Recommendations on investment platforms

[zico]

I have investments using AJ Bell, but would like to use a different provider for a different set of investments (for my father). Any recommendations about which is best - I'm interested both in low-cost and how easy it is to deal with the site - likely that I'll just be making a few investments, and then tracking them occasionally.

[EssDeeAitch]

I have investments using AJ Bell, but would like to use a different provider for a different set of investments (for my father). Any recommendations about which is best - I'm interested both in low-cost and how easy it is to deal with the site - likely that I'll just be making a few investments, and then tracking them occasionally.

I can recommend Interactive Investor. No platform fees, low trading fees but they do have a monthly fee and an annual fee for SIPP and ISA accounts. I switched from Fidelity and saved significant money. Also, wide fund range and customer service is adequate if not quite expert always.

If you go on the Holly Boring Money blog, there is a platform calculator that you may find useful.

[hiriskpaul]

Depends which sort of investments you had in mind and how much you want to invest. For passives iWeb are quite good, with no ongoing fees for ISA or unsheltered accounts and simple fixed £5 dealing fees for both funds and ETFs. Only annoyance with ETFs is that they do not allow you to hold foreign currencies and charge a fairly high 1.5% to convert dividends to pounds. To put that into perspective, that works out at about £30 per year for each £100k ETF portfolio paying 2% dividends, so not huge just annoying.

[Mark66]

Depends which sort of investments you had in mind and how much you want to invest

I concur with this.

For share based (ETF's and Investment Trusts), dont rule out Hargreaves Lansdown especially for smaller investments they are not too badly priced. If holding funds their charges are very high though. Also dealing charges higher, but for buy and hold this should not be an issue.

Interactive investor, I have no complaints myself (an ISA holding) but I am aware of reports of problems from others on this website. Their flat fee charges come into their own for bigger investment holdings.

For costs comparison I use:
http://www.comparefundplatforms.com

Not used iWeb myself, but I have noticed (cost wise) they always seem to be near the top on this platform comparison site.

[Mark66]

I'm interested both in low-cost and how easy it is to deal with the site

To answer the second part of your question, I use A J Bell, HL and II. In reality for day to day use I have not noticed too much difference between these three. A few months ago I restructured mine and my wifes portfolios, mainly active funds to passive ETF's, on all three of these platforms. In reality couldn't say one is better than the other, all worked just fine.

In terms of customer service on phone for any queries no problems with any of them:

HL - Always very slick and professional.
II - In contrast to HL, I would guess no dedicated front of house team, but got answers to my questions. In fact, one time when the person answering the call could not answer my question on timing when buying ETF's after selling funds, I got put through to the dealer and got the best possible explanation possible, I was very impressed.
A J Bell: Between the two - any queries answered.

[hiriskpaul]

HL are top notch for service at a bargain price. I have had worse service from some full service brokers.

It has to be said my experience of iWeb is not great. But if all you want is tracker funds and ETFs there is little to go wrong.

[scrumpyjack]

Totally agree re HL, plus I must have had at least 10 years fees up front in cash bonuses for moving to them.

The other point to bear in mind is that I think they are about the most financially robust broker out there which is an important consideration. I'm sure most of us are well north of the £85k guarantee.

[AppleCrumble]

The other point to bear in mind is that I think they are about the most financially robust broker out there

What are your reasons for this?

[scrumpyjack]

They are consistently very profitable and have a market cap of 8.5 billion. They are not a bank. They are publicly quoted and thus subject to more public scrutiny and are not owned by private equity, who like banks are often very highly geared and opaque.

I can't think of another UK platform/broker I would rather be with on the financial stability criterion.

[hiriskpaul]

They are consistently very profitable and have a market cap of 8.5 billion. They are not a bank. They are publicly quoted and thus subject to more public scrutiny and are not owned by private equity, who like banks are often very highly geared and opaque.

I can't think of another UK platform/broker I would rather be with on the financial stability criterion.

I take the opposite view and would prefer to use a broker that was owned by a large financial institution. That way if something goes wrong the owning institution is likely to pump in funds to sort it out. In the case of the OEIC I held in a pension account where the manager went rogue, the fund management firm was owned by Deutsche Bank and they fully compensated investors. A small listed or privately owned fund manager might not have been able to do that.

[scrumpyjack]

Yes there is some merit in that view and indeed I used to use TD Direct partly because they were owned by a reputable Canadian Bank. I moved to HL when they were sold and the buyer was a private equity operation.

But my experience with Barclays Stockbrokers was so bad that it really put me off bank stockbrokers!

[Lootman]

YBut my experience with Barclays Stockbrokers was so bad that it really put me off bank stockbrokers!

That's the dilemma, isn't it? The big banks are (arguably) the "safest" in that they are too big to fail and would hopefully get bailed out by the government in the way that RBS and Lloyds were a decade ago.

But on the other hand they are incompetent. Most discerning customers would not buy discretionary financial services from a bank, like insurance or investment advice, because they are not good value.

The big banks have other lines of business that increase risk, like lending and proprietary trading. So a decade ago pure investment-only entities like Vanguard, Fidelity, Blackrock and State Street were not unduly troubled. But the brokers with other businesses, like Merrill and Lehman, collapsed. Merrill was bought out, but Lehman perished. Citi and Bank of America came close to oblivion as well.

Whereas a true broker is in a low risk business, performing deals between third parties and skimming off a haircut. They don't require a lot of capital to operate, and really should not fail although I accept that now and then a smaller one does.

[TahiPanasDua]

Yes there is some merit in that view and indeed I used to use TD Direct partly because they were owned by a reputable Canadian Bank. I moved to HL when they were sold and the buyer was a private equity operation.

But my experience with Barclays Stockbrokers was so bad that it really put me off bank stockbrokers!

I share your view on the private equity aspect. I dumped Internaxx who, similar to TD Direct, were consecutively owned by TD, II and the same private equity outfit then a dodgy sounding Swiss currency broker. I can pick em.

I similarly agree with your thoughts on the new Barclays whom I am ashamed to admit I am still with. I must get out but am vainly looking for a joint account with someone who is not II, Barclays or HSBC.

Is it scaremongering to suggest HL could be hit by huge damages payments to the Woodford clients they let down so badly?

TP2.

[scrumpyjack]

I really can't see HL having any legal liability because they recommended Woodford's funds to clients. I'm sure their T&Cs are full of caveats etc so as to remove any liability.

If brokers did have legal liability for advising clients to buy funds or shares that then performed poorly, there wouldn't be any brokers left in business.

I do recall from many years ago one definition of an Investment bank as being a firm who manages your money until it's gone!

[hiriskpaul]

Is it scaremongering to suggest HL could be hit by huge damages payments to the Woodford clients they let down so badly?

That thought has crossed my mind. Woodford may or may not have breached the rules over some of the things he held in his fund. If it ends up being ruled he did break the rules and must compensate investors, his firm, even if still in business, will not have the means to do that.

HL are in a tricky position. I always thought it a little odd that they are allowed to negotiate discounted fund classes to offer to their customers in return for talking up those funds. This seems to go against the spirit of the RDR as it could lead to a conflict of interest. If nothing else, the FCA should look at this aspect.

I do like HL though and hope they don't get fined over this.


Ps, for all their annoyances, iWeb are part of Lloyds Banking Group, which I do find reassuring.

[ayshfm1]

I like Halifax sharedealing. Platform is a little clunky, but I prefer it to AJ Bell's. The key reason though, my costs are all flat rate, which in my case is cheaper than a %

[Cookie]

Is it scaremongering to suggest HL could be hit by huge damages payments to the Woodford clients they let down so badly?

That thought has crossed my mind. Woodford may or may not have breached the rules over some of the things he held in his fund. If it ends up being ruled he did break the rules and must compensate investors, his firm, even if still in business, will not have the means to do that.

HL are in a tricky position. I always thought it a little odd that they are allowed to negotiate discounted fund classes to offer to their customers in return for talking up those funds. This seems to go against the spirit of the RDR as it could lead to a conflict of interest. If nothing else, the FCA should look at this aspect.

I do like HL though and hope they don't get fined over this.


Ps, for all their annoyances, iWeb are part of Lloyds Banking Group, which I do find reassuring.

Bit of a double edged sword, didn't Lloyds get bailed out by the Government...

[Dod101]

Since the takeover of Alliance Trust Savings I have rather more than half of my holdings with Interactive Investor. I am sure they do have a dedicated front of house team and mostly they know the answers. If not, they can get them quickly. I do not much like the private equity fund in the background if that is what J C Flowers is but they seem to me to be fine. They have flat fees and inexpensive dealing charges plus free dealing per quarter. I do not remember how many free deals, but sufficient for me to hardly ever pay any dealing charges.

I also use HSBC Investdirect. They are anything but a slick operation, a bit like the Bank itself but it works and again with flat fees. Dealing charges are £10.50 though. I do not trade and only occasionally make changes to my portfolio so their fees are tolerable and surely they are as secure as any platform can be.

Dod

[tikunetih]

HL are in a tricky position. I always thought it a little odd that they are allowed to negotiate discounted fund classes to offer to their customers in return for talking up those funds. This seems to go against the spirit of the RDR as it could lead to a conflict of interest. If nothing else, the FCA should look at this aspect.

I recall the FCA apparently welcoming these discounted (actually, HL-specific) share classes, naively interpreting them as a source of additional competition driving down fees, rather than the "vendor lock-in" that they actually facilitated due to them making in specie transfers out impossible.

[Alaric]

I recall the FCA apparently welcoming these discounted (actually, HL-specific) share classes, naively interpreting them as a source of additional competition driving down fees, rather than the "vendor lock-in" that they actually facilitated due to them making in specie transfers out impossible.

It may have been better to structure these platform specific deals as rebates. The problem is that someone would have to convince HMRC or amend the law so that these rebates were not treated as taxable income outside of SIPPs and ISAs.