Most expensive D2C platform 3x cheapest

Andrew Hagger, an independent personal finance analyst at MoneyComms, was commissioned to assess 21 platform providers on various aspects during February.

One test was to calculate the cost of investing £30,000 in 10 funds with each one, finding that the annual charges ranged from £75 with iWeb, Close Brothers, Cavendish and Charles Stanley, to £219 with Willis Owen. The average charge was £138.

Willis Owen responded that their pricing structure changed from 9 March to mean that for the £30,000 investment mentioned, the total fee would now be below the average in the research.

“Since we introduced our new pricing structure last month, the 0.40 per cent total platform fee on investments up to £50,000 means that a £30,000 investment would now be charged at the lower price of £120.”

The next most expensive was Alliance Trust Savings at £200, followed by Sharecentre on £193.

Mr Hagger also noted that Close Brothers pricing was a temporary offer that increases from 0.25 to 0.35 per cent on the first £50,000 from December 2015.

When looking at exit and transfer fees, Mr Hagger identified that 14 of the 21 platforms reviewed did not apply charges, but for those that did, transfer out and account closures fees of between £15 and £25 per holding were common.

For instance, he found that Alliance Trust Savings charging £60 plus Vat to transfer out an investment.

Speaking to FTAdviser, Mr Hagger said: “Those that I ranked the highest had a set percentage fee, whereas others that scored less well would have fees per trade or fees per quarter.”

Stuart Dyer, Rplan’s chief investment officer, stated that some of the charges made by the self-directed fund platform market “are outrageous and should not be tolerated”.

Mr Hagger said that he came from the perspective of someone not used to investing directly and initially found that many platforms bombarded the user with too much information, with websites being difficult to navigate and lacking any questions about an investor’s risk profile.

Update: This article was amended after publication to remove a reference to the Nutmeg, which had been quoted in the research as having the highest charges. The authors subsequently contacted FTAdviser to state they have since concluded as the platform offers services that go beyond simple execution-only investing, it “justifies a higher fee” and should be removed.

Comparison table for the annual cost of investing £30,000 in 10 funds.

peter.walker@ft.com