The cheapest investment platforms for ISAs

When you start to DIY invest, there’s a big decision you have to take….

In some ways, deciding which investment platform you’re going to use is more important than choosing your shares or investment funds.

This article is part of a wider series on investing, covering all areas from stocks and shares to buy-to-let, peer-to-peer and alternative investments. Click here to view the full guide.

Investment platforms – the basics

Essentially, investment platforms are websites that enable you to buy and sell your investments online. Some platforms only allow you to invest in funds, but many platforms also enable you to invest in stocks and shares, and possibly bonds as well.

What’s more, most platforms also allow you to manage your tax-free investment wrappers online – typically a Stocks & Shares ISA or a low-cost self-invested personal pension (SIPP).

You can also use platforms to monitor how your investments are doing. And many platforms offer educational content and other useful information.

Choosing the right platform can make a real difference. If you choose the right one, you’ll save money and you’ll also benefit from better functionality and a wider range of possible investments.

There's more on platforms in our Beginner's guide to investment platforms.

Costs

The Retail Distribution Review (RDR), which came into force in 2013, pushed platforms to move away from commission-based charging towards new ‘clean pricing’. In practice, this means that most platforms will charge an annual fee.

If you're using a predominately share-dealing service, this may be payable quarterly or every six months, or you may have to pay every time you buy something instead.

As well as the already-mentioned platform or service charges there may be a management cost for the investments, for example, annual fund charges.

These will be charged by the investment provider, but some platforms have negotiated discounted rates for funds, known as 'clean' or 'super clean' funds.

You should also look out for these charges, which are likely to be hidden in the small print:

  • dealing charges, if you think you're going to want to sell shares, for example;

  • dividend reinvestment charges, if you ask for any dividends you receive to be automatically reinvested;

  • inactivity charges, for not using your account for some time;

  • exit charges, for moving your investments somewhere else.

Cost comparison

We've looked at the costs of some of the most well-known investment platforms as well as some of the newer kids on the block who are offering a different type of solution. We've also listed which types of investments they offer.

Platform

Annual platform charge on £50,000 or less

Annual platform charge between £50,000-£100,000

Annual ISA charge

Notable additional charges

ISA investments offered

Halifax Sharedealing

None

None

£12.50

Dealing charges, various admin charges

Shares, funds, bonds, gilts, ETFs, investment trusts

iWeb

None

None

None

Opening charge, share dealing charges, dividend reinvestment fee,

Shares, funds, investment trusts, ETFs, bonds, gilts

Vanguard

0.15%

0.15%

None

None

Funds, ETFs

AJ Bell YouInvest

0.20%

0.20%

None

Share dealing

Shares, funds, investment trusts, ETFs, ETCs, Government bonds, corporate bonds, PIBS, warrants, covered warrants

Charles Stanley Direct

0.25%

0.25%

None

Share dealing charges, closure fee

Shares, unit trusts, OEICs, overseas equities, investment trusts, ETFs, ETCs, gilts, bonds, PIBS

Cavendish Online

0.25%

0.25%

None

None

Funds, ETFs, investment trusts, investment bonds

Close Brothers A.M. Self Directed Service

0.25%

0.25%

None

Share dealing charges

Shares, funds, gilts

Standard Life Self Investor

0.35%

0.35%

None

None

Funds

Santander

0.35%

0.2%

None

None

Funds

Fidelity

£45/0.35%

0.35%

None

Share dealing charges, regular savings charges,

Shares, funds, investment trusts, ETFs

BestInvest

0.4%

0.4%

None

Share dealing charges

Shares, funds, investment trusts, ETFs

Hargreaves Lansdown

0.45%

0.45%

None

Share dealing charges, dividend reinvestment, transfer fee, closure fee

Shares, funds, bonds, gilts, investment trusts, ETFs

Nutmeg

0.45-0.75%

0.45-0.75%

None

None

Portfolio created on your behalf

Moneyfarm

0.70% on the first £20,000,0.60% thereafter

0.60%

None

None

Portfolio created on your behalf

The Share Centre

£21.60

£21.60

£57.60

Dealing charges, regular investing, dividend reinvestment,

Shares, funds, investment trusts, gilts, bonds, ETFs, ETCs, IPOs

Barclays Smart Investor

From £48

From 0.1% depending on what you’ve invested in

None

Transaction charges

Shares, funds, ETFs, investment trusts, bonds, gilts

Selftrade

£50 plus £19.96 for each Selftrade product you hold

£50 plus £19.96 for each Selftrade product you hold

£50 plus £19.96 for each Selftrade product you own

Transaction charges, regular investing fee

Shares, funds, investment trusts, ETFs, fixed income, REITS, warrants

Interactive Investor

£90

£90

None

Share dealing charges, dividend reinvestment,

Shares, funds, investment trusts, ETFs, bonds, gilts, VCTs, spreads, CFTs

Alliance Trust

£120

£120

£120

Share dealing charges, dividend reinvestment fee, transfer fee, closure fee

Shares, funds, investment trusts, ETFs, gilts, bonds, OEICs, unit trusts

Sources: Platforms’ websites - correct as of July 2018

Clearly, there are plenty of differences between the investment platforms. The right platform for you will be dictated to some degree by what you want to invest in, how often you think you’ll buy or sell your investments, or even whether you simply want someone else to handle it all for you.

Service should also be a consideration, as some platforms are renowned for what they offer beyond the simple trading service. For example, Hargreaves Lansdown, despite being one of the more expensive platforms, is consistently highly-rated for the way it deals with its customers. Or you may decide you don't have any flash brochures or other bells 'n' whistles and price is the most important thing.

Cheapest platforms by portfolio size

Meanwhile, financial consultancy the lang cat has calculated the cheapest platforms in pounds and pence for a variety of different portfolio sizes. These calculations include four fund switches a year.

Cheapest platforms for a £5,000 portfolio

Here are the cheapest platforms for a portfolio worth £5,000:

Platform

Annual cost

Cavendish Online

£13

Charles Stanley Direct

£13

Close Brothers A.M Self Directed Service

£13

Santander

£18

AJ Bell YouInvest

£19

Cheapest platforms for a £15,000 portfolio

Here are the cheapest platforms for a portfolio worth £15,000:

Platform

Annual cost

Cavendish Online

£38

Charles Stanley Direct

£38

Close Brothers A.M Self Directed Service

£38

AJ Bell YouInvest

£44

iWeb

£45

Cheapest platforms for a £50,000 portfolio

Here are the cheapest platforms for a portfolio worth £50,000:

Platform

Annual cost

iWeb

£45

Halifax Share Dealing

£63

Clubfinance

£80

The Share Centre

£88

Interactive Investor

£90

Again, it’s crucial that you bear in mind the investment charges, any additional charges levied by the platform and the investments on offer before you sign on the dotted line.

Compare ISAs on different platforms

This article is regularly updated

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