever carried out into the sector, Hagger also found that investors could save an average of £55.54 a year by switching to the cheapest platform in a sample of 21 of the leading providers.
In his report1, commissioned by the online investment platform rplan.co.uk, Hagger said that for any potential investor, regardless of their experience of trading, it is important to easily see the cost of purchasing and selling investments.
He commented: “As well as offering a competitive charging tariff it is also key that a provider’s pricing is easy to find and understand. Whereas some platforms were very clear about their charges, it is difficult to work out on others.
“Platforms do target investors with different amounts to invest, and this does go some way towards explaining the various levels of charges. But there is no doubt that opacity also plays a role.”
Analysis2 of HM Revenue & Customs data shows that the total number of UK adults with investment ISAs was 6.8m in the 2012/13 tax year with an average holding of £26,408. The HMRC says that higher income groups show a stronger preference for stocks and shares ISAs over cash products and that for savers with incomes of £150,000 a year or more, total ISA holdings average £61,393. The size of ISA holdings also increases with age: the HMRC says the amount of total ISA holdings averaged £34,705 among the 65s and over.
Nick Curry, Director at rplan.co.uk’s, said: “There seems to be a deliberate lack of transparency among some platform providers in the absence of any regulations. This accounts for much of the wide variations not only in charging levels but also a range of other features and services that Andrew Hagger has found in his report.
“At rplan.co.uk, we believe that charges should be expressed in both percentage terms and pounds and pence – that way investors can see exactly what the impact is of the fees they are paying.”
Table One: Cheapest and most expensive of 21 leading fund platforms in Hagger Report1, based on £30K portfolio
|Most expensive platforms in survey||Cost of £30K portfolio*||Cheapest platforms in survey||Cost of £30K portfolio*|
|iWeb||£425.40||Charles Stanley Direct||£289.80|
|Chelsea FS||£394.80||AJ Bell Sippdeal||£297.75|
|Standard Life||£375.00||TD Direct Investing||£309.00|
As well as providing access to well over 2,000 funds for retail investors, rplan.co.uk has four pre-selected portfolios with different levels.
To help investors get started, rplan.co.uk is offering investors £50 if they invest/transfer at least £5,000 or set up regular savings of at least £100/month within six months of their first investment (conditions apply).
For further information about the online investment platform rplan.co.uk including the tools it offers for choosing individual funds and its four pre-selected portfolios, visit rplan.co.uk.